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Express Pipeline Ltd. Application Pursuant to Section 117(1)(a) of the Electric Utilities Act for an Exemption (AUC Decision 23394-D01-2018)

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Electric Utility


In this decision, the AUC considered Express Pipeline Ltd. (“Express”)’s application to exempt a transmission line that it proposed to construct and operate (the “Proposed Express Line”) as well as the electric energy it would transmit, from the definition of “electric utility” in section 1(1)(o) of the Electric Utilities Act (the “EUA”).

The AUC denied Express’ application, based on its finding that, although section 117(1)(a) enables the AUC to make rules exempting “any facility or class of facilities from the definition of electric utility” under the EUA, the AUC had not enacted any such rules to provide for these exemptions. In the absence of such rules, the AUC found that it lacked the authority to grant the requested exemption.

Background

The Proposed Express Line would be a 69 kilovolt, three-phase radial power line mounted on single poles. It would be wholly situated in Alberta with a connection point near the border between Alberta and Montana that would connect to a transmission line currently owned and operated by Hill County. The electric supply would not come from the Alberta Power Pool. Instead, the Proposed Express Line would transmit power generated in the U.S. to the electric motors and auxiliaries at the Wildhorse Station, and all of its capacity would be reserved for use by Express.

Findings

The AUC rejected both propositions on which Express based its exemption request, namely:

(a) its expectation that the AUC had the authority to grant an exemption order similar to Order U98075 issued in 1998 by the Alberta Energy and Utilities Board (the “EUB”), granting TransCanada’s application for an exemption; and

(b) that Express owning and operating its own transmission line was its only reliable and economically viable alternative to ensure it received the service it required at the Wildhorse Station.

No Rules Authorizing AUC to Grant Exemption

The AUC found that although EUA section 117(1)(a) enables the AUC to make rules exempting “any facility or class of facilities from the definition of electric utility” under the EUA, the AUC did not enact any rules to provide for these exemptions. In the absence of such rules, the AUC lacked the authority to grant the requested exemption.

The AUC noted that, in making that finding, the EUB did not consider any particular rule nor did it discuss the need to create a rule to grant the exemption requested. As such, the board did not consider any particular rule nor did it discuss the need to create a rule to grant the exemption requested. As such, the AUC did not consider the EUB’s findings in Order U98075 to be helpful or persuasive in its consideration of Express’ application.

Means by Which Express May Receive the Service It Requires

The AUC considered that as the owner of the Wildhorse Station, Express satisfied the definition of a border customer under the Isolated Generating Units and Customer Choice Regulation. The AUC determined that Division 5 of the Isolated Generating Units and Customer Choice Regulation prescribed the means by which Express may have received the service it required at the Wildhorse Station, as follows:

(a) section 101(1) of the EUA required Express to approach FortisAlberta Inc. (“Fortis”) the owner of the electric distribution system where the Wildhorse Station was located to make arrangements for electric energy; and

(b) section 15 of the Isolated Generating Units and Customer Choice Regulation obliged Fortis to “make arrangements for the provision of electric energy” to a border customer located within its service area.

Summary

As the AUC did not establish rules that would allow for the requested exemption, and since the Isolated Generating Units and Customer Choice Regulation prescribed the means by which Express could receive electric energy, the AUC denied Express’ application for an exemption.

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