Neptune Regional Transmission System LLC, the largest merchant electricity transmission project to date, said it will launch an open season auction of transmission rights Sept. 10.
The Neptune regional transmission system (Neptune RTS) will connect New Brunswick, Nova Scotia, Maine, Boston, New York City, Connecticut, Long Island, and New Jersey. The proposed system will make it possible to deliver a total of 4,800 Mw of electricity through a subsea high voltage direct current (HV DC) electric transmission grid into Northeast urban markets.
During the open season, Neptune will solicit bids from eligible customers for transmission scheduling rights on a 20-year basis. Final bids will be accepted Oct. 5 for Phase 1 and indicative bids will be accepted for Phases 2-4. Final bids for Phases 2-4 will be accepted Nov. 9.
Neptune is proof the regulatory doors have “swung open to merchant transmission,” said Ed Krapels, of Energy Security Analysis Inc., a Boston consulting firm. Krapels is also a director of the company developing Neptune.
As a merchant facility, Neptune represents a significant departure from prior transmission projects, which have been built by utilities and approved by regulators on a cost-plus, rate-of-return basis. In addition, it will provide electricity from energy-rich markets in Maine, Nova Scotia, and New Brunswick to markets in power-short Northeastern urban centers.
“The open season auction will provide a fair, open process for eligible customers such as utilities, generators, power marketers and gas producers to take advantage of this landmark opportunity,” said Charles Hewett, CEO of Atlantic Energy Partners LLC, the project developer.
By connecting generators in relatively remote areas with load in congested urban centers, Neptune also forms the backbone of the emerging Northeastern Regional Transmission Organization, a combination of PJM Interconnection LLC, the New York Independent System Operator, and the ISO New England.
The Federal Energy Regulatory Commission’s order directing Neptune to work with the Northeastern RTO to ensure the RTO’s tariff is designed to accommodate Neptune’s financing needs is an “important statement directed not just at Neptune but also parties creating the RTO,” Krapels said.
FERC ordered PJM to revise its procedures to include third parties who want to build and own transmission facilities in the region, Krapels noted. FERC approved the Neptune project and the sale of transmission capacity rights July 25. The decision followed by a matter of weeks, FERCà¯¿½s directive for the formation of a Northeast RTO.