The bill itself is a fairly plain piece of legislation. If the government considers a power line project “critical,” it can fast track the project and skip public hearings.
Bill 50 deemed four different projects as critical. When you hear or read cost estimates relating to the bill, these are what those cost estimates refer to:
- Two new high-voltage direct current transmission lines between Edmonton and Calgary to carry more power to Alberta consumers in central and southern Alberta – $3.135 billion
- One new double-circuit alternating current transmission line between Edmonton and the Heartland area (near Fort Saskatchewan) to carry power to industrial consumers like Alberta upgrading facilities – $387 million
- Two new alternating current transmission lines between Edmonton and Fort McMurray - $2.045 billion
- A substation in Calgary to provide more reliable service to customers in south Calgary – $100 million
While not a part of Bill 50, the Alberta Utilities Commission approved the Southern Alberta Transmission Loop in September of 2009 before Bill 50 was passed. It is considered a Tier 1, critical transmission infrastructure project:
- Two double-circuit 240 kV lines and a new 500 kV substation to allow new wind farms to be able to connect to the grid – $2.454 billion
The Edmonton to Calgary lines are the largest and most expensive project and has drawn the most ire. The Edmonton to Fort McMurray lines are important as well because of the energy needs of the oil sands projects in the region, and possibility of cogeneration becoming a part of Alberta’s energy mix. Cogeneration would capture the waste heat from the industrial processes in the oil sands and create electricity.
Unfortunately for the public, the regulator and government disagree on the estimated cost. The government estimates $3.39 billion while AESO’s estimate comes in at $5.6 billion. Neither includes the Southern Alberta Transmission Loop.
When asked about the disparity, Brausen said that by staging the building of the terminal stations on the Calgary to Edmonton lines, costs could be lower. Still, he could not explain the difference.
By AESO’s count, this brings the total of locked-down, for-sure transmission projects to $8.1 billion. However, those five projects are only the beginning. AESO has big plans for our power lines, substations and interties. An intertie is a connection between Alberta’s electrical grid and the grid of another jurisdiction. In June of 2009 AESO submitted its Long Term Transmission Plan. While the plan included the four Bill 50 projects and the Southern
Alberta Transmission Loop, it also includes what are called Tier 2 and other projects.
The proposed Tier 2 projects include four different interties with other jurisdictions at a cost of $2.125 billion and transmission to the northeast and northwest to service “renewable and low-emission energy zones” at an estimated cost of $1.9 billion.
According to AESO these Tier 2 projects are currently “at a less advanced stage of planning.” Will all of those Tier 2 projects get built? Unlikely, but with AESO putting them in its long-term plan if events come to pass that would justify the building of any of them, they could immediately be fast-tracked by the government.
There is also a category called “other” with a further $3.8 billion planned for what’s called long-term regional transmission system infrastructure and $570 million worth of upgrades scheduled to finish in 2010-2011.
The time frame of all of these projects has them set for completion by 2017. The total for all of these projects comes to an estimated cost of $16.5 billion in 2008 dollars.
So what does this mean to the average household consumer? David Erickson, the CEO of AESO, has gone on record stating that for each billion spent on transmission infrastructure the average residential customer will see an increase of a dollar a month. The average residential customer is paying for only 16 % of these upgrade costs.
Regardless of the actual costs, you can be fairly certain the ratepayer will be paying more than the $3.39-billion government estimate.
Exporting power is a sticky issue. Private companies raking in profits on the back of publicly funded infrastructure projects never goes over well with the public. One would imagine that that’s why the government has been extremely clear in its communications on this subject. “All of the identified critical transmission infrastructure projects are for Albertans,” says the same government web page with the cost estimate.
However, power exports happen almost daily. Alberta’s interties connect us to Saskatchewan, B.C. and through those, the rest of North America. The electrons powering your BlackBerry charger could have come from a dam on the Columbia River in Washington State. However it should be noted that Alberta imports more power than we export.
In AESO’s 2009 Long Term Transmission Plan, export is barely mentioned. Bowman, the lawyer at the Environmental Law Centre, believes that power exports could become a reality in the future. “You just have to do the math in how they’re calculating demand, especially in the south,” says Bowman.
AESO states in its long-term plan that power demand in the south-central part of Alberta, not including Calgary, will reach 3,662 megawatts of peak winter demand in 2028. By comparison, Calgary and Edmonton combined are estimated to draw 4,280 megawatts of peak winter demand in 2028. The area of south-central Alberta being projected for high power demand include Red Deer, Banff, Drumheller, the suburbs around Calgary and a couple of other locations. Given the lack of any planned major industrial projects in the area “it stands to reason that some of this projected demand is actually export demand,” says Bowman.
But Brausen says it isn’t so. “I can assure that is not the case. This was our forecast in 2008 for the domestic consumption. We aren’t trying to forecast any exports or anything like that,” Brausen says. “Perhaps the forecasts have come down to reflect the most current economic activity. I think that’s certainly the case. The AESO’s mandate is to do all of our work in the public interest and to try and forecast these needs. I would assure that we would not try to backdoor anything here.”
Yet the potential for exporting power remains. “There is a market component where, if you’ve got these interties, you can export when you have that surplus, or import when you’re short, or there is lower-priced energy elsewhere,” says Brausen.
Being more robustly connected to the North American grid would also help the reliability of the system, always an important consideration for AESO. “As your system grows, having more interties enables you to get help from other jurisdictions when you run into trouble internally. I think it’s a very critical piece of grid development going forward,” says Brausen.
With $8.1 billion committed to transmission upgrades and another $8 billion on deck, the priorities have been set. The grid’s capacity to move power from large centralized plants to where it is needed will be improved.
So while there is a big shopping list of electricity projects for Alberta, the only certainty at this point is that things will not stay the same in power transmission. Alberta’s electricity system is, much like Alberta politics, due for some interesting developments. Keep an eye on it.
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