Enmax Tries to Protect Albertans

All Party Standing Committee on Resources and the Environment

On November 4, 2009, presentations were made to the "All Party Standing Commitee on Resources and the Environment."  Despite the agenda, all presentations and questions centred on transmission infrastructure in the context of the proposed Bill 50.

Contrary to recent promises made by the Premier and the Parliamentary Assistant to the Energy Minister, the public was NOT allowed to make presentations, NOR permitted to ask questions.

Presentations were limited to generation lobby groups, Capital Power (former generation arm of EPCOR), and ENMAX.

A few key points raised during the Q&A segment included:

• Southern PC MLAs concerned about Bill 50 found that no amount of transmission would help their wind power to market (unless it is exported south).  Rather, the Bill 50 transmission is to facilitate coal-fired generation, which by its very nature is incompatible with wind, since it can't be turned on/off when the wind blows (or when the sun shines in the case of solar). Rather, gas-fired generation is necessary for the development of wind, which if situated properly close to consumer demand, minimized the need for transmission.
• Capital Power took it on the chin for improperly siting their peaking plant on the wrong end of the line (it should have been in Calgary to be effective, as where Enmax is building theirs).  Again, this the fault of our provincial policy, which encourages generation to be built with no thought to transmission costs (and therefore, no thought to the resulting electricity cost to consumers).
• The Bill 50 sales job has evolved over the past few weeks.  The so-called "critical" transmission project is no longer 'critical to keep the lights on', but is now sold as 'critical for our future'.  Did the fear-mongering of brown-outs and black-outs end with Halloween?  Quite frankly, it's only "critical to corporate bottom lines", as briefly discussed below.
• Generation (Capital Power and IPPSA) keep reiterating that they're building plants "at their risk", as if they do so as a public service, and not for profit.  Generation neglects to state that due to provincial policy, generation can locate where and when they want, and get free transmission - AT NO RISK (i.e., risk and cost of transmission is paid for the consumers, at consumer's risk).
• Landowner costs: this issue was neglected - again. For the Heartland Transmission segment alone, the Energy Minister recently stated that it is expected to impact 3,100 and 1,100 landowners along the west TUC route and east TUC routes, respectively. That's a lot of people who will be financially impacted, many devasted.  How can this not be an issue?

Walking into last  night's meeting, we were told by an industrial consumer group (whose members consume 30% of our province's electricity) that MLAs are listening only to transmission and generation companies.  It begs the question: why are transmission companies and generation companies driving Bill 50?  It's quite simple.  Each has its agenda, as follows:

• Generation Companies support Bill 50 since don't pay for it. "Critical" transmission enables them to realize their wildest expansion dreams, with no thought about the end cost of electricity to the consumer.
• They build the cheapest generation, to make the cheapest power to get onto the grid.  Unfortunately, that often means generation is of the size, type or location that makes it very expensive to get power to the consumer.  Since the consumer pays both transmission and generation costs, the net result is the consumer is stuck paying for higher electricity costs.  It is inefficient, plain and simple.
• To provide the cheapest power, generation and transmission must be coordinated (like in the good old days . . .).

Capital Power forgot to say how cheap power was when we had coordinated generation/transmission.  More generation does not alone ensure cheaper power.  Effective and efficient coordination of generation/transmission ensures cheaper power.  Capital Power neglected to state its affilicate, EPCOR, stands to make billions in annual revenue off the transmission lines (see below).

Transmission Companies suppport Bill 50, since they will make $billions, at zero risk.  They have $16.5 billion reasons to support Bill 50! They'll make $billions/year for the next 70 - 80 years (normal lifespan of transmission).  All cost and risk is borne solely by the consumer!

Under our 'deregulated system', this massive assignment of wealth is to a small cartel of transmission giants, who are each assigned one or more segments of the so-called "critical" transmission.  Currently, they are paid 8% - 8.5% per year on the capitalized value of their transmission assets (this is expected to increase soon).  So, the more transmission they build, the more they make.  Simple math. All legislated by the province, all paid for by the consumer.  The concensus is that by 2017, infrastructure ordered by Bill 50 will give them $1.5 billion a year, all paid for by the consumer.  To put this in perspective, Alberta's entire grid is valued at about $2 billion! What's more, they will build it with little, if any, cost or scheduling oversight.  It's what they call a "sweetheart deal".

EPCOR's Bruce Brandell summarized their "motivation" with his statement to St. Albert City Council on July 6, 2009: "the more we spend, the more we make".