Dear Editor:
Re: Rimbey Review letter to the editor, “ACC wants higher power bills?”
The Alberta Electric System Operator (AESO) wishes to address misinformation that appeared in your Dec. 14 publication in a letter to the editor from Joe Anglin.
As the independent, not-for-profit organization that plans and operates the electricity grid for the benefit of all Albertans, the AESO is mandated under the Government of Alberta’s Transmission Regulation to ensure that the transmission system is built to effectively operate congestion free. An unconstrained grid provides certainty to those who invest in new generation projects that they will have the ability to move their electricity to Alberta households and businesses. It also gives those in other industries the confidence to do business in the province, secure in the knowledge that power will be there when they need it.
To meet this mandate, the AESO’s team of engineers, economists and planners analyze electricity consumption patterns in every area of the province and integrate data from multiple sources including the Conference Board of Canada, Canadian Energy Research Institute and Canadian Association of Petroleum Producers to determine where the demand for electricity will grow, where and how much generation is required to meet that demand, and what additional transmission infrastructure is required.
Current forecasts show the system requires both expansion and reinforcement. Our existing transmission system, in various locations, is running close to capacity with congestion on the lines. Congestion adversely affects the price of electricity delivered to Albertans and upgrades to the system are needed now to preserve the overall reliability of the electricity grid.
Our provincial grid has not seen a major investment in the last 20 years. Yet, over this same time period, Alberta’s annual GDP has risen from $64 billion to nearly $292 billion, population has increased 45 per cent from about 2.5 million to 3.6 million, and our peak demand of electricity nearly doubled from 5,600 MW to 10,200 MW. Demand is forecasted to nearly double over the next 20 years, increasing by more than three per cent a year until 2028 and beyond. That’s a rate we have seen over the last 20 years and is equal to adding two cities the size of Red Deer to the power system each year.
Approximately 11,500 MW of new generation is needed over the next 20 years to ensure we have enough power to meet the needs of Albertans. As part of our mandate, the AESO connects any and all generation approved by the Alberta Utilities Commission, regardless of the type or location of the generation. While the AESO supports the development of local generation, we still need to connect it to a strong transmission grid for the market to work in a fair and efficient manner and for competitively priced electricity to be available to consumers everywhere in Alberta.
The AESO is committed to building a transmission system that is cost effective and meets our regulatory mandate. It is important to point out that cost estimates for transmission projects identified in the AESO’s Long-term Transmission System Plan are refined as projects move forward and technical scoping, engineering studies, stakeholder consultation and additional in-depth analysis are completed. Our planning function balances cost with the goal of achieving an unconstrained transmission system. To manage cost impact, we are introducing a competitive procurement process to get the best value for all Albertans. We also use other cost reduction tools as appropriate. They range from staging of projects to life extension of an existing project.
The Heartland Transmission Development Project was identified as one of four critical transmission infrastructure (CTI) projects and approved under the Government of Alberta’s Electric Utilities Act in the fall of 2009. Reasons for the increase to the original estimated cost of the Heartland project include expansion in scope and additional commodity and land costs incurred by the transmission facility owner. Ultimately, it is the Alberta Utilities Commission’s role to ensure the costs remain prudent.
Transmission infrastructure is a public good that must be available in advance of need; Alberta’s quality of life and economic well-being depends on it. The AESO encourages you to visit our public engagement website for more information about the need for transmission upgrades in our province. Please go to www.poweringalberta.com to learn more.
Shan Bhattacharya,
Vice-President, Transmission
Alberta Electric System Operator