Conditional Approval – Application for Connection Closed – Application for Industrial System Designation Closed
In this decision, the AUC approved the application from Horseshoe Power GP Ltd. (“Horseshoe Power”) to construct and operate a 5.9-megawatt (“MW“) cogeneration power plant, designated as the Gull Lake Cogeneration Power Plant expansion (the ”Power Plant Expansion” or the “Project”). The AUC closed Horseshoe Power’s applications for a connection order and for an industrial system designation (“ISD”).
Introduction
Horseshoe Power owns and operates a six-MW Gull Lake Cogeneration Power Plant in the County of Lacombe, near Gull Lake. In Order 23404-D03-2018 the connection of the power plant to FortisAlberta Inc.’s (“Fortis”) distribution system was approved.
The Power Plant Expansion would involve the construction and operation of four 1.475-MW natural gas engine-driven electric power generating units. The proposed power plant expansion would use natural gas to generate electricity for export to the Alberta Interconnected Electric System (“AIES”) and would co-generate carbon dioxide and steam for use by a future greenhouse.
Fortis submitted a statement of Intent to participate (“SIP”) and later stated, it did not support the Project in its current configuration. Following information requests and clarification of the application, Fortis filed a letter of non-objection to the Project, limiting its effect to the technical aspect of the proposed interconnection. Fortis’ submissions indicates that its concerns with the Project related to the connection order and ISD applications. Fortis’ concerns with the connection application pertained to uncertainty with Horseshoe Power’s proposal. Its concerns with the ISD application pertained to Horseshoe Power’s intention to build its own distribution line to connect the Power Plant Expansion with its industrial operations located across Highway 792 and whether the Project meets the requirements for an ISD under Section 4 of the Hydro and Electric Energy Act (“HEEA”).
The AUC found it unnecessary to rule on Fortis’s standing in this proceeding because Fortis did not object to the Power Plant Expansion and the AUC closed Horseshoe Power’s connection application and its ISD application.
Sections 11 and 18 of the HEEA and Section 17 of the Alberta Utilities Commission Act were relevant to the AUC’s consideration of the application for the Power Plant Expansion.
Section 4 of the HEEA was relevant to the AUC’s consideration of the ISD application.
Application to Construct and Operate a 5.9-MW Power Plant
A noise impact assessment (“NIA”) for the proposed Power Plant Expansion was completed in accordance with Rule 012: Noise Control. The NIA concluded that the predicted cumulative sound levels at each receptor comply with the permissible sound levels set out in Rule 012.
Horseshoe Power stated that noise mitigation measures were installed on the existing generators, including sound insulation for the generator enclosures, building, and acoustic silencers for the inlets, outlets and engine pipes. It added that similar noise mitigation measures would be installed on the new generators to ensure compliance of the proposed power plant with Rule 012.
Horseshoe Power stated that the Project would have no ground, water, or wildlife impact. It stated all associated fertile areas would be mowed or sprayed for weed control to prevent and control weeds from forming on the expansion site and spreading to adjacent agricultural lands. A pre-disturbance nest search survey would be conducted and Alberta Environment and Parks’ (“AEP”) recommended minimum setback distances and restricted activity dates would be abided by.
Horseshoe Power stated that the emissions from the proposed power plant expansion would comply with the current provincial emissions standards and the Alberta Ambient Air Quality Objectives and Guidelines.
Findings
The AUC found that Horseshoe Power’s participant involvement program satisfied the requirements of Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations and Hydro Developments.
The AUC conditioned the approval of the power plant upon Horseshoe Power’s submission of confirmation of an updated Historical Resources Act approval no later than 30 days before the start of construction. The AUC also required Horseshoe Power to submit confirmation of AEP’s approval of its updated air emissions assessment no later than 30 days before the start of construction.
The AUC was satisfied with the submitted NIA and accepted Horseshoe Power’s commitment to install appropriate mitigation measures on the proposed generators to ensure compliance with Rule 012.
Application to Connect the Proposed Power Plant Expansion to the Alberta Interconnected Electric System
Horseshoe Power did not provide a statement from the distribution facility owner indicating that it was willing to connect the generating facilities, as required of an applicant who wishes to connect a power plant to the AIES at a distribution voltage level by Rule 007. Therefore, Horseshoe Power did not provide the information required by requirement IC1 in Rule 007. The AUC considered the information required in Rule 007’s IC1 to be critical to its assessment of a connection application, and that the absence of the required statement from Fortis was a deficiency that was material to the application. The connection application was accordingly closed.
Application for an Industrial System Designation
Horseshoe Power requested an ISD encompassing the Gull Lake Cogeneration Power Plant and the proposed power plant expansion.
Horseshoe Power stated that up to 10 MW could be supplied from the industrial system to the AIES.
Horseshoe Power submitted an economic assessment for the proposed power plant expansion showing that it expected to earn $2,096,600 in revenue from the sale of electric energy to the AIES on an annual basis, based on a power pool price of $55/MWh.
Findings
The AUC considers the principles and criteria found in Section 4 of the Hydro and Electric Energy Act when considering an application for an ISD. Section 4 permits an ISD where the development of on-site generation was a component of an efficient, highly integrated industrial process where on-site generation represents the most economical source of generation for on-site operations. The application must meet the information requirements of Rule 007.
In the absence of an application with meaningful, reliable and verifiable responses to the information requirements of Rule 007, the AUC was unable to determine whether Horseshoe Power’s application for an ISD reflects the development of on-site generation as a component of an efficient, highly integrated industrial process that represents the most economical source of generation for on-site operations.
The AUC closed the application for an ISD.
