HELENA - A Canadian energy company and an arm of the U.S. Energy Department are working on a deal to complete financing for a proposed Montana-Alberta power line that would span 214 miles and carry power from the region's emerging wind industry, officials said Tuesday.

The 230-kilovolt line planned by Tonbridge Power Inc. would run from a substation outside of Lethbridge, Alberta, to a substation near Great Falls, and would carry power in both directions.

A nonbinding agreement between Tonbridge and the Energy Department's Western Area Power Administration clears the way for detailed negotiations about financing the project with loans of up to $161 million, drawing on federal economic stimulus money.

The goal is to complete negotiations by July 31, WAPA spokeswoman Theresa Williams said.

Tonbridge Chief Operating Officer Robert van Beers said that once financing is in place, construction of the transmission line could begin late this year. Tonbridge subsidiary Montana Alberta Tie Ltd. of Calgary, Alberta, is handling the project.

"In these tenuous times in the capital credit markets, WAPA working with MATL is a very positive movement toward full completion of the project," said Evan Barrett, Montana Gov. Brian Schweitzer's economic-development adviser.

Building transmission capacity is a key part of developing the wind-energy business in the state.

Montana Alberta Tie Ltd. cleared its final regulatory step last November, when the U.S. Energy Department issued a construction permit. In May, Canadian farmers against the project, which would cross farmland, lost their case before the Alberta Court of Appeal. The farmers opposed the power line's route and said the project would not meet the public's interest.

The idea for the transmission line emerged about five years ago. If construction began late this year, the transmission line likely would be ready for use in late 2010, van Beers said.

The projected cost of Montana Alberta Tie overall is just over $200 million, he said. Equity in the project totals about $45 million, he said.

Barrett said the project is at a stage that fits well with goals of the economic stimulus program.

"It's exactly what they (officials in the Obama administration) want to have happen, which is to start putting shovels in the ground," he said.

Negotiations with WAPA include working out details for operation and maintenance of the transmission line, and terms for repayment of the federal loan.

"They're not going to lend money that they're not certain they're going to see back," van Beers said.