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AESO NID Application, AltaLink Management Ltd. and ATCO Electric Ltd. Facility Applications, Central East Transfer-out Transmission Development Project, AUC Decision 25469-D01-2021

Link to Decision Summarized

Needs Identification Document and Facility Application

In this decision, the AUC approved a needs identification document (“NID”) application from the Alberta Electric System Operator (“AESO”), and facility applications from ATCO Electric Ltd. (“ATCO”) and AltaLink Management Ltd. (“AltaLink”), to construct and operate a double-circuit, 240-kilovolt transmission line between ATCO’s Tinchebray 972S Substation and AltaLink’s Gaetz 87S Substation, and to alter the two substations and associated Transmission Line 9L16 to accommodate the two circuits.

Applications and Interventions

The AESO applied to the AUC for approval of the need to construct transmission development to enable additional generation integration capability in Alberta’s central east and southeast sub-regions. Specifically, the AESO requested that the AUC approve two 240-kilovolt (kV) circuits between Tinchebray 972S and Gaetz 87S substations, and construction milestones based on 0.5 per cent annual congestion on the central east sub-regions west transfer-out path, with timing of construction to be determined in a future reaffirmation study. Collectively, this project is referred to as the Central East Transfer-out Transmission Development Project (the “Project”).

ATCO and AltaLink applied to construct the facilities to meet the AESO’s identified need in their respective service territories and for interconnections of their transmission facilities. The applied-for routes are set out below.


Figure 1 Applied for Routes.PNG

In response to its notice of hearing issued on October 13, 2020, the AUC received statements of intent to participate from stakeholders objecting to the need and the routing options, some of whom formed groups. Standing was granted to numerous individuals, the Consumers’ Coalition of Alberta (“CCA”), Capital Power Corporation, NOVA Chemicals and the Métis Nation of Alberta (“MNA”). With respect to the facility applications, the Commission considered that persons who own or reside on property located within 800 meters of the finalized right-of-way of any of the proposed routes have standing to participate in the process.

NID Application

Planning Methodology

The AESO performed deterministic system planning studies to assess the performance of the existing transmission system in the central east area in accommodating projected renewable generation development, identify the need for transmission reinforcements, evaluate short-listed transmission development options, and select the preferred transmission development option. The AESO also adopted a new approach in applying a congestion assessment based on probabilistic studies to estimate the levels of congestion in the study area, taking into account the projected increases in renewable generation.

The congestion assessment informed the establishment of construction milestones for the AESO’s transmission development and the associated timing of the need for the staged transmission development. The phased approach would include two stages of construction, with each stage triggered by a construction milestone. The AESO committed to conducting a reaffirmation study once the incremental generation reaches the upper limit of the milestone range at each stage. The reaffirmation study would take into account the most up-to-date information in the study area.

The AESO proposed to de-link the need decision (based on deterministic studies) from the construction timing decision (based on probabilistic congestion assessment) via a milestone monitoring process. As a result, it would mitigate the risk of unnecessary system enhancement and expenditure.

Need

According to the AESO, the driver of the need for the Project is the forecast renewable generation interest in the area, not the load growth. It asserted that in light of a forecast increase in renewable generation development in the central east and southeast sub-regions (study area), an expansion of the transfer-out capability of the transmission system is needed to enable surplus generation to be transferred from the study area to adjacent load centres. The AESO submitted that the study area has a high interest for renewable generation, with a forecast of 900 MW by 2023 and up to 4,600 MW by 2031.

Due to uncertainties associated with the timing, volume, and offer behaviour of the replacement or retirement of the existing thermal generation in the central east sub-region, generation dispatches using statistical and market simulation methods were developed for two thermal dispatch scenarios: a Peaking Scenario where thermal generation has a lower capacity and energy dispatch than the historical thermal fleet, with primarily coal to gas conversion.

The AESO also put forward a Baseload Scenario where thermal generation has similar capacity and energy dispatch as the historical thermal fleet, with new gas replacement. The AESO viewed these two scenarios as bookends to cover a reasonable range of possibilities. These two Scenarios were created by the AESO in late 2018 or early 2019. In its rebuttal evidence, the AESO indicated that in light of changes in the power industry, the Peaking Scenario is the more likely future outcome compared to the Baseload Scenario.

Findings

The AUC accepted that the renewable generation interest in the area was evidence and that the existing transmission system in the central east area is thermally constrained due to the limited transfer-out capability. Under both the Baseload and Peaking Scenarios, the existing transmission system would not be able to meet the forecasts up to 4,600 MW by 2031 because the available generation integration capability is 135 MW to 880 MW.

The AUC also accepted that the applied-for option to meet the need was the best option available in terms of generation integration capability and operational flexibility.

With regard to the AESO’s congestion assessment, and the establishment of milestones, the AUC was satisfied that in conducting the reaffirmation study, the AESO will take into account the most up-to-date information in the study area including location, size and type of incremental generation that has met the certainty criteria, any changes to asset ratings enabled through optimization, any additional system optimization enabled within the study area and the most recent forecast for thermal generation production profiles in the study area.

Finally, the AUC was satisfied that the AESO met notification and consultation requirements and discharged its public interest mandate. The AESO’s NID application was approved.

Facility Applications

The AUC approved the double-circuit steel monopole structures proposed by the Transmission Facility Operators (“TFOs”) in their facility applications. These structures met the AESO’s NID, the approved double-circuit configuration and were the least impact structures when considering the TFOs’ line optimization studies and feedback from landowners during consultation.

Although the parties could not agree on the quantum of savings, all agreed that the use of guyed structures would result in cost savings. As such, in areas of the approved route (i.e., corner or dead-end locations) that can technically accommodate the use of guy wires, the TFOs were directed to consult with landowners on the potential use of a guyed structure on their land and inform them of any additional land payments resulting from their use. In those locations where the landowner agrees to have a guyed structure on their land, the AUC directed AltaLink and ATCO to use such a structure.

With regard to concerns raised regarding clubroot risk, the AUC found that the TFOs’ proposed approach to clean prior to entering separately-owned parcels sufficiently mitigates clubroot risk and that cleaning between every quarter section is not required. The AUC accepted that soil disturbance has a high risk of the spread of clubroot, that ATCO’s clubroot policy is sufficiently protective during these events, and that a condition requiring level 3 cleaning during winter conditions is consequently not required.

The AUC was satisfied that the environmental effects of the project can be mitigated to a reasonable degree if the TFOs adhere to commitments, including abiding with all pertinent provincial and federal environmental legislation and guidelines and diligent implementation of the mitigation measures proposed in their respective environmental evaluation reports and environmental protection plans.

On the issue of electromagnetic fields (“EMF”), the AUC found that the evidence before it did not support a conclusion that there will be health effects attributable to the EMF produced by the proposed transmission line at the nearest residences. The AUC expects AltaLink and ATCO to adhere to its commitment to conduct pre- and post-constructing monitoring at the request of stakeholders and explain to them the findings of those measurements. Likewise, the AUC found that conditioning approval of the transmission line on magnetic field levels is not required given that the predicted levels are far below the exposure guidelines for the general population.

The AUC found that the transmission line will not be a significant source of audible noise and was satisfied with both AltaLink’s and ATCO’s commitments to comply with the requirements of Rule 012 and applicable bylaws.

Based on the evidence before it, the AUC found that the proposed Project, including the Tinchebray 972S Substation, does not pose a higher fire risk than for a typical transmission development. The AUC agreed that limited access into the area may decrease reaction time for emergency responders. To mitigate this concern, it encourages ATCO to consult with landowners and first responders in the area to develop a fire access plan.

The AUC considered routes and route options proposed by ATCO. It found that ATCO’s preferred route would have a lower overall impact compared to its alternate route. It also made findings regarding specific route options along the preferred route proposed by ATCO.

AltaLink proposed five different routes, together with route variants and line segments. The AUC found that AltaLink’s South Alternate Route had the lowest overall impact. The AUC also considered and made findings on specific route variants and line segments proposed by AltaLink.

The AUC found that the alterations to Gaetz 87S Substation and Tinchebray 972S Substation proposed by the TFOs are appropriate and necessary to connect the transmission lines approved in this decision. Similarly, the alteration to Transmission Line 9L16 is minor in nature and required to connect the approved 240-kV transmission lines. The AUC was satisfied that the expansion of the fence boundary at the Tinchebray 972S Substation is necessary to accommodate the new substation equipment and that there is sufficient space for the expansion.

Duty to Consult

The MNA participated in this proceeding as the representative of more than 3,872 of its members, to whom it refers to as citizens. It stated that its members have harvesting and other rights affirmed in Section 35 of the Constitution Act, 1982 that may be affected by the project.

The AUC was satisfied that its decision on the applications before it in this proceeding amounts to conduct that may adversely affect the exercise of Métis harvesting or traditional cultural practices in the project area, and that the duty to consult was triggered as it relates to Métis, as represented by the MNA.

The AUC made note of consultation activities undertaken by AltaLink and ATCO regarding the applications. Based on the characteristics of the parcels identified by the MNA as areas of interest and the project area in general, the AUC considered that any impact of the approved project on Métis harvesting and traditional land use will be minimal, temporary in nature and can be reasonably mitigated.

Participant Involvement Program

The AUC found that the participant involvement programs undertaken by ATCO and AltaLink met the requirements of Rule 007. The AUC recognized that many stakeholders had concerns about the participant involvement program for the proposed transmission line. However, the AUC was of the view that the participant involvement programs were sufficient to communicate to potentially affected parties the nature, details, and potential impacts of the project. It was also satisfied that the participant involvement programs gave potentially affected parties an opportunity to ask questions and to express their concerns.

Erosion Around the Tinchebray 972S Substation Area

The AUC noted that a stakeholder’s land is located immediately east and south of the Tinchebray 972S Substation. The stakeholder asserted that since its construction, the Tinchebray 972S Substation has significantly changed the drainage patterns on his lands, resulting in washout, erosion and flooding. He also stated that access to significant portions of his land has been lost.

The AUC considered that Alberta Environment and Parks (“AEP”) is the appropriate regulator to address the alleged erosion caused by surface water runoff from the substation lands and the claim that ATCO is not operating in compliance with its Water Act licence because these issues relate directly to a license issued under AEP authority. In addition, it would be inappropriate to condition an approval on matters not directly related to the application before it.

Likewise, the AUC noted it was not in a position to review or approve future drainage plans for the Tinchebray 972S Substation site. It agreed with ATCO that AEP has both the legislative authority and the technical expertise to adjudicate this issue under the Water Act.

Conclusion

In conclusion, and subject to conditions outlined in the decision, the AUC approved the applications submitted by the Alberta Electric System Operator, ATCO Electric Ltd. and AltaLink Management Ltd.

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