Two decades ago, the Alberta government attempted to forecast the province’s electricity needs.
“They were thinking that we would reach 11,000 megawatts by the year 2028,” said Scott Thon, president and CEO of AltaLink. “Last year, we had just over 11,000 megawatts — so 15 years ahead of what the best experts in 1994 thought we would do.”
What those experts hadn’t counted on was the explosive growth that energy-rich Alberta would experience — growth that would strain a power transmission system built in the 1970s and 1980s. That’s necessitated an aggressive push to strengthen the system, with initiatives like AltaLink’s hotly contested Western Alberta Transmission Line (WATL) connecting the Genesee area west of Edmonton to the Langdon area east of Calgary, and a half-dozen transmission reinforcement projects in Central Alberta.
“We’re at a place where we’ve driven this ’74 Chevy for a long time and we’re going to have to buy a new car,” explained Thon, adding that other provinces are in a similar situation.
“We hit that first, but you now see it happening in British Columbia; you’re seeing it much more in Saskatchewan. Those western economies that have been very strong, they’re now having to face all of the things that we have for the last five years.”
In Alberta’s case, much of the associated work is behind it, said Thon. In the case of WATL, work on the terminal stations at either end is well underway, nearly all of the towers are up and crews are pulling wires into place.
“We’re thinking it will be in the middle of next year that that project will be done.”
And once that big north-south line is in place, AltaLink will be able to boost electricity supplies in Central Alberta, said Thon.
“That WATL line will be kind of the express highway between Edmonton and Calgary and we can use all of this infrastructure that’s already there to really power up the Red Deer and Central Alberta regions.”
AltaLink recently obtained Alberta Utilities Commission approval for transmission line upgrades at Red Deer, Sylvan Lake, Didsbury, Innisfail and Ponoka, as well as for new substations near Innisfail, Didsbury and Ponoka. These changes will increase line capacity from 138,000 volts to 240,000 volts in most cases.
Dennis Frehlich, executive vice-president and chief operation officer with AltaLink, said the first of the regional upgrades should begin this fall.
“We’ll be able to have that in place in the 2015 time period, which will be in time to meet future load growth in the region fairly well.”
The remaining projects should wrap up by 2016, he added.
The two men expect WATL and the Central Alberta upgrades to satisfy Southern and Central Alberta’s electricity needs for decades to come, especially since WATL has been designed so that its initial 1,000 megawatt capacity can be easily quadrupled without adding lines.
Meanwhile, the pending sale of AltaLink to Berkshire Hathaway Energy by SNC-Lavalin Group Inc. still requires approval from the Alberta Utilities Commission.
Thon expressed optimism that the $3.2-billion deal will proceed.
“At the end of the day, Albertans won’t see a difference in the operations,” he said.
AltaLink will remain subject to Alberta Utilities Commission and Alberta Electric System Operator controls, said Thon, and will have the same management team and independent board of directors that it does now.
Berkshire Hathaway has committed to reinvest its earnings in Alberta and Canada, and to double its community and charitable contributions over the next three years, to about $6 million.
Operationally, AltaLink should benefit from access to increased resources and the opportunity to share best practices with other utilities owned by Berkshire Hathaway.
Asked about critics’ objections to a foreign company owning the electrical transmission system in Alberta, Thon pointed out that AltaLink previously had shareholders from the United States and Australia.
“Financial capital from around the world has really built Alberta, and there’s nothing different in this.”
At the end of the day, he summed up, it’s all about ensuring the timely and efficient movement of electricity between producers and consumers.
“We have some big initiatives that we’re working on to try to speed up that process, because I know we get a lot of feedback from customers who say we need to get faster at hooking them up, whether they’re a new business that needs power or whether they’re a new generator that wants to supply.”