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Wednesday, October 28, 2009

it's about the power grid: my thoughts on bill 50.

It is not difficult to understand why Bill 50: the Electric Statutes Amendment Act, 2009 has become a lightning rod for opposition to the governing Progressive Conservatives. The origins of the unease over Bill 50 can be traced all the way back to deregulation and the sale of TransAlta’s power lines, which led to the creation of AltaLink in 2002, but more recent politics have played a large role in the toxicity of the debate.

Transmission line towers and high tension lines that carry current generated at TVA's Wilson Dam hydroelectric plant, near Sheffield, Ala. (LOC)Towers Of Power
In June 2007, it was uncovered that a private investigator hired by the now dissolved Alberta Energy Utilities Board had posed as a landowner in order to participate in conference calls of groups opposed to major power-line projects and their lawyers. Premier Ed Stelmach defended the hiring of the private investigator, "Whether real or not, there was some people to insure there wasn’t any harm done to the members of the AEUB." In the same month, Edmonton-Calder NDP MLA David Eggen was barred from public hearings on the power lines. In Spring 2009, opposition to Bill 50s sister act, Bill 19: The Land Assembly Area Project Act, created a political stir that had not been seen in rural Alberta in recent memory.

The Lavesta Area Group, led by landowner Joe Anglin, have been the public face of opposition against transmission expansion, and they have been joined in their public opposition to Bill 50 by by Enmax, the Liberal Official Opposition, the NDP Opposition, anti-nuclear advocates from the Peace Country, and Calgary Mayor Dave Bronconnier.

There are legitimate concerns about the construction of new power lines, but I have been less than convinced by many of the arguments raised by the opponents of Bill 50. For example, arguing that upgrades are simply a cash grab by the large energy companies on the back of the ratepayer appears to be an argument with political traction, but it doesn't address the more important debate behind the Bill 50:
'Corporate greed versus the ratepayer is not the discussion Albertans should be having...  they should be discussing whether the powers granted to the provincial government in Bill 50 are the most responsible manner in which to proceed with essential investments in our transmission infrastructure.'
In June 2009, the Alberta Electric Systems Operator (AESO) released their Long-term Transmission System Plan and recommended that an estimated $14.5 billion be invested in necessary upgrades to our provincial transmission system’s capacity. This includes the construction of new high-capacity power lines between Edmonton and Calgary, and connections to Fort McMurray and the Industrial Heartland (in parts of Sturgeon, Strathcona, and Lamont counties). The plan also recommends new transmission development in southern Alberta to integrate wind energy.

A number of opponents to Bill 50 have pointed out that power demands have dropped in Alberta. While electricity demands from certain sectors may have lowered during the recession, it would be irresponsible not to ensure that the grid will have the capacity to handle an increase when our economy starts growing again (for example, future projects such as the three proposed bitumen upgraders in Sturgeon County).

When reading Bill 50, I discovered that the amendments do not remove consultation procedures, but only provide the option to bypass the needs hearing and move directly to the second hearing where the exact placement of the power lines is determined.
41.1(1)  The Lieutenant Governor in Council may designate as critical transmission infrastructure a proposed transmission facility if it is contained in a plan that is prepared by the Independent System Operator pursuant to this Act or the regulations...
Bill 50 would give the provincial Cabinet more control over which power lines are built and when, and the Alberta Utilities Commission would retain control over where they are built. It is up to Albertans to hold their elected officials responsible for the decisions they make daily, including those decisions related to the future of our power grid.

It has been twenty-years since Alberta's power grid has had large-scale upgrades and as demand on the grid has increased by the equivalent of a city twice the size of Red Deer every year since 2001, the likelihood of running over-capacity has become closer to a reality. Over $200 million worth of electricity (the equivalent of power for 350,000 homes) was lost in 2008 through 'line-loss' that occurred when power lines were forced to transmit excessive levels of electricity. Upgrades are necessary and all Albertans will benefit from investing into a secure, effective, and safe power grid.

I can understand why some landowners do not want power lines constructed near or through their property. Joe Anglin and the Lavesta Area Group have been extremely effective at agitating their way into the media spotlight, but how long can Albertans reasonably allow localized pockets of NIMBYism stand in the way of essential investments in our electric transmission infrastructure?

In the immortal words of Mr. Spock, perhaps this is a case where "the needs of the many outweigh the needs of the few or the one."

22 comments:

BR said...

Well said, Dave.

Duncan said...

The grid we have is fine. What needs to change is the coal-fired thermal plant model and the resultant power lines.

Decentralized energy generation is an option not even being pondered by AESO as they recommend $14.5 billion upgrades to the transmission system.

Rob Harvie said...

Well done Dave. Well done.

Berry Farmer said...

Dave,

I'm not opposed to a renewed power grid. What I want to know is why we are not moving to a more Canadian east-west grid that can take advantage of rolling demand and link to hydro-electric sources in BC and Manitoba.

If this is not about selling electricity to the USA, that would make more sense, yet we are being told by the government this is not about electricity sales to America.

I also have issues about why we are not burying these lines when they pass over populated areas and about the sort of corridors we are going to build; these will be with us for the next 100 years. They need to be done well and well positioned... and we should all have a voice in that.

There is also a wariness of the advertising now put out by the government saying these new links will allow us to tap into more sustainable/green power generation methods. I'm wary because I think this includes nuclear power generation.

I have organised a Bill 50 Information Session in the Village of New Sarepta for November 4th. Joe Anglin will make his presentation there. The MLAs from two ridings have also been invited but have not replied.

This is the nearest Joe Anglin will come to the City of Edmonton so I urge anyone interested to come out and hear what Mr. Anglin has to say, regardless of their position on Bill 50.

C'mon, Dave, it's nearby and I will even go into Leduc and get doughnuts (what's your fave). This will be your opportunity to see exactly what Mr. Anglin is presenting and let you address your concerns directly.

Everyone is welcome. If you are really concerned that the opposition to Bill 50 is misplaced, get out of the city and make the effort to hear concerns from the source.

Will the berry farmer (and now doughnut eater).

Anonymous said...

I tend to agree more with the Big Block of Cheese blogger, whom you refer to above, who points out that combined with Bill 19, the govt is giving itself an awesome arsenal of power to override public input on decisions involving billions of dollars of taxpayers money. In any other province than Alberta, this would be less scary because the govt is held accountable in the next election. In Alberta, however, no matter what they do, the PCs are back in again no matter what they do. Even the Wildrose is just another version of the Tories, but in a different dress. This is the real reason for the opposition to Bill 50 and it shouldn't be dismissed so easily. This isn't about small issues of NIMBYism, it's about the larger issue of public accountability!

w0x0f said...

A thoughtful and well written article. The ultimate need for the right power to the right place at the right time is known -- the challenge is how.

Does the AESO long-term transmission plan spend any time thinking about smart grids, distributed generation etc.? The words are there but it isn't clear there is serious consideration being given to the opportunities and options. Interesting that our US colleagues announced the most recent $3.4B yesterday for smart grid development.

altapo said...

I have a couple of blog posts of my own on this topic here and here. But basically: what people in Calgary need is electricity. We have two options to get it: AESO's option is to generate the electricity around Wabamun using coal for fuel and transport it over lossy transmission lines. The other option is to have Enmax generate it close to Calgary using natural gas fuel and avoid the long-distance transmission losses. The second option is far more environmentally friendly and will cost consumers less because they won't have to fund the new transmission lines. If upgrades to the existing transmission lines are needed in addition to the second option due to age, Altalink could also use the existing pylons and replace the conductors on them. So the reason people are opposing Bill 50, is because there are clearly other options that AESO and the government are not considering, and a needs hearing is most definitely needed to get those options on the table - because they will result in lower costs for consumers and lower overall CO2 emissions.

Joe Anglin said...

The debate continually gets steered into a debate on transmission lines and the proposed location of a new line(s). This is the wrong debate. AESO’s own economic expert testified on behalf of AESO, and admitted deregulation is not working!

No one is asking the broader questions, “If AESO own economist admits deregulation is not functioning, what happened -- and what are we doing about it? How and why did Alberta’s electricity system degrade from one of the best systems in all of North America, to one of the worst? Why are Albertans paying among some of the highest rates for electricity, when the market is over-saturated with generation?

In my presentation I present all the evidence to support raising these questions and many more! If Bill 50 is passed there will be no venue for the public to raise any questions regarding the need for these lines.

Check your electricity bill! A normal $100 a month residential electricity bill includes a charge for transmission of approximately $10 a month. A commercial business (small) paying approximately $70 a month for electricity is charged $25 a month for transmission. If the investment in transmission (AESO proposes $16.5 billion, not $14.5 billion) rises 8-fold or 10-fold, how can the transmission charges not rise by the same percentage? My example uses actual electricity bills. Logically speaking, and assuming we are not being over-charged at the moment, the residential bill will double with an 8-fold increase and the small business (commercial rate) will experience a tripling of their total bill. This is not a NIMBY issue; I have always refused to participate in the NIMBY debate. This issue is critical to our economic health and prosperity.

Bill 50 has absolutely no merit, it is not needed. The Alberta Utilities Commission already has the legislative authority to approve any and all transmission lines, with a stroke of a pen, if the matter is deemed urgent and for sufficient reason. Why are we then introducing Bill 50?

Joe Anglin

Larry said...

Some solutions for the ancient infrastructure then please Mr. Anglin.
Berry Farmer: Most of Alberta's infrastructure is North-South. Example: Pincher Creek is South of Calgary, so power lines must head North.
BC wants to sell hydro to the US; are we ready to out-bid the US?
Daveberta: are you concerned about a jump from NIMBY to BANANA (Build Absolutely Nothing Anywhere Near Anyone)?

Larry said...

Dave, forgot to mention this is one of your strongest posts.
People are used to flipping a switch and expecting the lights to go on. Sometimes the reality of what's behind that, be it transmission lines or coal power plans, are a nasty shock.

Connie said...

Dave, until today I have given you the benefit of the doubt that you have done your background research before you go public on your blog site. But today I know that you have not done your homework in relation to Lavesta Group.

As secretary of that organization, I can assure you that NIMBY is not, nor has it ever been our guiding principle. We have gone on record whenever possible to assert that the grid does need to be updated. But it needs to be updated properly, and for the right reasons to the benefit of all Albertans.

What we are saying is that power consumers in Alberta are at risk of paying for huge transmission upgrades that do not address the needs of Albertans. If you look into the background, you will see that what Lavesta Group is concerned about is whole-scale export of our resources, at our cost...both in paying for the lines and in increased cost of electricity as we become part of a bigger market.

How many business owners in Alberta will stay and do business here when their rates double, or even triple?

Wouldn't you think that when we are faced with spending in excess of $16.5 billion (not your figure...but AESO's), we could logically be expected to look at all possible solutions in an open discussion? Bill 50 circumvents discussion.

How do you feel about your backyard becoming an energy-export wasteland? I encourage you to attend one of Joe Anglin's presentations.

Obviously, there are things you have commented on in absence of information.

Connie Jensen,
Secretary,
Lavesta Area Group

Joe Anglin said...

To address Larry’s question, multiple solutions have been proposed, and I have supported more than a few. I even went so far as to propose a solution in my own back yard (MOBY). So as Connie points out, the label NIMBY is unfounded. Also, the only reason HVDC is being proposed is because of my efforts. HVDC was originally rejected outright when I first got involved and it took three years to get AESO to approve the use of the technology. I take full credit for advancing the HVDC argument in regards to this issue. You might say we are halfway to a solution.

In a discussion with the CEO of AESO, Dale McMaster, I proposed to combine the concerns of the Industrial Power Consumer’s Association of Alberta (IPCAA) and the Alberta Direct Connect (ADC) with AltaLink’s proposal to build transmission lines west of Rimbey. I showed Dale how industry’s “wants” could be combined with the public’s “need” to satisfy both interests. He didn’t accept the proposal outright, but he liked the idea. He certainly appreciated the dialog. I also told him I could sell the idea to the most ardently opposed landowner along the route and guarantee a fast track in the hearing process. The short version of the solution I proposed subjected landowners to less intrusion and provided the generator industry with an increase in export capacity. The issue of cost was the stumbling block. I advocated that the public should only pay for the portion that benefitted the public, and industry should pay equal to the extent that they benefitted. My cost allocation proposal was consistent with section 15(1) of the Transmission Regulations.

The IPCAA/ADC is a coalition of large industries such as paper mills and refineries. They pay purchase 60% of the retail electricity in Alberta and have the most to lose because they pay for over 60% of the transmission charges.

Since my conversation with Dale McMaster, Dale has been fired! Section 15(1) of the Transmission Regulations has been repealed. Section 14(3) of the Hydro Electric Energy Act (HEEA) has been repealed retro actively to June 1st 2003 eliminating any requirement that these transmission lines must be approved on the basis of the public’s present and future convenience and need. Cabinet has since approved an “Order in Council” giving the board jurisdiction over an export line, even though the government still denies that this is for export. Alberta Energy has also removed from policy the provision that declared that the public would not subsidize export.

Reading between the lines of the propaganda, Alberta’s electricity grid suffers from a reliability dilemma. No one in the industry refutes this assessment. Those of us, who track this stuff regularly, know the reliability issue is more of a problem after midnight and not before. After midnight the 1201 circuit (500KV line) is reversed from Langdon to Cranbrook and is made available to the generators in the Wabamun for export. After midnight and sometime near 3:00 a.m. the Wabamun generators peak in their ability to sell to the SW U.S. market. The Wabamun generators have no problem out bidding U.S. generators. We subsidize them on a number of fronts, in particular we give coal generators a pass environmentally.

If you want to actually learn more about this issue come out to New Sarepta as Will has suggested and I will show you exactly where the reliability issue is located in the province. I even have more solutions

kwilson said...

Dave, I think you are missing an important point.

The Oct 8th issue of The Economist had an article “Smart Grids: Wiser Wires” and it caused me to realize how much of mistake Bill 50is for the future of our province.

Shifting the complex and technical decision-making away from the public hearing setting of the Alberta Utilities Commission (AUC) and into the backroom of the provincial Cabinet will likely lead to misinformed and unwise decision making. I doubt it will stimulate innovation. We need to keep in mind that whether there is a “need” for a powerline is a highly technical question and the utility company that gets to build the line and charge for its use may be more influenced by its own bottom line than actual needs of the grid. That is why the public hearing process before the Commission along with the expert evidence that is presented by all sides is so important to good decision making.

I found the article from The Economist refreshing and insightful. Here is an excerpt:

"But whereas cars, computers and so forth have become ever more sophisticated, power grids have remained, in essence, sets of dumb wires. Thomas Edison, a pioneer of electrification in the 1880s, would be able to run them. Power is fed into the grid from power stations in the hope that it will arrive in factories, offices and homes. To this day most utilities rely on consumers to tell them that the power is out—and may then have to put in a lot of detective work to discover the cause.
This may be changing at last. A global movement is afoot to make grids “smart”. This means adding all kinds of information technology, such as sensors, digital meters and a communications network akin to the internet, to the dumb wires. Among other things, a smart grid would be able to avoid outages, save energy and help other green undertakings, such as electric cars and distributed generation.

. . .

Some countries are further ahead than others in developing smart grids. Italy (surprisingly, perhaps) is a pioneer, at least in smart metering. In the early 2000s Enel, the country’s biggest utility, started installing smart meters in most households so that it could clamp down on theft and cut off non-payers remotely. Sweden has recently become the first country in which every customer has a smart meter, because the government made it mandatory. In America, Texas has led the way.
Behind the latest push, though, are several forces common across countries. Grids are ageing, giving utilities an incentive to invest in modern replacements. The technology has become cheap enough to be worthwhile. Rising energy prices mean consumers want more control over their bills. Governments, worried about both recession and the warming of the planet, have become more active. America’s Department of Energy will soon start to dole out the $3.9 billion earmarked for smart grids in the country’s stimulus package. In Germany, smart meters will be compulsory in new buildings from next year. Britain plans to complete a rollout of such devices by 2020. China has a five-year plan to make the core of its grid cleverer."

If consumers and businesses are going to be forced to pay for something, then our government would be wise to use the billions of dollars—of our money—on smartening up our system, reducing our reliance on old technology—long transmission lines. Instead of stupefying the decision-making process by moving it behind closed doors, the government should be embracing the benefits that come from a transparent and public hearing process such as that currently place with the AUC.

Kevin K said...

Here is an excerpt from one of Joe Anglin's above comments:

"I also told him I could sell the idea to the most ardently opposed landowner along the route and guarantee a fast track in the hearing process. The short version of the solution I proposed subjected landowners to less intrusion and provided the generator industry with an increase in export capacity."

I'm sorry, but that is *exactly* what a NIMBY concern sounds like.

Another point: "Why are Albertans paying among some of the highest rates for electricity, when the market is over-saturated with generation?"

The answer here is obvious: a lack of transmission infrastructure. Alberta has a generating capacity of 12 759 MW, but our peak demand last year was only 9806 MW. Until the excess supply of electricity can enter the market through an improved grid, prices will remain higher.

Furthermore, if Mr. Anglin is ready to acknowledge that we have a saturated generation market, why is he not ready to acknowledge that, given proper regulation by the AUC, Albertans can benefit from the export of this excess? Personally, I wouldn't have a problem, either as a taxpayer or ratepayer, helping to fund infrastructure that would bring money into our province. If I did have a problem with it, I would have to feel like quite the sucker. We have funded highways and border crossings that have allowed our ranchers to export their excess beef to other provinces and countries for several decades...

This excess generation is one reason we do not need more power plants. Thus, this following argument from altapo isn't entirely accurate:

"We have two options to get it: AESO's option is to generate the electricity around Wabamun using coal for fuel and transport it over lossy transmission lines. The other option is to have Enmax generate it close to Calgary using natural gas fuel and avoid the long-distance transmission losses. The second option is far more environmentally friendly..."

The idea is not to add more dirty coal plants around Wabamum, then stick Albertans with the bill for new cross-province transmission lines. The idea is to plug the plants that we already have (without adding new plants and creating new emissions) into the grid.

In any case, I might do another post re: Bill 50 and electricity politics sometime soon. Hopefully, you'll all read and engage in the debate. Even though we have diverging opinions, I'm glad that people are at least talking about this!

P.S. I'm going to try and keep any upcoming post considerably shorter than me last one!

Anonymous said...

Dave,
one of your best posts to date.

Well done.

As for Mr. Anglin, he has lost much credibility with his desire to use his arguments as an attempt to get elected, therefore he is no longer a reliable voice in this debate.

Joe Anglin said...

The issue before us should be the question identifying Alberta’s vision for energy, and energy development. What’s the vision and what is the plan to make that vision a reality? Do we throw 16.5 billion dollars into constructing new transmission lines and then develop a vision and plan?
The 2003/2004 document this government is relying upon to prove the need for new transmission lines refused to recognize import capabilities, all wind power (new and proposed), any other renewable, and the generating capacity of the Balzac gas generating plant. Only by eliminating these sources of electricity could the AESO prove the need for new transmission lines. Conservation measures are not given any consideration, in the transmission line approval process.

To complicate matters even more, the very same 2003/2004 document’s approval was overturned by the EUB on September 30, 2007. The Alberta Court of Appeal ruled one month later that the entire approval process was biased. What the evidence revealed in the court was that AESO was not acting independent. AESO’s senior executive officers received a financial bonus based on approving a transmission line for AltaLink. This evidence contradicted any delusion that AESO actually considered any other transmission alternative. The evidence also proved that the consultation process was a farce. AESO executives admitted to the board and to the court that the decision to approve the 2003/2004 document was made before any consultation began.

Question about distributive generation, an internet grid, and including renewable energy into the consideration process should be addressed before we spend all this money.

Also, saying we need to upgrade because the grid has not been upgraded in over twenty years is a ridiculous comment. Towers, cables and insulators have a life span beyond 70-80 years. With routine maintenance, (by splicing out hot-spots), the life span can be increased almost indefinitely. With all the rhetoric about the so-called aging transmission infrastructure, you might want to note that Bill 50 does not call for the replacement of one transmission line.

Anonymous said...

I really like the level of detail Joe, I wish more of our politicians would discuss things like this.

What's happening with your own political aspirations, now that the Green Party of Alberta was deregistered? Are you still seeking to become an MLA through some form?

Anonymous said...

I think few would argue with the fact that Alberta's transmission lines are old and need upgrading. The question is whether the proposed upgrades in Bill 50 are the best way of addressing our future needs.

Bill 50 reemphasizes our archaic, unsustainable centralized power generation system at the expense of a renewable decentralized power system.

Of course we need increased transmission capacity. But is a massively expensive bet on increasing the capacity of centralized coal powered electricity generation the best way of achieving this end?

At least part of the $14.5 BILLION could be used as a incentive program for home owners and businesses to move towards microgeneration and self sufficiency, which would lessen both the need for increased long distance transmission and Alberta's ridiculous dependency on coal-based electricity generation.

Bill 50 correctly identfies a real problem for all Albertans. It simply lacks vision in its proposed solution.

Marilyn said...

I am constantly amazed at the casual use of the figure $14.5 billion dollars of Albertans' money (some of which is mine.) I've read the AESO document that came around in the summer and I'm counting at least $16.5 billion. I believe Hansard will confirm that in the legislature our premier will admit to something in the range of $8 billion. Of course, there is no requirement of an oath of honesty in the legislature. In Bill 50 I cannot find any limit on spending Albertans' money for transmission projects. None whatsoever. Shouldn't a good law include some parameters of power that I, as a citizen, can look to when my dollars are on the line? I wonder whether even the AESO figure of $16.5 billion won't be terribly low when all is said and done. And I wonder where, in all of this, is the advantage to most Albertans, when our dollars are landing in corporate pockets while our province begins to look like a big spiders' web of transmission lines. When industry executive bonuses are directly linked to capital projects, and when there is no limit in legislation, let's not fool ourselves. Do I hear $20 billion? $25? Who'll go $30?

I am finding most of this conversation extremely thought- provoking. But I must wonder at the motives and integrity of certain anonymous contributers who try to reduce it to the level of Joe Anglin's motives regarding election. Right now it seems to me that Joe Anglin is doing his level best to bring verifiable evidence to the discussion. We aren't going to learn this stuff from our elected representatives, or we would have by now.

Try to get out and hear Joe in the next week. I heard him last night here in Rockyford. Every slide he shows includes the source of his information: hearings transcripts, Hansard, newspaper clipppings, AESO documents, emails. There is no deception here.

Very impressive, Joe. And if you were going for public office, you'd certainly have my vote. I wouldn't agree with you on everything, but I admire your courage and your willingness to look beyond the BS and present the truth. That's rare in politics these days.

matt said...

Choosing between a local gas-fired plant and reconductoring, or 500 kV lines, or HVDC, are technical need decisions ill-suited to cabinet and deserving of public debate in a utility commission forum. By making a different choice Alberta is offside most jurisdictions' practice.

matt said...

Also, some of what Joe has to say is not true as it relates to the ABCA and the AESO.

Anonymous said...

I find it odd that so much attention is being paid to Bill 50 while the gov. proceeds with its plan to remove the hedges on the regulated electricity rate. Forest for the trees, people.