Power-line projects thrown open to competitive bidding process

Calgary Herald

Regulation change necessary to expand process

By Darcy Henton, Calgary Herald February 16, 2013

The Alberta Utilities Commission has ruled the construction and operation of two new major power lines must be contracted out through a competitive bidding process, but critics who
support the change say it’s too little and too late.

The decision announced late Thursday by the government-appointed commission applies only to two critical transmission infrastructure projects planned for the Fort McMurray area and intertie
lines – not the two controversial high-voltage north-south lines already approved at a cost of $3 billion or the Edmonton-area Heartland project.

“This is a case of the PC government closing the barn door once the horses have gone,” said NDP Leader Brian Mason.

The application was brought forward by another arms-length government agency, the Alberta Electric System Operator (AESO), in 2011. AESO spokeswoman Ally Taylor said the agency is
reviewing the decision to see if it satisfies the original intent of introducing competition to Alberta’s transmission sector.

“It was intended to be a generic process that can be used for other future projects,” she said.

“Certainly the intent was not just to design it for one project, or even two, but beyond that.”

The commission found the scope of the application of the competitive process cannot be expanded to include all major infrastructure projects that are not critical transmission
infrastructure projects without changes to the Electric Utilities Act and transmission regulations.

But Colette Cherkerda, executive director of Alberta Direct Connect Consumer Association, urged the government to make amendments to enable the competitive process to be used on other
large transmission projects to help control costs.

“Directionally, I think it is good in that it provides an opportunity to bring some competitive pressures to bear on transmission costs,” she said.

Alberta Utilities Commission (AUC) spokesman Jim Law said that if desired, with a change in legislation, AESO could come forward with the plan as a basis for a more generic model for
other major power line projects.

But Alberta Energy spokesman Mike Deising said the government has no plan to change the law or bring forward new legislation to do that.

“At this point it is just the two Fort McMurray lines,” he said.

“We will wait to see how this process unfolds.”

Vittoria Bellissimo, executive director of the Industrial Power Consumers Association of Alberta, said the industry group is concerned such a long and expensive development process will be used only on the two lines.  But she said allowing more proponents to bid on the two projects is a positive feature.  “Alberta would do well to have new Transmission Facility Owners competing against the incumbents,” she said. “We want everyone to sharpen their pencils and work toward reducing the delivered cost of electricity for ratepayers.

AltaLink, which is building one of the north-south lines, said it was looking forward to participating in the competitive process. “We’ve been keeping the lights on in Alberta – between us and our predecessor – for the last 100
years so we’re well qualified to continue to do it in a competitive world,” said spokesman Scott Schreiner.

“The goal is to deliver safe, reliable and affordable electricity to everybody in Alberta and I think that’s going to continue.”

Officials at ATCO, which is building the second north-south line, were not available for comment.

Land rights lawyer Keith Wilson said the AUC ruling follows the theme of other recent electricity file decisions by the provincial government. Like the repeal of Bill 50, which gave cabinet arbitrary power to approve the critical transmission infrastructure without a public hearing to determine if they were necessary, it comes after most of the decisions have been made and the money has already been spent, he said. He, too, urged the government to amend the law to enable competitive bidding on all major future transmission projects.

“They are the government,” he noted. “They have the key to the lawmaking machine in the legislature. Save us these billions of dollars.”
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