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Hammerhead Resources Inc. Gold Creek Industrial System Designation, AUC Decision 27771-D01-2022

Link to Decision Summarized

Facilities – Electricity

Application

Hammerhead Resources Inc. (“Hammerhead”) owns and operates three oil battery facilities and an associated water storage facility (the “Facilities”) in the Gold Creek area, southeast of the city of Grande Prairie. Each of these four facilities is served by separate natural gas generators. The Facilities are not connected to the Alberta Interconnected Electric System. Hammerhead proposed to connect the Facilities through a new 15-kilometre (“km”) 25-kilovolt distribution line. The distribution line would allow Hammerhead to utilize existing generation from one oil battery facility to power all four facilities and shut down the remaining generators. Hammerhead requested that the AUC issue an industrial system designation (“ISD”) for the electric system.

Decision

The AUC denied Hammerhead’s application for an ISD because the electric system proposed to serve Hammerhead’s facilities did not meet the criteria for an industrial system under s. 4(3)(a) of the Hydro and Electric Energy Act (the “HEEA”).

Applicable Legislation

Hydro and Electric Energy Act, RSA 2000, c H-16 – s. 4(3).

Pertinent Issues

The Facilities are located at four different locations, separated by distances ranging from 800 metres to 4 km. Each facility has its own generating assets to power the on-site equipment. Given this, the AUC found that the Facilities are not physically integrated, are not dependent on each others’ operation, and do not involve any co-production of a useful by-product such as steam or heat for an industrial operation. The AUC was therefore not satisfied that there is a high degree of integration of the components of the Facilities as required under s. 4(3)(a) of the HEEA.

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