Facilities – Industrial System Designation
In this decision, the AUC approved applications from 1195714 Alberta Ltd., a subsidiary of Pembina Pipeline Corporation (“Pembina”), to construct and operate a new cogeneration power plant, to connect the cogeneration power plant to the Alberta Interconnected Electric System (“AIES”) and for an industrial system designation (“ISD”) that included all electrical facilities at the existing Empress Natural Gas Liquids Straddle Plant (the “Empress Plant”).
Application for new Cogeneration Power Plant
Application
Pembina applied on behalf of 1195714 Alberta Ltd. for a cogeneration power plant that would consist of a natural gas-fuelled turbine generator and a heat recovery unit to capture thermal energy from the turbine’s exhaust gas. Pembina stated that the power plant would provide 45 megawatt (“MW”) of electricity and 40 MW of thermal energy for use by the Empress Plant’s extraction and fractionation operations. The proposed cogeneration power plant would be powered by fuel gas blended with regeneration gas from on-site propane and butane treating. The power plant would be located within the existing boundaries of the Empress Plant. Pembina expected the power plant to be in service in January 2023.
Pembina provided a noise impact assessment (“NIA”) for the proposed cogeneration power plant. The NIA predicted that three theoretical receptor locations would experience cumulative sound levels between 0.1 dBA and 1.2 dBA higher than the nighttime permissible sound level of 40 dBA. The closest actual residence identified in the NIA was 2.0 kilometres away from the Empress NGL Straddle Plant’s fence line. The NIA attributed the dominant noise source at the three theoretical receptor locations that would experience exceedances of the nighttime PSL to nearby facilities owned by Plains Midstream Canada ULC.
Stantec Consulting Ltd. (“Stantec”) conducted an air quality assessment to evaluate the effects of the addition of the proposed cogeneration power plant on ambient air quality. The assessment determined that maximum ambient nitrogen dioxide (NO2) and sulphur dioxide (SO2) concentrations associated with the Empress NGL Straddle Plant would be below the Alberta Ambient Air Quality Objectives (“AAAQO”).
AUC Findings
The AUC noted that while the NIA identified cumulative sound levels at certain theoretical receptor locations to be above the nighttime PSL of 40 dBA, these predicted exceedances were largely attributed to the nearby Plains Midstream facilities.
The AUC was prepared to approve the project notwithstanding the predicted exceedances, given that: (a) the Plains Midstream facilities were the dominant noise sources in the area; (b) Pembina had committed to implementing mitigation measures to limit further sound level increases; and (c) there were no residences within 1.5 kilometres of the Empress Plant. The AUC found the cogeneration plant to be in the public interest.
Connection Application
Pembina applied on behalf of 1195714 Alberta Ltd. to connect the proposed cogeneration power plant, located within the Empress Plant site, to the AIES to facilitate the export of excess electricity.
Pembina stated that it filed a system access service request (“SASR”) with the Alberta Electric System Operator (“AESO”) on May 13, 2019, seeking a “Behind the Fence” addition of the proposed cogeneration power plant. Pembina stated that there would be no change to the existing demand transmission service (“DTS”) contract for the Empress Plant, and that it has requested a new supply transmission service (“STS”) contract.
The AUC found that the connection application had met the requirements set out in Rule 007 and that the approval was in the public interest.
ISD Application
Legislative Scheme
The AUC stated that read broadly, Section 4 of the Hydro and Electric Energy Act (“HEEA”) permits an ISD where the development of on-site generation is a component of an efficient, highly integrated industrial process where on-site generation represents the most economical source of generation for on-site operations.
AUC Findings
The AUC accepted that Pembina, on behalf of 1195714 Alberta Ltd. sought an ISD because the use of its own internal supply of electricity would be the most economical source of generation to meet its integrated industrial processes. The AUC was also satisfied that Pembina’s proposal to export excess electricity in the case of a load rejection event would facilitate the efficient exchange, with the interconnected electric system, of electric energy beyond Pembina’s own requirements in very limited circumstances.
The AUC was satisfied that Pembina was not seeking an ISD to avoid system costs and the designation would not result in an uneconomic bypass. The AUC noted that Pembina would continue to import electricity from the AIES via an existing DTS contract to satisfy the Empress Plant’s load requirement. Further, Pembina had applied for an STS contract with the AESO. Pembina would pay tariffs for its exchange of electricity with the AIES in accordance with its DTS contract and applied for STS contract.
The AUC found that Subsection 4(3)(c) of the HEEA had not been met as there was not common ownership of all the components of the industrial operations. While 1195714 Alberta Ltd. had sole ownership of the proposed cogeneration power plant and the Empress NGL Fractionation Facility, AltaGas Extraction and Transmission Limited Partnership has a minor ownership interest in in the Empress NGL Extraction Facility and did not object to the application for an ISD. The AUC was satisfied that all the separately owned components and all of the industrial operations are components of an integrated industrial process. Consequently, it found that the proposed ISD met the requirements of Subsection 4(4) of the HEEA.
The AUC found that granting the ISD would, as required, be consistent with the principles set out in Subsection 4(2) of the HEEA and the criteria found in Subsection 4(3) of the HEEA.
Decision
Pursuant to sections 11 and 19 of the HEEA, the AUC approved the application for a new 45-MW cogeneration power plant
Pursuant to Section 18 of the HEEA, the AUC approved the application to connect the cogeneration power plant to the AIES.
Pursuant to Section 4 of the HEEA and sections 2(1)(d) and 117 of the Electric Utilities Act, the AUC approved the application for an ISD.
