Transmission – Facilities Application – Property Value Impacts
AltaLink Management Ltd. (“AltaLink”) applied to the AUC for approval to develop five transmission projects (the “Projects”) necessary to reinforce the 138-kilovolt (“kV”) and 240-kV transmission system in Leduc, Strathcona, and Parkland County areas, near the City of Edmonton (“Edmonton”).
The most significant transmission project was the proposed Cooking Lake transmission project, consisting of 24 kilometres (“km”) of new 138-kV transmission line located east of Edmonton (the “Cooking Lake Development”). In its application, AltaLink proposed its preferred route and an alternate route for the Cooking Lake Development. The preferred route was opposed by a group of interveners called the Cooking Lake Opposition Group (“CLOG”) and the alternate route was opposed by the Cooking Lake Alternate Route Resistors (“CLARR”), Strathcona County Concerned Residents Group (“SCCR”), and Leduc County.
The AUC approved the Projects, including the Cooking Lake Development, for the reasons summarized below.
AUC Process
As the transmission facility owner for the service area surrounding Edmonton, AltaLink submitted the facility application for the Cooking Lake Development as a project within the AESO’s Needs Identification Document Approval U2014-183.
The application was considered in a public hearing in Edmonton. Although AltaLink’s application was for the approval of five facilities, the Cooking Lake Development was the primary focus of the hearing (77 of the 79 statements of intent to participate (“SIP”) in the proceedings related to the Cooking Lake Development).
Consultation
A number of members of CLOG and CLARR submitted that the consultation program undertaken by AltaLink was inadequate or did not adequately address stakeholders’ concerns.
Notwithstanding such concerns, the AUC held that AltaLink began its participant involvement program early in its application development, made efforts to provide potentially affected parties with sufficient information to understand the proposed development and its potential impacts, and provided sufficient opportunity for parties to express their concerns.
The AUC concluded that AltaLink was reasonably responsive to concerns raised by stakeholders and had met the prescribed consultation requirements under AUC Rule 007 and previous AUC decisions.
Expert Evidence on Impact to Property Values
AltaLink, CLOG, and CLARR each hired experts in property valuation to give evidence in the proceedings. AltaLink hired Serecon Inc. (“Serecon”), CLOG hired HarrisonBowker Real Estate Appraisers Ltd. (“HarrisonBowker”), and CLARR hired Gettel Appraisal Ltd. (“Gettel”).
The AUC reviewed the evidence of each of these experts. In considering the evidence, the AUC considered not only the experts’ conclusions, but assessed each expert’s methodology in determining the weight to afford their respective evidence.
The AUC noted that all experts used a two step process to estimate property value impacts for AltaLink’s preferred route for the Cooking Lake Development versus alternative routes proposed by the interveners. In the first step, each expert estimated a range of impacts on property values based on in-house comparative analysis, review of third-party property value literature, and personal judgement.
In the first part of its analysis, Serecon used a paired sales analysis (“PSA”) methodology to estimate the effects of a 138 kV transmission line on agricultural and residential properties. PSA estimates impact on property value by comparing pairs of sample properties that are similar to the subject property, with the only difference being the existence of a 138 kV high voltage transmission line (“HVTL”) near one of the properties in each pair.
In the second part of the analysis, Serecon estimated the impact on property values to properties located on or adjacent to the preferred route and alternative routes for the proposed transmission project. Serecon estimated that approval of the preferred route could negatively impact the value of 14 properties, with estimated impacts between 0 and 14 percent, with an average negative impact of 4 – 6.4 percent on property values. For the alternate route, Serecon estimated that 33 properties could be negatively affected. Serecon estimated negative impacts ranging from 0 to 15 percent, with an average negative impact of 4.5 to 7.4 percent. Serecon concluded that approval of the preferred route would have less overall impact on property values with regard to both the number of affected properties and the average impact to each property.
HarrisonBowker used similar PSA techniques to estimate the impact of HVTL to property values of nearby properties. Gettel relied on case studies to estimate the impact to property value and did not conduct PSA using original data.
The AUC stated that it preferred Serecon’s evidence to that of HarrisonBowker and Gettel because Serecon’s PSA was the most representative of the actual conditions along the preferred and alternative routes.
For the second part of Serecon’s analysis, the AUC noted that Serecon may have underestimated impacts to property values by assuming no impact to properties across the road from a transmission line or vacant properties. However, the AUC accepted Serecon’s conclusion that the overall negative impacts of the alternative routes would be greater than the impacts of the preferred route.
The AUC concluded that from the perspective of minimizing negative property value impacts, the preferred route was the superior option.
Impacts on Development and Transportation
CLOGG and CLARR members expressed concerns about the preferred and alternate routes’ impact to future development. CLOGG expressed concerns related to the preferred route while CLARR expressed similar concerns regarding the alternate route.
Leduc County’s expert, Mr. Preikikasaitis, stated that the preferred route better reflected the policy directions set out in the applicable Alberta land use framework, Capital Region Board plans, and local municipal development plans.
Leduc County also submitted as evidence a report from Mr. Willis of Bunt & Associates regarding the preferred and alternate route’s impacts on transportation in the area. Mr. Willis stated that plans for road improvements would necessitate the relocation of 11 km of transmission line, if the alternate route was approved.
The AUC agreed with AltaLink’s submissions that the preferred route would result in fewer negative impacts to future development and transportation upgrades and less impact to existing distribution lines. The AUC noted that the costs associated with disturbance to distribution lines are significant and are a cost that is borne by ratepayers.
Approval
The AUC approved the Projects, including the Cooking Lake Development, along the preferred route proposed by AltaLink.
