Alberta Electric System Operator Needs Identification Document

Transcription

1 Decision Needs Identification Document Fidler 312S Substation and 240-kV Transmission Line Interconnection, Pincher Creek Area Determination of Preliminary Issues December 1, 2011

2 The Alberta Utilities Commission Decision : Needs Identification Document Application No Fidler 312S Substation and 240-kV Transmission Line Interconnection, Pincher Creek Area Determination of Preliminary Issues Application No Proceeding ID No. 690 December 1, 2011 Published by The Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 Contents 1 Introduction Background The process for new transmission development in Alberta Southern Alberta Transmission Reinforcement needs identification document approvals Legislative framework Introduction of parties Preliminary issues Should the AESO be directed to amend the applicable part of the SATR NID to indicate the configuration of the Goose Lake to Fidler line, in combination with the Fidler substation and the Fidler to Chapel Rock line, as the alternative now proposed to alleviate the constraints in the existing system and needs for improved efficiency of the transmission system in the Pincher Creek area, as described in the SATR NID? Views of the AESO Views of AltaLink Views of the Livingstone Landowners group Views of the Alberta Wilderness Association Views of other parties Commission findings Should facility applications for permits to construct the Goose Lake to Fidler line, the Fidler substation and the Fidler to Chapel Rock line be combined for consideration by the Commission? Views of the AESO Views of AltaLink Views of the Livingstone Landowners group Views of other parties Commission findings Decision Appendix 1 Proceeding participants...23 Appendix 2 Oral hearing registered appearances...25 Appendix 3 Abbreviations...26 Table of Figures Figure 1: Fidler NID Pincher Creek Area Generation Connection Development Concept... 2 Figure 2: SATR NID Figure Pincher Creek Area Development Concept... 4 Figure 3: SATR NID Conceptual Map Showing Development Plan Alternative 1A... 5 AUC Decision (December 1, 2011) i

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5 The Alberta Utilities Commission Calgary, Alberta Needs Identification Document Fidler 312S Substation and 240-kV Transmission Line Decision Interconnection, Pincher Creek Area Application Nos and Determination of Preliminary Issues Proceeding ID No Introduction 1. The (AESO) filed an application pursuant to Section 34 of the Electric Utilities Act with the Alberta Utilities Commission (AUC or the Commission) seeking approval of the needs identification document (NID) for the construction of a 240/138-kilovolt (kv) substation designated as Fidler 312S near Pincher Creek, and for the reconfiguration of existing 138-kV transmission line 893AL and rebuilding it with larger conductors. This application was registered on June 16, 2010, as Application No (the Fidler NID application). 2. (AltaLink) filed an application with the AUC seeking approval, pursuant to sections 14 and 15 of the Hydro and Electric Energy Act, to construct and operate the following transmission facilities: A substation designated as Fidler 312S. A new double-circuit 240-kV transmission line designated as 994L/1071L from the proposed Fidler 312S substation to existing Goose Lake 103S substation. A new 138-kV transmission line designated as 893L from the proposed Fidler 312S substation to existing structure 893AL32; and a new 138-kV transmission line 624L from proposed Fidler 312S substation to existing Summerview 354S substation. 3. AltaLink also applied to salvage existing 138-kV transmission line 893AL from structure 893AL32 to existing Summerview 354S substation. The application was registered on October 10, 2010, as Application No (the facility application). 4. The AESO s Fidler NID application indicated that Fidler 312S substation would be developed in two phases, both depicted in Figure 1 below. In the first phase, the new Fidler 312S substation would be connected to Goose Lake 103S substation with a 240-kV double-circuit transmission line (the Goose Lake to Fidler line). AltaLink s facility application relates only to the Goose Lake to Fidler line, the first stage of development. Phase two of the development would include the additional work that would be required to commission a 240-kV double-circuit transmission line from the proposed Fidler 312S substation to the planned Chapel Rock 491S substation (the Fidler to Chapel Rock line). The AESO did not apply for approval of the need for the Goose Lake to Fidler line in its Fidler NID application because it maintained that the need for AUC Decision (December 1, 2011) 1

6 this line was previously approved by the Commission in the South Alberta Transmission Reinforcement (SATR) NID decision. 1 Figure 1: Fidler NID Pincher Creek Area Generation Connection Development Concept 2 5. The Commission issued notice of the AESO s Fidler NID application and AltaLink s facility application on February 4, AltaLink filed an amendment to its facility application on August 17, 2011, such that the proposed 240-kV double-circuit transmission line 994L/1071L would connect from the proposed Fidler 312S substation to a point along the 240-kV double-circuit transmission line 1071L/1072L 3 (the Fidler interconnection) rather than connecting directly to Goose Lake 103S substation, and to remove the alterations originally proposed at Goose Lake 103S substation from the facility application Decision :, Needs Identification Document Application Southern Alberta Transmission System Reinforcement, Application No , Proceeding ID No. 171, September 8, Fidler NID application, page 6. Transmission Line Permit and Licence No. U and Transmission Line Permit and Licence No. U , Application No , Proceeding ID No. 778, November 1, AUC Decision (December 1, 2011)

7 7. The Commission has not yet deemed either AltaLink s facility application or the AESO s NID application complete because the Commission identified two preliminary issues that must be addressed before it can further process these applications. These preliminary issues are: Should the AESO be directed to amend the applicable part of the Southern Alberta Transmission Reinforcement NID to indicate the configuration of the Goose Lake to Fidler line, in combination with the Fidler substation and the Fidler to Chapel Rock line, as the alternative now proposed to alleviate the constraints in the existing system and needs for improved efficiency of the transmission system in the Pincher Creek area, as described in the SATR NID? Should facility applications for permits to construct the Goose Lake to Fidler line, the Fidler substation and the Fidler to Chapel Rock line be combined for consideration by the Commission? 8. The Commission issued a notice of hearing for the determination of the preliminary issues on May 11, 2011, which was distributed by mail or directly to interested parties, published in three local newspapers in the Pincher Creek region, and posted on the AUC website. 9. The hearing commenced on August 23, 2011, at the Heritage Inn in Pincher Creek, Alberta before a Commission panel comprised of Panel Chair Anne Michaud, and Commission members Tudor Beattie, QC and Neil Jamieson. Written argument concluded on September 28, 2011, which the Commission considers to be the close of record for the hearing. 10. The Commission has reviewed the evidence, argument and reply. Any references to specific parts of the record are intended to assist the reader in understanding the Commission s decision, but should not be taken as an indication that the Commission did not consider the entire record as it relates to that issue. 2 Background 2.1 The process for new transmission development in Alberta 11. Two approvals from the AUC are required to build new transmission in Alberta, other than critical transmission infrastructure, an approval of the need for expansion or enhancement to the system pursuant to Section 34 of the Electric Utilities Act, and a permit to construct and a licence to operate a transmission facility pursuant to sections 14 and 15 of the Hydro and Electric Energy Act. 12. The AESO, in its capacity as the independent system operator (ISO) established under the Electric Utilities Act, is responsible for preparing a NID and filing it with the AUC for approval pursuant to Section 34 of the Electric Utilities Act. 13. Facility applications are prepared by a transmission facility owner assigned by the AESO. The transmission facility owner, in this case AltaLink, prepares facility applications based on the direction and functional specifications provided by the AESO in order to meet the need identified. AUC Decision (December 1, 2011) 3

8 14. AltaLink s facility application proposed the Fidler 312S substation and the alterations to transmission line 893AL to meet the need identified in the AESO s Fidler NID application. AltaLink s proposed Fidler interconnection, however, relied on a portion of the need previously approved in the SATR NID decision. 2.2 Southern Alberta Transmission Reinforcement needs identification document approvals 15. The AESO s SATR NID application, filed with the AUC on December 30, 2008, had described potential locations of the transmission facilities by swaths which the AESO defined as possible areas for 240-kV development. Appendix H of the SATR NID application summarized the participant involvement program conducted in connection with that application. Appendix H and associated maps also depicted the location of the proposed transmission facilities by swaths. 16. In Section 8 of the AESO s SATR NID application, it is also specifically stated that the facilities identified by shaded areas in Figure 8.1-2, as Pincher Creek area system development concepts were provided for information purposes only and were not included in the recommended plan for which approval was sought in the SATR NID application. Figure is reproduced below as Figure 2. Figure 2: SATR NID Figure Pincher Creek Area Development Concept 4 4 SATR NID application, page AUC Decision (December 1, 2011)

9 17. The Commission approved the SATR NID in Decision on September 8, 2009, and issued NID Approval No. U on September 17, Decision not only approved the SATR NID, but also Alternative 1A, the preferred option for system development as filed by the AESO. Decision included a map outlining Alternative 1A, including the swaths. This map is shown below in Figure 3. 6 Figure 3: SATR NID Conceptual Map Showing Development Plan Alternative 1A The Commission s decision on the SATR NID approved the system development for a new 240-kV double-circuit transmission line connecting Crowsnest substation to Goose Lake 103S substation and a new 500-kV Crowsnest substation to be located near Crowsnest Pass. 5 Needs Identification Document Approval No. U , Application No , Proceeding ID No. 171, September 17, On December 7, 2009, the AESO filed its finalized milestones and monitoring process with the AUC, pursuant to the Commission s direction in Decision and NID Approval No. U The Commission approved the finalized milestones and monitoring process in Decision and issued SATR NID Approval No. U on July 19, On March 15, 2011, the Commission approved amendments to the SATR NID in Decision and the AESO was granted NID Approval No. U on June 7, Decision , page 43. AUC Decision (December 1, 2011) 5

10 19. Further, the Commission s decision on the SATR NID stated: the Commission strongly encourages AESO to direct the TFO to make all reasonable efforts to ensure that any proposed facility application is confined to the swath boundaries for Alternative 1A. 20. The AESO filed an application to amend 8 the SATR NID on August 10, The amendments sought were to rename the substation previously referred to as Crowsnest substation to Crowsnest/Chapel Rock, and to remove the statement in the SATR NID approval that the substation would be located near Crowsnest Pass (the SATR NID amendment application). The Commission has not yet made a decision in regard to this application. 2.3 Legislative framework 21. As mentioned above, new transmission projects in Alberta are required to undergo a two-stage approval process. The first stage for each new transmission facility requires the AESO to file an application with the Commission to have the need for the facility approved. These applications, known as NID applications, are made under Section 34 of the Electric Utilities Act. 22. Section 34 of the Electric Utilities Act provides: 34(1) When the Independent System Operator determines that an expansion or enhancement of the capability of the transmission system is or may be required to meet the needs of Alberta and is in the public interest, the Independent System Operator must prepare and submit to the Commission for approval a needs identification document that (a) describes the constraint or condition affecting the operation or performance of the transmission system and indicates the means by which or the manner in which the constraint or condition could be alleviated, (b) describes a need for improved efficiency of the transmission system, including means to reduce losses on the interconnected electric sustem,or (c) describes a need to respond to requests for system access service. (2) On its own initiative or in response to views expressed by the Commission, the Independent System Operator may amend a needs identification document submitted to the Commission for approval. (3) The Commission may, subject to the regulations, (a) approve the needs identification document, (b) refer the needs identification document back to the Independent System Operator with directions or suggestions for changes or additions, or (c) refuse to approve the needs identification document. 23. Section 34 makes it clear that NID applications must include a description of the AESO s preferred technical solution to provide the expansion or enhancement required as described in the NID. Section 11 of the Transmission Regulation further describes the information that the AESO must include in a NID application. Section 11 states that the AESO must provide a technical and 8 Application No AUC Decision (December 1, 2011)

11 economic comparison of the technical solutions that the AESO considered to address the need identified and requires the AESO to also indicate which technical solution it prefers. 24. NID applications filed by the AESO have generally been organized into two parts. The first part describes the need for the proposed transmission upgrade. The discussion is based on load forecasts, generation forecasts and system studies. The second part of a NID application describes the AESO s preferred technical solution to address the identified need. This includes a comparative analysis of the various options, based on three general criteria: technical attributes, economic attributes and land use or environmental attributes. 25. The first NID application considered by the AUC s predecessor, the Alberta Energy and Utilities Board (the board), was for 240-kV transmission upgrades between Pincher Creek and Lethbridge. The board described the needs assessment process as follows: It is the Board s view that section 34 contemplates a two-stage consideration of a NID. In the first stage, the Board must determine whether an expansion or enhancement of the capability of the transmission system is necessary to alleviate constraint, improve efficiency, or respond to a request for system access. If it is determined that expansion or enhancement of the system is required to address constraint, inefficiency, system access requests, or any combination thereof, the Board must then assess, in the second stage, whether enhancement or expansion measures proposed by AESO are reasonable and in the public interest The AUC and its predecessor have consistently followed this approach when deciding upon NID applications Lastly, AUC Rule 007: Rules Respecting Applications for Power Plants, Substations, Transmission Lines, and Industrial System Designations (AUC Rule 007) applies to transmission line and substation facility NID applications under Section 34 of the Electric Utilities Act. The requirements of Section 6 of AUC Rule 007 include NID 12, which states: NID12) In those cases where ISO is identifying, as part of its application, a particular area in which the TFO should attempt to ultimately locate the proposed transmission facilities (e.g., a preferred corridor), ISO is expected to examine alternatives, and elaborate on the rationale for recommending the preferred option, having regard for the following major aspects, where applicable: 1) Agricultural impact 2) Residential impact 3) Environmental impact 4) Cost 5) Electrical considerations 6) Visual impact 7) Special constraints [Subsections omitted to remove detail unnecessary to this discussion] 9 10 Alberta Energy and Utilities Board Decision : Needs Identification Document Southwest Alberta 240-kV Transmission System Development Pincher Creek Lethbridge Area, Addendum to Decision , Application No , October 14, 2004, page 12. See for example Decision , at page 16 or AUC Decision , page 1. AUC Decision (December 1, 2011) 7

12 2.4 Introduction of parties 28. A complete list of all hearing participants is attached to this decision in Appendix 2. However, to assist readers of this report, the Commission has included the following brief introduction to the landowners and residents who participated in the public hearing. 29. The Livingstone Landowners group is made up of approximately 100 residents in the Porcupine Hills, Livingstone Range area who would be potentially impacted by routes for the Fidler to Chapel Rock line. The Livingstone Landowners group retained Grid Power Development and Design Inc. to prepare and present expert evidence in the proceeding. 30. The Alberta Wilderness Association (Alberta Wilderness) is an organization dedicated to environmental and wilderness protection throughout the province of Alberta since its foundation in the Pincher Creek area in Mr. Peter Sherrington, a past president, represented Alberta Wildnerness at the hearing. 31. A number of wind generators with projects in the Pincher Creek area participated in the proceeding. They included TransAlta Corporation (TransAlta), owners of the Summerview wind farm, Heritage Wind Farm Development Inc. (Heritage), owners of the proposed Heritage wind farm, ENEL Alberta Wind Inc. (ENEL), owners of the Castle Rock Ridge wind farm, and Alberta Wind Energy Corporation (Alberta Wind Energy), owners of the proposed Oldman 2 wind farm and the proposed Windy Point wind park. 32. Mr. Doug Smith is a member of the Livingstone Landowners group and a landowner whose residence is located near the proposed Fidler to Chapel Rock line; his wife, Ms. Roberta Lambright, testified on their behalf. 33. The Municipal District (MD) of Pincher Creek, who is responsible for the zoning and development permits related to wind farm development in the area also filed a submission. 3 Preliminary issues 3.1 Should the AESO be directed to amend the applicable part of the SATR NID to indicate the configuration of the Goose Lake to Fidler line, in combination with the Fidler substation and the Fidler to Chapel Rock line, as the alternative now proposed to alleviate the constraints in the existing system and needs for improved efficiency of the transmission system in the Pincher Creek area, as described in the SATR NID? 34. The AESO, TransAlta, Heritage, ENEL, Alberta Wind Energy, and the MD of Pincher Creek argued that an amendment to the SATR NID to indicate the configuration of the Goose Lake to Fidler line, in combination with the Fidler substation and the Fidler to Chapel Rock line, is not required as the routes and locations of these facilities does not change the assessment of the need for transmission system reinforcement in the area. 35. The Livingstone Landowners group, Alberta Wilderness, and Mr. Smith took the position that the AESO should be directed to amend the SATR NID accordingly. 36. AltaLink stated that it took no position on this first preliminary issue. 8 AUC Decision (December 1, 2011)

13 3.1.1 Views of the AESO 37. The AESO submitted that interested parties will be given the opportunity to have their views and concerns addressed in the context of the AESO s current SATR NID amendment application filed August 10, 2011, the Fidler NID application, AltaLink s Fidler facility application and AltaLink s future Fidler to Chapel Rock facility application. 38. The AESO stated that the functionality of the proposed 240-kV line from Goose Lake to Crowsnest, as set out in the SATR NID approval, does not change following the connection of the Fidler substation. The AESO argued that the need described in the SATR NID includes the reinforcement of the transmission system to facilitate reliable connection of future wind generation to the Alberta Interconnected Electric System (AIES), and the transmission of power from wind generators to load centres and that this remains the same. 39. The AESO submitted that the purpose of the land impact assessment in the SATR NID application was not to provide a comparative assessment of specific locations related to substation sites or transmission line routes as these are not determined at the NID application stage, but are determined at the facility application stage. The AESO stated that the land impact assessment examined representative routes and arbitrary substation locations in order to conclude that all of the system development alternatives proposed in the SATR NID were viable from a land impact perspective, and none had potential impacts that would cause any to be rejected for that reason. The SATR NID land impact assessment included an assessment of study areas both north and south of the Oldman Reservoir that was captured by the west study area for system development. 40. The AESO stated that the participant involvement program, as described in both the SATR NID application and the Fidler NID application, met the requirements of AUC Rule 007 and gave stakeholders the opportunity to express their concerns. 41. The AESO submitted that information made available in the SATR NID participant involvement program included study area maps that indicated potential development both north and south of the Oldman Reservoir. The AESO stated that the indicated areas were described as being general or potential in nature and the information further explained that specific siting and routing would form part of future facility applications. 42. The AESO submitted that it has filed an application for an amendment to the SATR NID 11 to clarify that the site of the new 500/240-kV substation, previously referred to as the Crowsnest substation, is not restricted to the Crowsnest Pass area. 43. The AESO submitted that a separate amendment to the SATR NID would not resolve the concerns of the landowners where, fundamentally, those concerns surround proposed routing and siting and not the need for transmission facilities Views of AltaLink 44. Although it took no position on this first issue, AltaLink did submit that, should the Commission direct the AESO to re-evaluate and amend the configuration of the transmission line described as Goose Lake to Crowsnest in the SATR NID to reflect the newly proposed Fidler to 11 Application No AUC Decision (December 1, 2011) 9

14 Chapel Rock line project, the Commission could include a direction that the AESO consider whether the development of the 240-kV double-circuit transmission line currently described in AUC NID Approval No. U as the 240-kV Goose Lake to Crowsnest line should commence at the Goose Lake 103S substation, Castle Rock Ridge 205S substation or Fidler 312S substation. The AESO could then bring any proposed amendments resulting from that review to the AUC for approval prior to or in conjunction with, AltaLink s facility application in respect of that development. AltaLink submitted that such a direction would enable all need and routing issues associated with the next phase of the SATR project to be considered at one time Views of the Livingstone Landowners group 45. The Livingstone Landowners group submitted that the need for a 240-kV double-circuit transmission line connecting Goose Lake 103S substation to Fidler 312S substation was not approved by the AUC in Decision ; consequently, the need for the line has not yet been established and AltaLink s facility application for approval to construct and operate the line is premature and without legal foundation. 46. The Livingstone Landowners group argued that the configuration now proposed differs significantly from the configuration proposed in the SATR NID application. The Livingstone Landowners group noted that what is now called the Fidler substation was identified in the SATR NID application as the Heritage substation and that the AESO did not seek approval in the SATR NID application of the need for either the Heritage substation or a 240-kV line connecting it to the Goose Lake to Crowsnest line; it, therefore, follows that the Commission did not approve the need for either the Heritage substation or the interconnection in Decision The Livingstone Landowners group stated that in the SATR NID configuration, Fidler 312S substation (then named Heritage) has two line connections, one to Goose Lake 103S substation and one to Crowsnest substation, whereas in the current Fidler NID configuration, Fidler 312S substation has four connections: two to Chapel Rock 491S substation, one to Highway 785 substation, and one to Castle Rock Ridge 205S substation. 48. It was the evidence of the expert for the Livingstone Landowners group that the transfer capability of the configuration now proposed in the Fidler NID and facility applications, compared to that which was indicated in the SATR NID application, would be decreased by 270 megawatts (MW) under certain conditions. 49. The Livingstone Landowners group submitted that the new configuration s more northerly routing takes the proposed transmission line outside of the high wind energy regions west of Goose Lake, thereby reducing system flexibility to adapt to additional wind development in the future. 50. The Livingstone Landowners group added that AltaLink is now consulting on routes for the Fidler to Chapel Rock line which clearly fall outside of the swath for the Goose Lake to Crowsnest line identified in the SATR NID decision. As depicted in Appendix "C" to Decision , the swath associated with the Goose Lake to Crowsnest line was one and a half townships to the south of AltaLink s Lundbreck 513S substation. The Lundbreck 513S substation itself is southwest of Maycroft, one of the locations now proposed for the Chapel Rock 491S substation. 10 AUC Decision (December 1, 2011)

15 51. The Livingstone Landowners group submitted that the Maycroft substation location, identified as a potential substation location, is approximately 35 kilometres north of Crowsnest Pass and that this cannot be considered to be near Crowsnest Pass as described in the SATR NID approval. 52. The Livingstone Landowners group submitted that notwithstanding the Commission s strong statement in paragraph 188 of Decision , the AESO did not direct AltaLink to stay within the Goose Lake to Crowsnest swath when siting the Goose Lake to Fidler to Chapel Rock line, nor did AltaLink choose to do so of its own volition. 53. Members of the Livingstone Landowners group testified that they did not receive personal notice of the SATR NID application, but that they had seen advertisements in the local newspapers of open houses for the SATR NID application. Based on the maps included in those advertisements, they believed that they would not be affected by any transmission line associated with the SATR NID application. 54. Certain members of the Livingstone Landowners group who attended the SATR NID application open houses testified that based on the information they received at these open houses, they believed they would not be affected by any transmission line or substation associated with the SATR NID application. 55. The Livingstone Landowners group stated that the AESO and AltaLink s failure to adequately consult has cumulatively resulted in a breach of AUC Rule 007 and further resulted in members of the Livingstone Landowners group not being afforded basic procedural fairness. 56. The Livingstone Landowners group argued that Section 34(1) of the Electric Utilities Act requires that a NID describe not only the constraint or condition affecting the operation of the system (i.e., the need), but also the means by which or the manner in which the constraint or condition could be alleviated. It stated that even if one accepts that there is a need for new transmission facilities to connect new wind generation in the area, the means by which or the manner in which the AESO is now proposing to meet the need is not the same as the means approved in the SATR NID approval. 57. The Livingstone Landowners group supported AltaLink s proposal that the Commission issue a direction that the AESO consider whether the development of the Goose Lake to Crowsnest line should commence at the Goose Lake 103S, Castle Rock Ridge 205S or Fidler 312S substation, and to bring any proposed amendments resulting from that review to the Commission for approval prior to, or in conjunction with, AltaLink s facility application in respect of that development. The group stated that this option appears to offer a sensible solution that would allow the concerns of the members of the Livingstone Landowners group around the routing of the transmission line to be properly addressed, while also addressing the need to tie-in currently curtailed wind generation in the vicinity of the Fidler 312S substation Views of the Alberta Wilderness Association 58. Alberta Wilderness submitted that any environmental assessment so far has only applied to the Goose Lake to Crowsnest corridor. AUC Decision (December 1, 2011) 11

16 59. Alberta Wilderness submitted that the expansion of the project beyond the original footprint goes against the findings of the land impact assessment included in the SATR NID which states: the length of the line is the largest driver for most of the impacts. 12 Paralleling existing transmission lines is an effective way to reduce the amount of new linear disturbances and fragmentation Alberta Wilderness submitted that the transmission lines and substations must be confined to the footprint of the approved need document within which existing infrastructure can be upgraded or parallel existing linear disturbances. 61. Alberta Wilderness stated that the proposal to construct any facilities outside of the footprint identified in the SATR NID approval must be regarded as a new project and requires a new application process that must include a full environmental assessment and comparative assessment of any new development area with the corridor approved in the SATR NID decision. 62. Alberta Wilderness added that it is not aware of any public discussion of the need for this new configuration and believes that it should not be approved without such discussion Views of other parties 63. TransAlta testified that the MD of Pincher Creek had made it clear that it does not favour wind development in the area south of the Oldman River and the that wind developers have responded by locating their existing and planned developments north of the river. 64. Mr. Doug Smith submitted that the information shared with the public on southern Alberta transmission requirements and potential construction locations during the SATR NID process varies dramatically from the information now included in the Fidler NID application and the AltaLink facility application. Mr. Smith argued that this significant change negates much of the value of previous consultation because none of the landowners currently affected by the applications were aware of the potential impact to their area. 65. Mr. Smith stated that the area now proposed for transmission line development was not subject to appropriate environmental or land use review because it was largely excluded from the previous SATR NID process Commission findings 66. The fundamental question in this case is whether or not the need for the Fidler interconnection was already approved by the Commission under Section 34 of the Electric Utilities Act. The AESO and its supporters maintain that it was approved in the SATR NID. The Livingstone Landowners group and its supporters contend that it was not. 67. The Commission finds that the need for the Fidler interconnection was not previously approved by the Commission under the SATR NID. There are two aspects to this finding. The first aspect is that in Section 8 of the SATR NID application, the AESO explicitly stated that it SATR NID Application No , Appendix F, page 4. SATR NID Application No , Appendix F, page AUC Decision (December 1, 2011)

17 was not seeking approval of the need for the transmission facilities connecting the Fidler 312S substation to the Goose Lake to Crowsnest line. 68. The second aspect is that the Goose Lake to Chapel Rock line is not the same as the Crowsnest to Goose Lake line. The AESO argued that the Goose Lake to Chapel Rock line should be considered the same as the Crowsnest to Goose Lake line approved in the SATR NID decision, despite the different physical location of the two lines. Because there are material differences in the transmission facilities currently proposed from those approved in the SATR NID decision, both in terms of their geographic location and electric system configuration, the Commission finds that the Goose Lake to Chapel Rock line is not the same as the Goose Lake to Crowsnest line. These differences in the transmission facilities now proposed by the AESO in the Fidler NID application require Commission approval under Section 34 of the Electric Utilities Act. 69. The language of Section 34(1)(a) of the Electric Utilities Act, and the informational requirements of Section 11 of the Transmission Regulation and Section 6 of AUC Rule 007 demonstrate that Section 34 involves more than the approval of a need to expand or enhance the AIES. The required approval extends to and includes approval, at least at a high level, of how this expansion or enhancement will be accomplished. The Commission finds that if the technical solution, for which the AESO sought and obtained approval changes in a material way, the need for the changed technical solution proposed by the AESO requires AUC approval. Subsection 34(2) of the Electric Utilities Act affords a statutory procedure for the AESO to obtain AUC approval of any NID amendments required. The Commission also finds that the identification of facility location at a high or macro level at least sufficiently to meet the requirements of AUC Rule 007 and to afford procedural fairness to landowners potentially affected in NID approval proceedings is an essential component of the means or manner of satisfying need requiring approval under Section 34 of the Electric Utilities Act. 70. Support for this conclusion is found in the comments of Justice O Brien in Sincennes v. AEUB 2009 ABCA 167 albeit these comments were made in the context of the court s consideration of a different statutory regime. 40 The location of the line and its detailed route are not synonymous terms. Nor does the legislation define these terms. However, as acknowledged by the respondent Naturener in its Factum, those terms should be interpreted as distinct concepts. Location is generally understood to refer to the macro location of the line, that is, the corridor applied for by the MATL in its application. On the other hand, detailed route is the micro or specific route the IPL will take As an aside to the above comment, the practicalities of the NEB leaving open the matter of location are subject to question. Since the NEB is required to assess the environmental impacts of a project, presumably it must first identify the corridor Similarly, in a Section 34 NID approval application, the Commission must consider environmental impacts, and the AESO is required under, AUC Rule 007, to provide information regarding environmental impacts. 14 Sincennes v. AEUB 2009 ABCA 167, page 11. The references in this quote to MATL, IPL, and NEB are to Montana Alberta Transmission Line, international power line and National Energy Board respectively. AUC Decision (December 1, 2011) 13

18 72. The concept of identification of facility location at a high or macro level was part of the Commission s considerations in Decision approving the SATR NID. This is evident in the Commission s finding that there is an appropriate role to be played by landowners within a NID hearing and that this role is essentially... to provide high level advice regarding land use impacts and potential environmental concerns associated with any of the proposed options considered by AESO In Decision , in addition to approving the need for system enhancement, the Commission expressly approved one particular means or manner to meet the need, namely the AESO s then preferred option, Alternative 1A. 16 The Commission also indicated as part of its reasoning for such approval that it was having regard to subsection 38(a) through (d) of the Transmission Regulation. The decision references paragraph 38(a) which states that when considering a needs identification document, the Commission must: (a) have regard to the principle that it is in the public interest to foster... (iii) geographic separation for the purposes of ensuring reliability of the transmission system and efficient use of land, including the use of rights of way, corridors or other routes that already contain or provide for utility or energy infrastructure or the use of new rights of way, corridors or other routes, notwithstanding that geographic separation for the purposes of ensuring reliability of the transmission system or efficient use of land may result in additional cost. 74. The significance of the efficient use of land to the SATR NID approval is also indicated by the Commission s finding that Alternative 1A incorporates some rebuilds of existing transmission facilities which the Commission considers to be an efficient use of land while maintaining geographic separation of major components of the upgrade The development concept and mapping information provided by the AESO in its SATR NID application indicated transmission facilities planned for somewhere along Highway 3 from Lethbridge to Crowsnest Pass. Nothing in the NID application suggested transmission line locations under consideration in the SATR NID proceeding going north and west of Goose Lake through the Livingstone/Porcupine Hills area. Subsequent to the SATR NID application, the AESO revised the configuration of the Goose Lake to Crowsnest line and, as a result, some of the proposed locations of the transmission and substation facilities now fall outside the swaths identified in the SATR NID approval. 76. It appears that based on maps included in advertisements for open houses held to discuss the SATR NID application and information provided during these open houses, members of the Livingstone Landowners group believed that they would not be affected by any transmission line associated with the SATR NID application. The Commission accepts that locating the Goose Lake to Chapel Rock line through the Livingstone/Porcupine Hills area was outside the reasonable contemplation of these and other potentially affected landowners. All potentially affected landowners were entitled to proper notice of the AESO s intention to seek approval for the need for the facility in this location. These landowners did not receive such notice and, as a result, were effectively deprived of their right to participate in the making of that decision. 15 Decision , pages 34 to Decision , pages 39 to Decision , page AUC Decision (December 1, 2011)

19 77. Crossing the Livingstone/Porcupine Hills area is significantly different than using the corridor followed by Alternative 1A from the policy perspective that it requires the Commission to consider whether the introduction of a new linear disturbance through that region is in the public interest. Location of a Fidler to Chapel Rock line in the Livingstone/ Porcupine Hill area may ultimately be determined to have merit when and if approval of the need for it is sought. However, the point is that the prospect of such location was not made evident by the AESO to potentially affected landowners in the SATR NID application and the need to do so was not even considered, let alone approved, by the Commission in the SATR NID proceeding. AltaLink indicated that the representative routes studied in the SATR NID proceeding as part of the land impact assessment were limited to the swaths. 18 The Commission finds that, as a result, the land impact assessment did not consider the Livingstone/Porcupine Hills area and the conclusions reached in the SATR NID decision regarding land impacts excluded this area. 78. As a result of the material change in the location of the proposed facilities, the Commission finds that the SATR NID participant involvement program did not give stakeholders an opportunity to express concerns on the project as it is now proposed. The Commission, therefore, disagrees with the AESO s assertion that the SATR NID participant involvement program was adequate for the Fidler interconnection and the Fidler to Chapel Rock line projects. The Commission also considers that the AESO s argument that potentially affected landowners will have an opportunity to address detailed routing during facility applications does not address the fact that they were deprived of their right to participate in the proceeding for the original need approval. 79. There are also material functional differences between the technical solution proposed by the AESO and approved in the SATR NID decision, and the technical solution proposed here. The AESO s maps and line diagrams show that the Fidler interconnection is now proposed to be part of the Goose Lake to Chapel Rock line rather than a separate connection for wind farm generation, as presented in the SATR NID application. This in and of itself is a significant change in terms of a technical solution. Support for this conclusion is shown by the uncontradicted evidence at the hearing that one impact of the changes made was a reduction in the transfer out capacity of the proposed system by 270 MW under export conditions. The Commission accepts the Livingstone Landowners group expert s evidence that there are material changes in the electrical system configuration presented in the AESO s SATR NID application and the configuration presented in the current Fidler NID application. On this basis, the Commission rejects the AESO s argument that the functionality of the facilities proposed here is the same as the functionality of the technical solution approved in the SATR NID decision. The need for these system changes, which are also material, has neither been requested nor approved. 80. Based on the foregoing, the Commission finds that there are material differences between the means, manner or technical solution approved in the SATR NID decision and the means, manner, or technical solution in the Fidler interconnection as now proposed. Consequently, the Commission finds that it did not approve the need for the Fidler interconnection or for the Fidler to Chapel Rock line in the SATR NID decision. 81. Accordingly, Commission approval of the need for the Fidler interconnection under Section 34 of the Electric Utilities Act is lacking and the current Fidler facility application is deficient in this respect. In order to proceed, such approval must be obtained by the AESO. Such 18 Transcript, Volume 1, page 168. AUC Decision (December 1, 2011) 15

20 application by the AESO to amend the SATR NID to obtain approval of the Fidler interconnection and the Fidler to Chapel Rock line (or a NID application to obtain approval of the Fidler interconnection) will have to comply with AUC Rule 007 and the Transmission Regulation requirements, as usual. 82. With respect to AltaLink s proposal that the Commisison should direct the AESO to review whether the transmission line should commence at the Goose Lake 103S, Castle Rock Ridge 205S or Fidler 312S substations, the Commission finds that it is the role of the AESO to propose a technical solution to satisfy a need and to determine the timing and manner in which a NID application is brought forward. Therefore, it is not appropriate at this time for the Commission to make such a direction. 83. The Livingstone Landowners group requested the Commission to direct the AESO regarding the steps that the AESO is required to take to apply to amend the SATR NID approval and to suspend landowner consultations in connection with the Fidler to Chapel Rock project. There has evidently been some incorrect information regarding Commission approval of the need for the Goose Lake to Chapel Rock line provided to the public and affected landowners by the AESO and AltaLink during recent landowner consultations and in filings made with the Commission. The Commission expects that this will be corrected promptly and in an effective manner, but will not provide further directions on the steps to be taken in this regard. 3.2 Should facility applications for permits to construct the Goose Lake to Fidler line, the Fidler substation and the Fidler to Chapel Rock line be combined for consideration by the Commission? 84. The AESO, AltaLink, TransAlta, Heritage, ENEL, Alberta Wind Energy, and the MD of Pincher Creek argued that there was an urgent need to construct Fidler 312S substation and the Fidler interconnection and that the approval of the location of Fidler 312S substation does not predetermine the routing of the Fidler to Chapel Rock line. 85. The Livingstone Landowners group, Alberta Wilderness, and Mr. Smith argued that the approval of the location of Fidler 312S substation would predetermine the routing of the Fidler to Chapel Rock line and that the need for Fidler 312S substation was not as urgent as indicated by the AESO, AltaLink and wind farms in the area Views of the AESO 86. The AESO submitted that the Fidler to Chapel Rock line application and the Fidler interconnection application should not be combined, and that the Fidler NID and Fidler to Goose Lake line application should be heard as soon as possible to enable wind farms in the area and other generation to be connected in a timely manner. 87. The AESO submitted that by the end of 2015, based on current information, more than 600 MW of generation capacity relies on the energization of the proposed Fidler 312S substation. 88. The AESO submitted that the time required by the AESO to study and assess an interim solution, undertake consultation, prepare a NID and transmission facility owner directions, and participate in required regulatory proceedings would result in a significant and unacceptable delay to market participants access to transmission service. The AESO stated that even if the 16 AUC Decision (December 1, 2011)

21 suggested transmission line 893L upgrades were possible, the lead time from need studies to energization is likely to exceed two years, meaning that an upgraded transmission line 893L would be available in 2014, only one year earlier than the Livingstone Landowners group s evidence has stated Fidler 312S substation must be in service. 89. The AESO provided evidence that 443 MW of generation is scheduled to come on line in the area by the end of 2014 and that several of the interim solutions proposed by the Livingstone Landowners group would not be capable of meeting this capacity. 90. The AESO submitted that for any of the proposed interims solutions capable of providing the capacity, the cost of implementation is very high and, therefore, it is impractical as an interim solution to meet the need described in the Fidler NID. 91. The AESO argued that the Livingstone Landowners group s conclusions are based on the assumption that a cost delayed is equivalent to the cost saved but fails to recognize the significance of material and labour cost escalation, changes to the transmission facility owner s cost of capital, four additional years of allowance for funds used during construction or impacts to operations and maintenance costs. 92. The AESO rebutted that the Livingstone Landowners group s estimated cost savings fails to account for consequent distribution costs which are to be borne by a discrete group of distribution ratepayers, unlike transmission costs that are shared among all Alberta ratepayers. 93. The AESO submitted that an interim solution would require a longer outage for the existing wind plants and that proper transmission practices require the AESO to minimize the effects of outages on the system, which also allows market participants a reasonable opportunity to exchange electricity. 94. The AESO further submitted that the concepts proposed by the Livingstone Landowners group are all temporary solutions which do not ultimately replace the need for the Fidler 312S substation. 95. The AESO submitted that the evidence of AltaLink established that there are viable routes north and south of the reservoir and that as such, routing and siting concerns can be properly addressed in the context of the Fidler to Chapel Rock facility application Views of AltaLink 96. AltaLink stated that it intends to file an application for the Fidler to Chapel Rock line in September 2012 with a proposed in-service date of 2015, and that the adjournment of the Fidler 312S substation application to combine it with the Fidler to Chapel Rock line application would result in an increasingly constrained transmission system unable to accommodate scheduled generation additions. It added that the installation of the Fidler 312S substation will have immediate benefits to the transmission system in the area. 97. AltaLink stated that it had not studied any 138-kV solutions that could accommodate 443 MW of transmission capacity, as typically this would require a 240-kV solution. It estimated the cost to be approximately $10 million to $15 million if a complete rebuild of transmission line 893L was built to the capacity suggested by the Livingstone Landowners group. Further, the existing structures of transmission line 893L cannot accommodate a heavier conductor as AUC Decision (December 1, 2011) 17