Facilities – Industrial System Designation
In this decision, the AUC approved applications from NuVista Energy Ltd. (“NuVista”) to construct and operate a new thermal power plant, to connect the thermal power plant to the Alberta Interconnected Electric System (“AIES”), and for an industrial system designation (“ISD”) that encompasses all electric facilities at the existing Wembley Gas Plant.
NuVista owns and operates the Wembley Gas Plant (gas plant) in the La Glace area, approximately 25 kilometres north of the town of Wembley. NuVista applied for permission to construct and operate a 16.4-megawatt (“MW”) natural gas-fired power plant, designated as the Wembley Thermal Power Plant (the “Power Plant”) within the existing boundary of the Wembley Gas Plant site.
The Power Plant would consist of eight Caterpillar G3520C natural gas-fired reciprocating engine generators, with a total generating capability of 16.4 MW, and a waste heat recovery system. Heat recovered through an installed water jacket cooling system and from the exhaust would provide approximately 11 MW of thermal heat energy for specific gas plant processes, which would offset the need for fuel gas consumption and associated emissions. NuVista estimated that 4.8 MW of excess power would be exported to the AIES.
Following the notice of application, the AUC received statements of intent to participate from AltaLink Management Ltd., ATCO Electric Ltd., and Heartland Generation Ltd. The statements of intent to participate commented on the broader issues related to Bill 86 regarding enabling self supply and export and s. 117(2) of the Electric Utilities Act (“EUA”). Under s. 117(2) of the EUA, under certain circumstances, the AUC may impose the condition that the owner of the industrial system be responsible for paying a just and reasonable share of the costs associated with the interconnected electric system. The AUC found that this proceeding was not an appropriate forum to discuss this issue. Consequently, the AUC denied AltaLink Management Ltd., ATCO Electric Ltd., and Heartland Generation Ltd. standing.
Is Approval of the Industrial System Designation in the Public Interest
The AUC determined that the application met the information requirements set out in Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydro Developments and Gas Utility Pipelines. The participant involvement program conducted by NuVista was also found to have complied with Rule 007.
The Noise Impact Assessment (“NIA”) submitted with the application concluded that mitigation measures were needed to allow the Power Plant to meet the permissible sound levels set out in Rule 012: Noise Control. NuVista undertook to implement the required noise control items proposed in the NIA. Relying on NuVista’s undertaking, the AUC accepted that the Power Plant would comply with the requirements of Rule 012.
NuVista has committed to implementing mitigation measures to reduce environmental impacts, including potential impacts to trumpeter swans and an identified eagle nest. In addition, NuVista applied for an updated Environmental Protection and Enhancement Act approval to incorporate the Power Plant.
The AUC found NuVista’s environmental evaluation to meet the requirements of Rule 007. The AUC was satisfied that with diligent implementation of the mitigation measures outlined in the environmental evaluation, the identified environmental effects of the project would be mitigated to an acceptable degree.
Does the Wembley Thermal Power Plant and Electric Facilities Meet the Requirements to be a Designated Industrial System
The AUC considered the ISD application in accordance with the principles and criteria set out in s. 4 of the Hydro and Electric Energy Act (“HEEA”). The AUC stated that, read broadly, s. 4(4) 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.
The AUC noted its understanding that NuVista sought an ISD to connect to the AIES with the intent to export electricity produced by the Power Plant in excess of the facilities’ electricity load. NuVista has stated that it would use the 11 MW of thermal energy for the gas plant’s glycol heating requirements and that connecting to the AIES would improve the Power Plant’s efficiency. The AUC was satisfied that the proposal to export the excess electricity will facilitate efficient exchange with the AIES of electric energy in excess of NuVista’s electricity requirements.
The AUC was satisfied that NuVista was not seeking the ISD to avoid system costs, as required by s. 4(2) of the HEEA. The AUC found that the requirements of s.4(3)(c) were not met because the components of the industrial operations are not under common ownership. Six companies have an interest in the gas plant, but NuVista has the largest interest in the gas plant and would own the Power Plant as of the date of the application. The other parties with interest in the gas plant did not object to the ISD application. The AUC, however, was satisfied that all of the separately owned components and all of the industrial operations are components of an integrated industrial process, and the proposed ISD consequently met the requirements of s. 4(4) of the HEEA.
The AUC noted that an ISD is intended to support generation that is needed and used for integrated industrial processes under s. 4(3)(d) of the HEEA. NuVista acknowledged that the generation capacity exceeds the gas plant’s electricity needs but stated that all waste heat produced by the generating units would be utilized.
The AUC determined that NuVista’s proposal met the principles and criteria for an ISD set out in s. 4 of the HEEA.
Pursuant to ss. 11 and 18 of the HEEA, the AUC approved the applications to construct and operate the Power Plant and to connect it to the ATCO Electric Ltd. distribution system. The AUC further granted the ISD application under s. 4 of the HEEA and ss. 2 and 117 of the EUA.