Power system must be upgraded: execs

Alberta’s power grid faces dire reliability problems if the system isn’t substantially upgraded soon, two key players in the industry said Thursday.

CALGARY — Alberta’s power grid faces dire reliability problems if the system isn’t substantially upgraded soon, two key players in the industry said Thursday.

TransAlta Corp. (TSX:TA), which produces most of the province’s electricity from mainly coal-fired power plants, needs a top-notch transmission system to get its product to customers, chief executive Steve Snyder said.

However, there hasn’t been a major power infrastructure project built in the province since the 1970s, even though the population has skyrocketed since then.

“It shouldn’t be a surprise that our system is starting to fall behind North American reliability standards,” Snyder told a Calgary business audience Thursday.

And that’s a “scary spot to be in,” said Scott Thon, chief executive officer of AltaLink, which operates more than 11,800 kilometres of transmission lines and about 270 substations in Alberta.

“Day in and day out our reliability has gone down, our events of breakdowns have skyrocketed over the last five years. We’ve had two major substation explosions, even in this last year,” Thon said.

“If there’s one thing that keeps me up at night, it’s whether we’ll be able to keep the lights on through southern Alberta.”

A major system upgrade is necessary if energy new renewable sources, like wind and biomass, are to make their way to consumers, said Snyder, whose company recently this week agreed to acquire green power producer Canadian Hydro Developers Inc. (TSX:KHD) for $755 million.

“The intermittent nature of many of the emerging renewable generation resources stresses the current grid system,” Snyder said.

“A strong, centralized system enables more renewables expansion. The market wants new renewables. It’s a simple equation.”

The two CEOs were wading into the fierce debate surrounding Alberta’s Bill 50, which would jump-start the construction of high-voltage power lines between Calgary and Edmonton.

One of the most vocal critics has been the City of Calgary-owned power company Enmax Corp., which has said the project could triple the transmission cost on consumers’ energy bills over 10 years.

That could result in an additional $300 per year for a typical single-family home, Enmax says on its website.

“I think there is a lot of misused information, out of context information and quite frankly just plain wrong information out in the public domain on this issue,” Snyder said.

There have also been concerns over the lack of a public hearing process about the project, and over whether the upgrade is a means to export more Canadian-produced electricity south of the border.

“This is full-stop about reliability and any notion otherwise is just sensationalism,” Thon said.

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