A year ago, the Alberta government appointed a Critical Transmission Review Committee to determine whether the Alberta Electric System Operator’s (AESO) proposal that two high voltage direct current (HVDC) north-south transmission lines be built because of occasional congestion on the Edmonton to Calgary corridor is reasonable.
In spite of the availability of lower-cost alternatives, the committee agreed with the AESO’s proposal, Premier Alison Redford’s government accepted the committee’s recommendation, and AltaLink and ATCO Electric are now in the throes of planning to commence construction.
Unfortunately, the committee’s recommendation was not based on careful analysis. In fact, the recommended construction will result in overbuilding transmission lines at considerable and unnecessary expense to Alberta electricity consumers. For this reason, further work should be put on hold until a cost-effective solution is identified.
The process by which the committee sought to fulfil its mandate was inadequate and incomplete. Interested parties were granted only one hour to present their views to the committee, including discussion, compared with the many hours that the commission presumably spent interacting with AESO officials. Following a compressed hearing process given the importance of its task, the committee simply summarized what it had “heard” before providing two pages of “analysis” that regurgitated the AESO’s main arguments and concluding that the AESO’s proposal was “reasonable.”
The cost-benefit analysis provided in the University of Calgary’s submission to the committee concluded that “the proposed construction of the two HVDC lines appears to be an over-build of transmission capacity” that cannot be justified. Because the AESO and the committee failed to demonstrate that building two north-south HVDC transmission lines constitutes a cost-effective approach for addressing transmission congestion, the Alberta government should immediately turn this important matter over to the Alberta Utilities Commission.
The commission should now also be asked to decide whether the benefits/costs of building the two north-south lines justify their construction.
Gerry Angevine is a senior economist in the Fraser Institute’s Centre for Energy Policy Studies. This was distributed by Troy Media (www.troymedia.com).