MONTPELIER -- Developers are lining up to bring renewable power to southern New England as part of a regional initiative that guarantees a ratepayer-backed return on investment.

In response to a six-state strategy to bring more clean power to the region, a Massachusetts transmission company said it wants to bury a transmission line under Lake Champlain to connect industrial wind power in New York to a Burlington substation.

"It's a unique moment in time," said Edward Krapels, CEO for Anbaric Transmission, which is in the early stages of proposing the 40-mile project called the Grand Isle Intertie.

Governors of the six New England states announced a plan last year to bring up to 3,600 megawatts of renewable power to the region's power grid in order to meet higher renewable energy targets. This plan includes importing industrial wind and hydroelectric power from Canada and New York.

The company says the initiative creates the opportunity to import New York wind power as the region closes fossil fuel-powered plants and strives to meet higher renewable portfolio standards.

"The line accomplishes a public policy objective of all the New England states, which is clean energy," Krapels said.

The states' initiative would set up a new financing scheme that provides a ratepayer-backed financial guarantee for projects approved through a competitive bidding process. The states will release the RFP by late summer, according to the Vermont Department of Public Service.

DPS Commissioner Chris Recchia said the state will not support any project that is not good for the Vermont ratepayers. But environmental watchdog groups say it is unclear what effect the initiative will have on rates and the environment.

Sandra Levine, a senior attorney for the Conservation Law Foundation, supports projects to bring renewable power to the region, but questions the initiative.

"We don't want to be using ratepayers' dollars to overbuild.

Anbaric Transmission map
Anbaric Transmission map
That's a waste of money and it's harmful to the environment," she said.

The group filed a public records request to the six states for all documents related to transmission build-outs, natural gas pipeline capacity and hydropower imports from Canada.

Recchia said the states will hold a series of public meetings to present the region's plan in preparation for bidding process. The meetings will include a range of stakeholders, including environmental groups and developers.

Anbaric has filed with ISO New England (ISO-NE) and New York ISO (NYISO), the regions' grid operators, for an interconnection permit, which can take more than a year to complete, the company said.

Another developer of a merchant transmission project, which will use private money for the project, views the state's initiative as an indication that there is the political will to advance the project.

Transmission Developers Inc., or TDI New England, has plans to run a 150-mile cable from Canada to southern Vermont. The New England Clean Power Link, the name of the project, still needs state and federal approval.

The company saw clear market signals to move the project forward: tightened renewable energy standards, power plants going offline (including the Vermont Yankee nuclear power plant) and broad agreement between the six states and premiers in eastern Canadian provinces.

Together, these signals opened up the opportunity to bring Canadian hydroelectric power to the region's load centers, such as Connecticut and Massachusetts, according to Don Jessome, the company's CEO.

The company said the project will benefit Vermont and the region - benefits that outweigh the environmental impacts of laying a high-voltage line under Lake Champlain, as the proposal indicates.

"It will definitely drive down rates in Vermont," he said, to the tune of $100 million of the first 10 years.

The company, a Wall Street financial services subsidiary, will not seek any money from ratepayers for the project.

Vermont Electric Power Co. (VELCO), the state's transmission utility, is considering investing in these projects, selling or renting right-of-way easements, or selling cultural and environmental engineering data to these developers.