International Electricity Transmission Line – Constitution Act, 1867 – Section 92A
In this decision, the NEB considered an application by Manitoba Hydro for a permit pursuant to section 58.11 of the National Energy Board Act (“NEB Act”) to construct and operate the Manitoba-Minnesota Transmission Project (“the Project”). The Project included a 500 kV international power line (“IPL”) from the Dorsey Converter Station near Rosser, Manitoba to the border of the U.S.; and related changes to other IPLs.
The NEB found that the Project was and would be required by the present and future public convenience and necessity. The NEB, therefore, recommended that the Governor in Council (“GiC”) approve the NEB’s issuance of a certificate pursuant to section 58.16 of the NEB Act.
Project Overview
The figure below shows the location of the Project.
Jurisdictional Context
The NEB explained that:
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Prior to the 1982 amendments to the Constitution Act, 1867, regulation of interprovincial and international marketing was under the exclusive jurisdiction of the Parliament of Canada under its trade and commerce power in subsection 91(2) of the Constitution Act, 1867.
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As a result of the 1982 amendments and the addition of section 92A to the Constitution Act, 1867, provinces have concurrent legislative powers in relation to the export of electricity production to other parts of Canada – but notably not in relation to the export of electricity production from Canada.
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Section 92A created overlapping jurisdiction that reflected the complex competing interests of federal and provincial governments in resource development and management in Canada.
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The NEB Act was amended in 1990 to accommodate the overlapping jurisdiction it now shared with the provinces. Those amendments were an attempt to respect, to the extent possible, provincial sovereignty but preserve the federal government’s effective jurisdiction over the international export of natural resources.
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Portions of IPLs can, for example, be subject to provincial law to the extent that the power line is “within that province” under section 58.2 of the NEB Act.
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The physical point on a power line where NEB jurisdiction over IPLs begins, as opposed to that considered to be “within that province,” is not defined in the NEB Act. A general rule of practice evolved over the years where the NEB assumed jurisdiction over IPLs from the last substation before an international border crossing.
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In many cases, this approach limited the geographic jurisdiction of the NEB to a few kilometres or, on some occasions, to a few metres. The practice continued for decades, and there had been no challenge from provinces or proponents as to the reasonableness of the approach.
Facilities, Safety, and Emergency Response Matters
The NEB found that the overall design of the proposed Project used sound engineering practices in respect of layout, tower design, and line and equipment selection.
The purpose of the Project was to increase import and export transfer capability limits across the Manitoba to U.S. interface (“MHEX”), the Manitoba Hydro transmission system interconnection to the U.S. transmission system through four IPLs. The Project included construction of the new Dorsey IPL (the “Dorsey IPL”) and alterations to each of the existing Glenboro IPL and Riel IPL.
The NEB noted that the existing long-term power transfer capability of the MHEX, including a 75 MW reliability margin, was 2175 MW (summer and winter) for exports and 775 MW (summer and winter) for imports. With the proposed Dorsey IPL in place, the export power transfer capability was expected to increase by 883 MW to 3058 MW, and the import transfer capability was is expected to increase by 698 MW to 1473 MW. Manitoba Hydro stated that the import transfer capability increase beyond 1473 MW was limited by a constraint in the connecting U.S. system.
Regarding the power transfer capability and impacts to connected bulk systems, the NEB found that the Project’s import transfer capability beyond 1473 MW could only be achieved upon mitigation of a constraint in the U.S.. To ensure that operations in the U.S. would not impose unacceptable operating conditions on the neighbouring Canadian transmission systems, the NEB imposed, as condition of approval, limits on import and export of power, and required Manitoba Hydro to file confirmation from the provincial system operators (Manitoba and Saskatchewan) that the reviewed operating scenarios would not impose unacceptable operating conditions on their electric systems.
Economic and Financial Matters
To determine if there was an economic need for the Project, the NEB assessed the likelihood that Project would be used at a reasonable level over its economic life and would contribute to Canadians benefiting from efficient energy infrastructure. The NEB considered information relating to the supply, demand and load conditions of the markets the Project would service, as well as other benefits of the proposed Project. The NEB also considered the financial viability of the Project.
The NEB found that:
(a) there was an economic need for the Project;
(b) there was adequate supply, markets, and contracts such that it was reasonable to expect the Project to be used and useful over its economic life;
(c) the use of the line for both exports and imports would financially benefit Manitoba Hydro and Manitoba ratepayers; and
(d) the Project would improve the reliability of the integrated system, and Manitoba ratepayers would benefit from the reliable provision of electricity.
Public Consultation
The NEB explained that applicants are expected to undertake an appropriate level of public involvement, commensurate with the setting, nature, and magnitude of a project.
The NEB acknowledged Manitoba Hydro’s efforts to identify and consult with potentially affected and interested stakeholders and its commitment to continuing to consult throughout the lifecycle of the Project. The NEB found that the overall design and implementation of Manitoba Hydro’s public consultation program was appropriate for the scope and scale of the Project. The NEB noted that Manitoba Hydro had been consulting on the Project since 2013 and had committed to continuing consultation during all phases of the Project.
Indigenous Matters
The NEB found that approval of the Project was consistent with section 35 of the Constitution Act, 1982 and the honour of the Crown.
In reaching this conclusion, the NEB stated that it had considered:
(a) the information submitted regarding the nature of potentially affected Indigenous interests in the Project area, including information on constitutionally protected Indigenous and Treaty Rights; and
(b) the anticipated effects of the Project on those interests and the concerns expressed by Indigenous communities.
In light of the nature of the interests and the anticipated effects, the NEB evaluated the consultation undertaken, including the mandated engagement performed by Manitoba Hydro and the consultation undertaken through the NEB’s project assessment process. The NEB also considered the mitigation measures proposed to address the various concerns and potential effects.
The NEB found that:
(a) there was adequate consultation and accommodation for the purpose of the NEB’s decision on this Project;
(b) Manitoba Hydro designed and implemented appropriate and effective engagement activities for the Project, and the NEB process was appropriate for the circumstances;
(c) any potential Project impacts on the interests, including rights, of affected Indigenous communities, after mitigation, were not likely to be significant and could be effectively addressed; and
(d) the Project would benefit local, regional and provincial economies and result in increased employment for Indigenous individuals and contracts for Indigenous-owned businesses.
Environmental and Socio-Economic Matters
The Canadian Environmental Assessment Act, 2012 (the “CEAA, 2012”) required the NEB, as a responsible authority, to make a determination of the significance of Project effects. The NEB conducted an environmental assessment of the Project and found that the proposed Project was not likely to cause significant adverse socio-economic or environmental effects as defined within the CEAA, 2012.
The NEB found that the Project’s potential contributions to cumulative effects in the region had been substantially reduced through Manitoba Hydro’s Project design and would be further reduced as a result of the mitigation measures (including adaptive management measures). The NEB found that some of the Project’s potential adverse residual effects might interact with effects from other projects and activities over the long-term and in some cases, be permanent. However, the NEB found that most residual effects would be low to moderate in magnitude and restricted to localized areas, and would not likely result in significant adverse cumulative effects.
