"This is an important milestone for our Company," said Johan van’t Hof, Tonbridge’s Chief Executive Officer. "With MATL successfully financed and under construction, our team is turning its attention to several transmission project opportunities that we have uncovered. This next line is our top choice."
The project, referred to as the "Green Line", will be approximately 100 miles in length and is Tonbridge’s second transmission line project. The proposed Green Line would connect the Company’s MATL transmission line, which is currently under construction, with Bonneville Power Administration’s transmission system on the 500 kV Colstrip transmission line (the "Colstrip line") at or west of Townsend or Garrison, Montana. The Colstrip line is the major "electricity highway" that runs East to West out of Montana and enables renewable and other power to reach load centers in the Pacific Northwest region.
Tonbridge will undertake to allocate at least 500 MW of firm transmission to Gaelectric in consideration for payment of mutually agreed development costs. The formal allocation of this capacity would occur through a FERC regulated process resulting in firm transmission shipping rights. In this respect, Gaelectric would become an "Anchor Shipper" and would receive its development contributions back through contracted transmission tariff reductions in the future.
On August 26, 2009, Tonbridge made inter-connection requests to Bonneville Power Administration for 1,000 MW each at Garrison and Townsend, Montana.
The Green Line project is expected to proceed through three major phases of development before it can become operational:
– The first phase, "Feasibility", is anticipated to take 8-12 months. The Feasibility phase involves numerous independent assessments of all the commercial, technical, regulatory, financial, routing and timeline elements of the project and ultimately is designed to support a decision to proceed to development.
– The second phase, called "Development and Regulatory Approval", is expected to take 15-18 months. During the Development and Regulatory Approval phase, the Company will define the technical scope and size of the line, post for auction any remaining capacity, obtain required permits and regulatory approvals, define final right of ways within permits, conclude engineering, procurement and construction contracts, execute operations and maintenance arrangements and arrange for required project capital through senior financing arrangements.
– The final phase, "Construction", encompasses formal notice to proceed, mobilization, final engineering and design, procurement, final land assembly, erection of all facilities, testing and declaration of the commercial operation date.
The current agreement between the Company and Gaelectric relates only to the Feasibility Phase of the Green Line project. Tonbridge and Gaelectric will collectively contribute up to US$500,000 for third party expenses in addition to staff labor from both companies as required to complete the Feasibility Phase.
If the Feasibility Phase is successful, the parties have agreed to negotiate a development agreement. There is no assurance that the Green Line will be determined to be feasible, that a development agreement will be executed or that the Green Line will be built.
If the Green Line is built, it is expected to have a positive impact on the MATL line, as it should relieve the congestion for southbound electricity flows by, in effect, extending the MATL line southward to interconnect with the Colstrip line.
Robert van Beers, Chief Operating Officer and Head of Project Development for Tonbridge remarked, "We have been working to get to this point for a long time. With the wind resources available in Montana, it is essential that real and commercial solutions for transmission be brought to fruition in order to ensure renewable generation becomes a reality. We are delighted to collaborate with a partner as capable and as committed as Gaelectric." Gaelectric is a group of companies, each active in the different fields of Renewable Power Generation and Energy Storage with experienced teams specialized in all aspects of project planning, permitting, finance, engineering and management. Gaelectric is active in Northern Ireland, the Republic of Ireland and North America where Gaelectric operates regional development offices.
Tonbridge Power Inc., is a Toronto-based developer of electrical transmission assets, whose principal asset is a 100% interest in Montana Alberta Tie Ltd. Shares of the Company are traded on the TSX Venture Exchange under the symbol "TBZ."
