Electric utility AltaLink, L.P. is taking a major step to upgrade the "backbone" of Alberta, Canada's transmission system. AltaLink has filed an application with the Alberta Energy and Utilities Board (EUB) to build and operate a new 500-kV transmission line between Edmonton and Calgary. The application is for a permit to construct and the license to operate (P&L) the transmission line.

After more than 20 years without any major upgrades to the backbone of Alberta’s transmission system, the Alberta Electric System Operator (AESO) identified the need for the new line in a corridor west of the Queen Elizabeth II Highway in May 2004 and the EUB approved the AESO’s Need application in April of 2005. The AESO, Alberta’s independent, not-for-profit transmission planner, then directed AltaLink to find a route for the line.

“We’ve been working toward filing this application for more than a year; talking to landowners, consulting with First Nations groups regarding traditional land uses, conducting a comprehensive Environmental Impact Assessment, and evaluating route options to find the best route with the least number of impacts,” said Dennis Frehlich, AltaLink’s Executive Vice President and Chief Operating Officer. “We are committed to responsible development balanced with ensuring a secure, reliable and cost-effective supply of electricity to Alberta’s fast growing economy. This transmission line will allow us to achieve these objectives.”

Based on the current scope, schedule and engineering parameters, the estimated cost of the 330-km project is $495 million. With EUB permit & license approval to begin construction still months away and completion not scheduled until late 2009, the cost estimate is accurate within 20%, as required by the AESO for this stage of project development.

“Like other major infrastructure projects in Alberta, cost management is an important component of this project,” said Frehlich. “In this escalating cost environment, it’s critical we move quickly to firm up project costs should we receive approval from the EUB in early 2007. For example, we will need to procure 19,000 tons of steel for this project. We have to carefully manage the rising costs of all needed materials and the challenges presented by a tight market for qualified labour. Ensuring costs are prudently managed for ratepayers is a key priority for AltaLink.”

The filing of the P&L application is an important next step in the process to keep up with Alberta’s growing demand for electricity.

“As the province has grown, our system has grown with it, with the number of new connections to our grid increasing every year since 2002. In fact, in each of the last two years we’ve added twice as many substations as we would normally add in a given year,” said Scott Thon, AltaLink’s president and CEO. “We must now upgrade the electricity backbone that supplies all of this new demand.”

“We recognize that the EUB recently completed a special hearing to allow selected parties the opportunity to voice concerns about the suitability of the west corridor. To meet our obligation to provide reliable transmission service, we must continue moving the project forward as approved in the Need decision. It is critical for this line to be energized in late 2009 to keep up with the province’s economic and population growth.”

“The 500-kV line between the Edmonton and Calgary regions will help us deliver power to all Albertans and ensure a stable, reliable grid. At the same time, the new line will reduce millions of dollars in wasted transmission line losses that Alberta consumers pay for today and enables the lowest cost generation to come on stream for these same consumers,” Thon added. “While the line will provide significant cost benefits for all Albertans, its primary purpose is to keep the lights on. At AltaLink, we realize we must achieve this goal while ensuring those landowners who are affected by this critical piece of infrastructure are treated fairly.”

AltaLink is continuing to work with affected landowners to ensure the various components of compensation paid to landowners are fair. Following input provided by landowners about its compensation methods, specifically regarding Annual Structure Payments (ASP) for landowners with transmission facilities on their property, AltaLink proposed a five-fold increase in ASP for landowners who will have the new 500-kV towers on their land. This increase, pending approval from the EUB, moves the annual payments up to $945 per year for a single circuit 500 kV tower and $1,155 for a double circuit tower, bringing the payments in line with what other industries typically pay.