Rates – Stranded Assets
Application
Shell Canada Ltd. (“Shell”) applied for permission to amend the industrial system designation (“ISD”) of the Scotford Industrial Complex to include the 58-megawatt Scotford Solar Power Project (the “Project”). Shell further applied for permission to add its owner and operator, SR Scotford Inc., a wholly owned subsidiary of Silicon Ranch Corporation, as a holder of the order.
Decision
The AUC approved the application.
Applicable Legislation
Hydro and Electric Energy Act, RSA 2000, c H-16 – ss 4 and 23.
Pertinent Issues
Shell, Air Liquide Canada Inc., Heartland Generation Ltd. and ATCO Energy Solutions Ltd. (“ATCO”) hold Order 26894-D03-20211 that designates the electric facilities at the Scotford Industrial Complex as an industrial system. The Project will supply low-carbon intensity electricity to the Scotford refinery.
The AESO expressed a concern that carbon reduction objectives could be used to establish a precedent for the more lenient issuance of ISDs. Shell stated that renewable electricity, connected behind the meter, was assessed as being the only method currently available to lower the carbon intensity of the electrical power consumed at the Scotford refinery within reasonable timelines. The AUC held that environmental objectives are not included in the criteria identified in s 4 of the HEEA and have, therefore, not factored into the determination.
The AUC accepted that the criteria of s 4 of the HEEA were assessed in the initial ISD. The AUC focused its consideration on whether the ISD, with the inclusion of the solar power plant, continues to meet the principles and criteria of s 4.
The AUC recognized that the Project will not be highly integrated with the industrial operations that it serves. However, because the AUC continues to view the larger industrial system as a complex facility comprising a number of large integrated industrial operations that process feedstock and produces primary products, and relies on highly coordinated operation and management of its constituent components, approval of the application was in the public interest. The AUC also took into account that the only change to the ownership of the industrial system arising from the amendment application would be the addition of SR Scotford Inc. as an additional holder of the Scotford ISD order. Moreover, the AUC was satisfied that the inclusion of the Project within the industrial system would result in a significant and sustained increase in the production and consumption of electric energy by the industrial operation. The AUC therefore approved the application.
