Six Nations is contemplating becoming a part owner in a massive underwater energy project between Canada and the United States that could see $45 million in revenue come to the community over 40 years or more.
Last week, Six Nations of the Grand River Elected Council authorized Chief Mark Hill to sign a term sheet moving forward with a 60-day community consultation on the project beginning March 1 to the end of April.
Due to Covid transmission concerns, the community will be asked for input via webinars whether or not it wants to move forward with an equity or royalty option on the project.
The equity option provides Six Nations with a seven per cent ownership of the project, while the royalty option provides annual stipends to the community. The royalty option provides about $30 to $40 million over a 40-year period.
The Lake Erie connector project, as it’s known, is a 1,000 mw high-voltage power cable 117 km long that will connect Ontario to Pennsylvania under Lake Erie. The two countries will sell power to each other on an alternating basis whenever there is an excess of electricity to provide.
Six Nations of the Grand River Economic Development Corporation (SNGRDC) has been working with the project developer, ITC Investment Holdings, since October to flesh out the details of the term sheet.
Legal, financial and environmental firms have already been retained and consulted on the project, said SNGRDC President Matt Jamieson.
“All that work is being done to equip us, council and the community with the requisite information to make a decision on whether or not we want to participate in this project,” said Jamieson.
The term sheet sets out three choices for the community:
-to participate as an equity owner, owning seven per cent of the transmission line
-a participation payment, or royalty payment, where Six Nations would receive an annual royalty stipend but Six Nations would not own the project
-not to participate at all
“It’s very preliminary at this point to lean towards one,” said Jamieson. “What we’re suggesting is that we kick off…our community outreach process.”
The underwater technology is not new, he told council during a virtual meeting last week.
“There have been many, many projects like this that have laid electrical systems under lakes in Canada, so it’s not new technology,” said Jamieson. “But it’s new for us and it’s in our backyard, so to speak, so we’ve been working with ITC for many, many months to better understand what the opportunities and risks are.”
The project has already received the requisite permits from bodies such as the Ontario Energy Board.
The generating station on the Ontario side will be located in Nanticoke, just off the shore of Lake Erie.
Six Nations could also benefit through energy bill savings.
The project will save community members money on their electricity bills and it will also reduce carbon emissions in the province by two to three million tons a year.
The developer is also offering elected council an additional revenue stream of $1 million a year for the first three years of the project’s lifespan as part of a community benefit agreement, and then, an additional $120,000 a year for 40 years if council supports the project.
“The benefits to the community are largely economic,” said Jamieson.
Six Nations people also have the opportunity to be hired during construction of the project.
Council agreed to move forward with community consultations and authorized Chief Mark Hill to sign the term sheet. Coun. Michelle Bomberry opposed and asked for a recorded vote.
