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Alberta Electric System Operator Needs Identification Document Application and Section 15(2) Application AltaLink Management Ltd. Facility Applications Vauxhall Area Transmission Development, AUC Decision 27776-D01-2023

Link to Decision Summarized

Electricity – Facilities

Application

The Alberta Electric System Operator (“AESO”) filed a needs identification document (“NID”) application, for approval of the need for the Vauxhall Area Transmission Development (the “NID Application”). The AESO also requested an exception under s 15(2) of the Transmission Regulation (“T-Reg”) from its duties to make arrangements for the expansion or enhancement of the transmission system so that, under normal operating conditions, all anticipated in-merit electricity can be dispatched without constraint (the “S 15(2) Application”).

AltaLink Management Ltd. (“AML”) filed two applications to meet the need identified by the AESO (the “Facility Applications”). AML applied for approval to restore the capacity of Transmission Line 879L by replacing 21 structures, modifying 38 structures, and removing 1.6 kilometers of underbuilt distribution line. AML also applied for permission to rebuild Transmission Line 610L.

Decision

The AUC approved the applications from the AESO and AML for the Vauxhall Area Transmission  Development.

Pertinent Issues

NID Application

The AESO stated that real-time congestion was occurring in the AESO’s Vauxhall and Medicine Hat planning areas and that generation curtailment is necessary to address thermal violations on transmission lines 610L and 879L. To address congestion and generation curtailment, to remove thermal criteria violations, and to enable additional generation integration capability in the Vauxhall area, the AESO evaluated several transmission development options, including upgrading old and constructing new transmission lines.

As a preferred option, the AESO selected constructing a new 138-kilovolt (“kV”), 173-megavolt-ampere (“MVA”) circuit between the existing Fincastle 336S and Taber 83S substations, discontinuing Transmission Line 610L between Fincastle 336S and Taber 83S substations after the new 138-kV circuit is in service, and upgrading Transmission Line 879L to 118 MVA (the “Preferred Option”).

The AESO submitted that the proposed transmission development would reduce the frequency and magnitude of congestion to zero percent.

The AUC approved the AESO’s Preferred Option as the most cost-effective method. The alternatives proposed by interveners would be more costly and would require reconductoring, in addition to a more extensive replacement of the current 60-year-old transmission line in 10 to 15 years.

The AUC determined that the AESO, in evaluating the need and preparing its NID application, reasonably discharged its public interest mandate by different balancing factors, including cost, reliability and market access.

Facility Applications

Restoration of Transmission Line 879L

To meet the AESO’s identified need to increase the capacity of Transmission Line 879L, AML proposed to increase line clearances along the transmission line by completing several technical steps.

In considering the application for Transmission Line 879L, the AUC made the following findings: it dismissed the argument from AML that it could not have considered a reroute based on the AESO’s direction; compensation to landowners was outside its jurisdiction; the incremental impacts from the alterations to restore the transmission line were not significant;  AML’s participant involvement program was adequate; the transmission line’s continued presence in its current alignment will result in significant agricultural impacts; the impacts of restoring the transmission line outweigh the impacts of relocating it; and the agricultural and other impacts of the current alignment are outweighed by the additional costs and delays, including those associated with prolonging congestion in the area, that would result from rerouting the transmission line. The AUC found this application to be in the public interest and approved the proposed facilities.

Rebuild of Transmission Line 610L

The AUC found that AML’s preferred route had lower overall impacts because it follows existing linear infrastructure reducing impacts to land, agriculture and environmental features. In addition, its siting represents an incremental change given that it largely followed the same alignment as the existing transmission line. The preferred route was also shorter and had lower cost with fewer agricultural impacts as it avoided cultivated fields and irrigation pivots.

The preferred route was expected to have fewer environmental impacts, primarily because it was sited in a road allowance and it was anticipated to have a lesser impact on soils and terrain, surface water, groundwater, vegetation and wildlife. The residences on the preferred route already had existing transmission infrastructure in close proximity to their properties resulting in incremental impacts to residences from the preferred route. The AUC found the preferred route to be in the public interest in accordance with s 17 of the Alberta Utilities Commission Act.

Exception Filing Under Section 15(2) of the Transmission Regulation

The AUC found that a s 15(2) application was required in the circumstances and approved the AESO’s exception application. As the Alberta Interconnected Electric System (“AIES”) was experiencing real-time congestion under normal system conditions on 138-kV transmission lines 610L and 879L in the AESO planning areas of Vauxhall and Medicine Hat, the AESO was curtailing generation in the area to address thermal criteria violations on those transmission lines.

Legislative framework

The AUC held that under ss 15(1)(e)(i) and (ii) of the T-Reg, the AESO must plan a transmission system so that, 100 percent of the time, transmission of all anticipated in‑merit electric energy can occur when all transmission facilities are in service, and 95 percent of the time, transmission of all anticipated in‑merit electric energy can occur when operating under abnormal operating conditions. This is known as the “100-95 requirement.” Congestion above the 100-95 requirement is known as “excess congestion.” Under s 15(1)(f) of the T-Reg, the AESO must make arrangements for the expansion or enhancement of the transmission system so that the 100-95 requirement is met.

When is a Section 15(2) application required?

According to the AUC, the AESO has the statutory duty to fairly and economically manage the timing for the construction of an uncongested system. The AESO also has statutory discretion in terms of the timing to achieve this objective. The AESO’s statutory discretion is limited by two key provisions: first, the AESO must exercise its powers and carry out its duties, responsibilities, and functions in a timely manner that is fair and responsible; and, second, s 15(1)(f) of the T-Reg establishes a duty for the AESO to make arrangements for enhancements or upgrades to the transmission system to avoid excess congestion.

The AUC was not persuaded by the AESO’s submissions that “making arrangements” should be interpreted generously to include steps such as the AESO initiating a project. The AUC understood “arrangements” to refer to putting things into order and following a plan. The AESO necessarily requires a degree of flexibility and discretion to carry out its statutory duties and the AESO’s interpretation would make s 15(2) applications even more exceptional, thereby reducing the regulatory burden. However, the interpretation proposed by the AESO would result in the AUC having effectively no oversight role concerning the AESO’s s 15(1)(f) duty.

When Should a Section 15(2) Application Be Filed?

The AUC found that s 15(2) does not require the AESO to make a s 15(2) application before excess congestion occurs on the system. The finding was based on the following reasons: first, s 15(2) of the T-Reg does not explicitly dictate when the AESO must make an exception filing to the AUC; second, the AUC was persuaded by the AESO’s submissions that congestion can arise quickly and unexpectedly; and third, transmission costs are paid by load customers and the AUC did not find it to be in the public interest to move forward with transmission projects until the AESO is sufficiently certain that they will be needed.

As a result, the AUC expressed an expectation that the AESO would file a s 15(2) of the T-Reg application before excess congestion occurs, when it is reasonable and practical to do so, and that the AESO will need to determine when to make a s 15(2) application on a case-by-case basis, balancing several key factors.

What Information Should be Included in a Section 15(2) Application?

The AUC found that the information that the AESO must include, at minimum, was based on the statutory scheme. Considering that the AESO has flexibility in terms of the timing to achieve its duties under s 15(1)(f), the AUC’s oversight role under s 15(2) in granting temporary, specific and limited exceptions, and the wording in s 15(2), the AUC found that a s 15(2) application should, at minimum, contain sufficient information for the AUC to assess the following:

  • The excess congestion forecasted or currently occurring;
  • The AESO’s plan to remedy the excess congestion; and
  • The period that the exception will apply.

The AUC found that the AESO has provided adequate information to demonstrate that a s 15(2) exception was needed in the circumstances and approved the application.

Compliance Filing

The AUC directed the AESO to file a compliance filing and provide an update on the record of this proceeding by September 30, 2024, advising if the excess congestion was remedied and, if not, when the AESO reasonably expects the excess congestion to be remedied.

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