DECISION 2001-71
ESBI ALBERTA LTD.
SYNCRUDE CANADA LIMITED/ALBIAN SANDS ENERGY PROJECT
PART A: INTERIM CONNECTION AND COMPENSATION
EUB Decision 2001-71 (August 30, 2001)
ALBERTA ENERGY AND UTILITIES BOARD ESBI ALBERTA LTD.
ESBI ALBERTA LTD. SYNCRUDE CANADA LIMITED/ALBIAN SANDS ENERGY PROJECT
PART A: INTERIM CONNECTION AND COMPENSATION
CONTENTS
1 INTRODUCTION...... 1
2 LEGAL & PROCESS ISSUES...... 2 2.1 Views of Syncrude...... 2 2.2 Views of Albian ...... 3 2.3 Views of EAL ...... 4 2.4 Views of the Board ...... 4
3 FACILITY & TECHNICAL ISSUES...... 6 3.1 Views of EAL ...... 6 3.2 Views of Syncrude...... 11 3.3 Views of Albian ...... 15 3.4 Views of AE...... 18 3.5 Views of the Board ...... 19
4 COMPENSATION ISSUES...... 21 4.1 Views of EAL ...... 21 4.2 Views of Syncrude...... 22 4.3 Views of AE...... 22 4.4 Views of Albian ...... 22 4.5 Views of the Board ...... 22
5 TERMS AND CONDITIONS ISSUES ...... 23 5.1 Views of EAL ...... 23 5.2 Views of Syncrude...... 23 5.3 Views of Albian ...... 24 5.4 Views of AE...... 26 5.5 Views of the Board ...... 26
6 ORDER ...... 29
APPENDIX 1 – ANNUAL COST OF SERVICE ...... 31
EUB Decision 2001-71 (August 30, 2001) • i
ALBERTA ENERGY AND UTILITIES BOARD Calgary, Alberta
ESBI ALBERTA LTD. SYNCRUDE CANADA LIMITED/ALBIAN SANDS Decision 2001-71 ENERGY PROJECT Application No. 1240682 PART A: INTERIM CONNECTION & COMPENSATION File No. 5700-1
1 INTRODUCTION
On July 27, 2001 the Board received an application (the Application) from ESBI Alberta Ltd. (EAL) with respect to the use of facilities owned by Syncrude Canada Limited (Syncrude), located on Syncrude’s Industrial System site in the Fort McMurray area, and required by EAL to connect the oil sands project of Albian Sands Energy Inc. (Albian)1 to the Alberta Integrated Electrical System (AIES).
Specifically, the Application requested:
a) a final order under Section 17(2)(e) of the Hydro and Electric Energy Act (HEEA), having regard for Section 17(2.1) of HEEA, requiring Syncrude to share and participate or otherwise combine its interests in certain transmission facilities described below (the "Syncrude Facilities") with ATCO Electric Ltd. (AE), the owner of certain transmission facilities (the "ATCO Facilities"), and an interim order prescribing suitable terms and conditions (T&C)T&C") in the period between the effective date of the order and the issuance of a final order prescribing T&C;
b) a final order under Section 17(2)(b) of HEEA requiring Syncrude to connect the Syncrude Facilities with the ATCO Facilities as contemplated by Connection Order No. U2001-067, dated March 30, 2001, issued to Syncrude;
c) a final order under Section 17(5) of HEEA requiring that the order contemplated by the paragraph above be complied with so as to permit the interconnection to be in place and operating by September 5, 2001, subject to reasonable modification to accommodate Syncrude's maintenance schedule, but in no event later than 15 September 15, 2001;
d) an interim order under Section 17(6) of HEEA determining the compensation to be paid to Syncrude by EAL on behalf of its customers for use of the Syncrude Facilities for the provision of system access service in the period between the effective date of the order and the issuance of a final order setting compensation.
The Board also received correspondence from Syncrude dated July 27, 2001, in relation to the Application.
1 Albian is a joint venture company formed to operate the Muskeg River Mine on behalf of Shell Canada Limited (Shell), Chevron Canada Limited and Western Oil Sands Inc.
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Following a meeting among the parties on August 1, 2001, in a letter of the same date, the Board established a written process in relation to EAL’s requests for interim relief, as follows:
Comments from the Parties August 13, 2001 Reply from the Parties August 20, 2001.
On August 13, 2001 the Board received comments from Syncrude, Albian, and AE. On August 20, 2001, the Board received reply from EAL, Albian, Syncrude and AE.
The Board also received further correspondence from Syncrude dated August 24, 2001, responding to comments and suggestions made in the reply of EAL and Albian. The Board also received correspondence from Albian on August 24, 2001 responding to the comments of Syncrude of the same day.
For the benefit of interested readers the Board notes that on November 21, 2000 the Board issued Orders U2000-318 and U2000-328 approving ATCO Electric’s Muskeg River 240 kV transmission project (Application 2000265). At that time the Board noted that the final disposition of that application was pending upon a reliability study being provided by the Transmission Administrator (TA), a resolution of technical concerns raised by TransAlta Energy, Suncor and Syncrude, and agreement among the stakeholders with respect to system access.
On March 30, 2001 the Board issued Order U2001-067 approving the interconnection of the aforementioned ATCO Muskeg River transmission facilities with the Syncrude 240 kV transmission line 201-PTL260-1. At that time the Board noted that it had not received the reliability study requested of the TA. In light of the Albian project’s need for 20 MW of power for the construction and commissioning phase, however, the Board still approved the connection as it was satisfied it would not adversely affect the transmission system in the Fort McMurray area.
In this Decision, in addition to the requested interconnection, the Board has dealt with the issues of compensation and liability on an interim basis. The Board notes that parties have raised a number of other issues which may affect the public interest. The Board considers that these issues can be dealt with in a subsequent public hearing as well. These issues include, but are not restricted to:
• The effect upon Syncrude’s ISD status and the effect upon other ISD holders, • Whether Syncrude can be deemed to be a utility, and; • System reliability.
2 LEGAL & PROCESS ISSUES
2.1 Views of Syncrude Syncrude initially opposed EAL’s request for interim relief. Syncrude emphasized the magnitude of its investment in its integrated oilsands operations and the importance to those operations of the reliability of its privately constructed electric Facilities. Syncrude was primarily concerned
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that the reliability of its Facilities not be affected by the proposed interconnection. Syncrude did not consider that either it or the Board had had an adequate opportunity to address those primary issues in the circumstances.
Syncrude also raised concerns about the potential effect of an interim order granting the interconnection on its status under the EUA and on the status of its ISD under HEEA. In particular, Syncrude sought assurances that the interconnection would not result in its Facilities being characterized under the EUA as an “electric utility” and, therefore, subject to the requirements of the EUA. Syncrude argued that the designation of the Facilities as part of its ISD should prevail, but submitted that if there was any question in that respect, the Board must conduct a full and fair process to consider the issue.
Syncrude also took issue with Albian’s apparent position that it should be treated as any other customer of the TA once the interconnection was made. Syncrude submitted that Albian’s position was inconsistent with the Cooperation Agreement between Syncrude and Shell. Syncrude submitted that it’s own electrical needs through its own Facilities should not be subordinated to Albian’s as a result of the interconnection.
Syncrude questioned whether the Board had jurisdiction to grant the relief requested by EAL on an interim basis, particularly what amounts to an interim tariff with T&C. Syncrude also submitted that the Board had no authority to approve what would amount to an expropriation of its Facilities by authorizing a significant interference with the reliability of its system.
Overall, Syncrude submitted that the Application raised significant legal issues that could not be adequately addressed by the parties or the Board on an interim basis, particularly in the limited time available before the proposed interconnection was to be made. Syncrude submitted that the Board should dismiss the request for interim relief and conduct a full public hearing with broader stakeholder input.
However, having received and considered the submissions and reply of Albian, Syncrude advised the Board in its letter of August 24, 2001, that the only outstanding issue of any concern at the interim stage was the question of liability. Syncrude indicated that it was satisfied with Albian’s proposal for the allocation of any incremental risk to Syncrude between Albian and the TA (or its customers), so long as Syncrude was not exposed to any of that risk.
2.2 Views of Albian Provided that the Board was satisfied that Syncrude had a fair opportunity to comment on the reliability issues or was protected from exposure to these risks pending a future proceeding, Albian submitted that the interim relief sought in the Application could be granted. In these circumstances and in light of Syncrude's undertaking to the Board that use of its transmission facilities remains "within the jurisdiction and discretion of the Alberta Energy and Utilities Board." Albian maintained that it was unreasonable to delay the $3.5 billion Project's ultimate start up and production of oil to accommodate open ended oral hearings to explore matters that can and should be addressed in other proceedings. Albian noted that future public processes, including the compensation proceeding pursuant to subsection 17(6) of HEEA and the TA's development plan were available for Syncrude to present its views to the Board.
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Albian stated that the Board must balance Syncrude's claim for a further opportunity to be heard in an oral hearing with the interests of other affected parties and the need for decisions on matters in the public interest to be made in a timely and fair manner. Albian maintained that balancing in this case must take into account that delaying the connection to hold an oral hearing would jeopardize the Muskeg River Mine's Project schedule, resulting in start-up delays and significant loss of production.
2.3 Views of EAL EAL emphasized the assurance given by Syncrude in support of its ISD application in its letter of April 9, 1998, that the Board retained jurisdiction to authorize the use of the Syncrude Facilities where that use would promote “orderly, efficient and economic development.” EAL characterized the reliability, compensation and liability demands made by Syncrude as excessive and as undermining Syncrude’s co-operative efforts in relation to the technical aspects of the interconnection.
EAL submitted that section 17(2.1) of HEEA demonstrated that all transmission facilities, regardless of ownership or use, are charged with a public interest and may, subject to an order of the Board, be required for public service. In EAL's submission, section 17(2.1) highlighted the Board's authority and obligation, to permit access to transmission facilities such as those owned by Syncrude, where that access is in the public interest.
EAL also urged the Board to confine its consideration of the request for interim relief to the 20 MW of DTS service required by Albian for construction, pre-commissioning and commissioning. EAL emphasized that the Application was not for the 180 MW of STS service that will be required once the ATCO Power cogeneration facility is constructed. EAL submitted that Syncrude’s reliability concerns were primarily related to the future ongoing operation of the Project, not the construction and commissioning of the Project. In that respect, EAL noted that the Board had concluded that there were no reliability concerns in relation to the interconnection when it granted Order U2001-067 on March 30, 2001.
EAL dismissed the legal issues raised by Syncrude as being immaterial for interim purposes. In EAL’s view, these issues could be dealt with more fully in a final proceeding, but did not require resolution at the interim stage.
2.4 Views of the Board The Board first wishes to address the jurisdictional issue raised by Syncrude in relation to EAL’s request for interim relief pending final consideration of the Application by the Board.
Syncrude has suggested that the Board lacks jurisdiction to grant an interim order in this case, particularly one imposing interim T&C with liability provisions. In the Board’s view, Syncrude’s argument is without merit. Although the Application, including the interim relief, is made pursuant to the HEAA, section 52(2) of the Public Utilities Board Act (PUB Act) provides as follows:
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(2) The Board may, instead of making an order final in the first instance, make an interim order and reserve further direction, either for an adjourned hearing of the matter or for further application.2
Section 10(1) of the Alberta Energy and Utilities Board Act (AEUB Act) provides that:
10(1) For the purposes of carrying out its functions, the Board has all the powers, rights and privileges of the ERCB and the PUB that are granted or provided for by any enactment or by law.
In the Board’s view, it’s power to grant interim orders under the PUB Act is brought forward under section 10(1) of the AEUB Act. Accordingly, the Board considers that, where it is in the public interest to do so, it may make an interim order in connection with an application under section 17(2) of the HEEA.
In the Board’s further view, should it choose to grant an interim order, all other legal issues raised by Syncrude, to the extent that they are determined by the Board to be relevant, can be addressed in the final proceeding to consider the Application. At this stage, the Board makes no determination with respect to the relevance of those issues or with respect to the merits of those issues. Those issues include impacts on Suncor’s ISD, regional ISD issues, the proper interpretation of HEEA in light of the EUA and Syncrude’s status (or not) as an “electric utility”. The Board does wish to expressly indicate in this decision, however, that its conclusions herein should not be taken as having any impact on the status of Syncrude’s facilities under the EUA. Specifically, in other words, on an interim basis, if Syncrude’s facilities are not an “electric utility” (about which the Board makes no present determination) they will retain that status unless and until the Board otherwise determines in the final proceedings to consider the Application.
The Board also notes that Syncrude has expressed concern with respect to its status as an ISD. The Board considers this to be a matter more appropriately dealt with in the future proceeding where all interested parties will have the opportunity to express their views.
The Board considers that the remaining issues in this proceeding resolve to the following three:
1. Technical Issues 2. Compensation 3. Liability.
These issues are discussed somewhat more fully below, but in light of the submissions of the parties, which have resulted in all issues other than residual liability effectively falling away for interim purposes, the Board is of the view it has afforded parties a full and fair opportunity to make their views known. Particularly in light of the urgent need for Albian to receive 20 MW of DTS system access service, the Board has concluded that no further process is necessary at the interim stage of this Application.
2 See also section 54 of the PUB Act.
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The Board agrees, however, that there are significant issues that must be resolved through a more comprehensive process prior to the Board making a final decision in relation to the Application. The Board will issue further directions with respect to that process in due course.
For the reasons which follow in relation to each of these 3 issues, however, and subject to the directions contained in the balance of this Decision, the Board has concluded that it is in the public interest to grant the applied for interconnection order.
3 FACILITY & TECHNICAL ISSUES
3.1 Views of EAL In the Application filed July 27, 2001 EAL stated the purpose of the Application in the short term was to permit EAL to provide 20 MW of DTS system access service to the Albian oil sands project in a manner consistent with efficient, economic and orderly development of the transmission system in the Fort McMurray area. Commencing September 1, 2002 Albian requires 180 MW of STS service to supply power to the AIES from a cogeneration plant, to be located on the Albian site, and owned and operated by ATCO Power.
EAL characterized the Application as being the first of its kind in the deregulated environment. Syncrude is the owner of the industrial process that consumes energy transmitted by the Syncrude facilities and produced in large part by Syncrude's on-site generation. The Syncrude facilities and EAL's need for access thereto exist in an environment of oil sands development that is experiencing rapid growth in load and generation (mainly cogeneration associated with local industrial systems).
At paragraph 5 of the Application EAL listed the Syncrude facilities to which it sought access. They are as follows:
(a) two 72 kV lines (6LML1 and 6LML2) between the ATCO Ruth Lake Transmission Station 848S and the Syncrude Plant 31 Transmission Station; (b) the Syncrude Plant 31 Transmission Station; (c) one 72 kV line (East Mine Feeder) between the Syncrude Plant 31 Transmission Station and the Syncrude Mildred Lake D05 Transmission Station; (d) the Syncrude Mildred Lake D05 Transmission Station ; (e) the Syncrude portion of the 240 kV line (201-PTL260-1) between the Syncrude Mildred Lake D05 Transmission Station and the AE Muskeg River Transmission Station 847S; and (f) the Syncrude portion of the 240 kV line (201-PTL260-2) between the AE Muskeg River Transmission Station 847S and the Syncrude Aurora North G01 Transmission Station. EAL maintained that all the Syncrude facilities were within the definition of "transmission line" set out in Section 1(1)(o) of the HEEA and as far as EAL was aware, Syncrude was the owner and operator of the Syncrude facilities. EAL stated that no new facilities or modifications to existing facilities that have not already been approved were required by the Application.
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There was sufficient capacity on the Syncrude facilities to accommodate Syncrude's requirements and the access sought by EAL.
Commissioning of the Albian project was scheduled to commence on approximately September 1, 2001. In order to serve Albian's 20 MW DTS load in time to meet Albian's commissioning schedule without unduly disrupting the operations of Syncrude, it was necessary to interconnect the ATCO facilities and the Syncrude facilities during a period of routine maintenance at the Syncrude plant. In the interest of accommodating Albian's request for an interconnection to the Syncrude facilities by August 31, 2001, Syncrude undertook to create an "interconnection window" originally scheduled for 8 p.m. on August 27, 2001 to 8 a.m. on 31 August 2001. Further minor modification of the schedule by a few days either before or after the originally estimated outage window may be required in order to accommodate Syncrude's operations. EAL stated that Syncrude was also accelerating its schedule to meet the in-service date by modifying its protection and control system at its Mildred Lake D05 and Aurora North G01 Transmission Stations.
With respect to the alternatives considered EAL stated that it considered the Albian 20 MW short-term and 180 MW long-term requirements in the overall context of transmission development in the Fort McMurray area. That overall context included the current and future operations of the Syncrude and Suncor oil sands projects and their associated cogeneration and transmission requirements. It also included the requirements of the Town of Fort McMurray and surrounding areas.
To serve Albian’s immediate requirement for 20 MW of DTS service for project commissioning EAL reviewed the existing 25 kV distribution system in the area and found it to be an unsatisfactory option. The existing 25 kV line is almost fully loaded; the available capacity is only 3 to 5 MW. While sufficient for Albian's construction power requirements, the available capacity was much less than the 20 MW commissioning requirement for Albian.
In order to provide the 20 MW required for commissioning EAL considered construction of a new 25 kV line from the AE Ruth Lake Transmission Station 848S to Albian. The line would have been almost 50 kilometers long and would have required voltage regulators and a large conductor. The expense of this option could not be justified in the circumstances. The line would only be sufficient for the commissioning stage of Albian. During normal operations and with the ATCO Power cogeneration plant on-line, additional facilities would be required in any event.
The preferred option for meeting Albian's DTS requirements was to serve Albian's construction load (3 to 5 MW) from the existing 25 kV system until the ATCO facilities could be constructed. The ATCO facilities would then be interconnected with the Syncrude facilities in time to provide 20 MW of DTS service for the commissioning phase of Albian. The ATCO facilities would be designed with sufficient capacity to handle the future STS requirements of the ATCO Power cogeneration plant.
EAL stated that it also considered a number of options to serve the 180 MW STS requirements of the ATCO Power cogeneration plant. One option was to build a new 144 kV line from the AE Ruth Lake Transmission Station 848S to the Albian site.
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This option was quickly rejected as there is no 144 kV bus at the AE Ruth Lake Transmission Station 848S. Constructing a new 144 kV line would have required expanding the AE Ruth Lake Transmission Station 848S, building a new 144 kV ring, installing three new 144 kV circuit breakers, replacing at least the two 144/72 kV 45/60 MVA power transformers and possibly two 260/72 kV 100 MVA power transformers, and establishing a new right-of-way from Ruth Lake through the active mining area north to Albian. The line would be on the order of 50 kilometers long, and would cost approximately $10 million. The transmission infrastructure in the area is 240 kV3 and this option would not tie into future transmission developments.
A second option was to build a new 240 kV line from the AE Ruth Lake Transmission Station 848S to Albian. This would have required one new 240 kV circuit breaker at Ruth. At 240 kV, the line would be compatible with existing facilities and would permit future transmission developments in the area. However, this option was rejected for a number of reasons. The line would be on the order of 50 kilometers long and would cost approximately $10.5 million. The new line would parallel existing Syncrude transmission facilities for a majority of the route thereby duplicating facilities that have existing capacity to serve the requirements. This option would also require establishing a new 240 kV route through the active Syncrude and Suncor mining area. Reviewing this option with Syncrude and Suncor demonstrated that no clear permanent routes through the mines were available and line relocations with the associate outages would be required on a regular basis.
The final option, and option recommended by EAL, was to tie Albian into the existing Syncrude 240 kV transmission line in an in/out arrangement involving:
• Six kilometers of double circuit 240 kV transmission line from Albian to the Syncrude Facilities;
• Six kilometers of 240 kV double circuit line from Syncrude's Mildred Lake DO5 Transmission Station to tie into one of the transmission lines at the TransAlta Millennium Transmission Station4 with two additional 240 kV circuit breakers at the Mildred Lake DO5 Transmission Station;5 and
• Use of the TransAlta 240 kV transmission facilities connecting the Suncor Millennium oil sands plant with the AE Ruth Lake Transmission Station facilities through agreement or regulatory order.
EAL stated that this option minimized the length of 240 kV line construction, avoided building facilities in an active mining area, tied the existing Syncrude 240 kV transmission line into a
3 The Board notes that industry generally refers to the actual lines as being of 240 kV construction. Because, historically, ATCO Electric has generally operated their lines at a voltage somewhat higher than 240 kV, they have chosen to call these lines 260 kV. There is no difference in the actual construction, just the voltage at which they choose to operate the lines. 4 It is anticipated that the TA will directly assign construction of these facilities to ATCO Electric in the near future. 5 These are the ATCO Electric facilities that were approved by the Board by approvals U2001-116 and U2001-117.
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higher reliability network, and supported the future orderly development of the transmission system.
With respect to power flows and reliability EAL stated that it had reviewed the impact on system reliability caused by the Albian interconnection and by the construction of the proposed 240kV lines between the TransAlta Millennium Transmission Station and the Syncrude Mildred Lake D05 Transmission Station. The commissioning of Albian would significantly increase reliability at the Syncrude Aurora North G01 Transmission Station, the Syncrude Mildred Lake D05 Transmission Station and the TransAlta Millennium Transmission Station. EAL acknowledged there would be a minor reduction in the reliability of the line between the Syncrude Aurora North G01 Transmission Station and the Syncrude Mildred Lake D05 Transmission Station (Lines 201- PTL260-1 and 201-PTL260-2). EAL maintained its reliability analysis for the area determined that the reliability reduction on this part of the Syncrude facilities would be about 11 percent or, put another way, one additional outage every ten years6.
In reply EAL maintained that Syncrude’s submission attempted to surround the Application in an aura of complexity in large part by focusing on matters that were outside the scope of the Application and with the apparent purpose of convincing the Board that an oral hearing should be held. Therefore, EAL suggested it would be useful to review what the Application actually entailed and what it did not entail. When this was done, EAL was confident it would be clear that the complexity that Syncrude attempted to create did not exist.
EAL stated the application sought access to the facilities7 in order to provide 20 MW of power to Albian for purposes of commissioning the Albian project. The necessary Syncrude Facilities8 and those of AE9 were in place. The Board's Connection Order No. U2001-067 authorizing interconnection of those facilities for purposes of delivering 20 MW of power to Albian (the "Connection Order") was also in place. The interconnection will take place during a window of opportunity suggested by Syncrude. The interconnection will be completed in a manner developed in close consultation with Syncrude and, in any event, the connection of one transmission line to another is not an unusual or extraordinary undertaking. EAL also stated that neither the physical interconnection nor the provision of 20 MW of power on the Facilities would adversely affect reliability.10
EAL stressed that the Application did not seek access to the facilities at this time for the ongoing operational power requirements of the Project nor did the Application seek to provide STS service to the proposed ATCO Power Ltd (ATCO Power)ATCO Power") cogeneration plant that would be located on the site.
6 See the Power Systems Solutions report "Reliability of Transmission System in Fort McMurray Area, April 2001", page 1 to 3. 7 Defined in paragraph 5 of the Application. 8 As noted in paragraph 13 of the Application, the ATCO Electric facilities were approved by Order Nos. U2001-116 and U2001-117 on 18 May 2001. 9 Described in paragraph 13 of the Application. 10 As noted in paragraph 12 of EAL’s Reply Comments, of August 20, 2001, the Board made this determination when it issued the Connection Order.
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With respect to the reliability study EAL noted that Syncrude had complained EAL had not filed the Reliability Study11 in support of the Application.12 EAL stated it did not rely on the Reliability Study for purposes of this Application. The Reliability Study was mentioned in paragraph 30 of the Application at the end of the discussion in paragraphs 23 to 30 regarding overall transmission planning in the Fort McMurray area.
With respect to reactive power requirements EAL noted that Syncrude, at paragraph 84 of its submission, raised the concern that the proposed interconnection would require Syncrude to increase its production of VArs. EAL has addressed this concern by accepting a solution proposed by Syncrude. To the extent that Syncrude legitimately requires additional VAr support from the AIES in order to accommodate the Albian load, this will be permitted. EAL stated it has advised Syncrude in writing of this fact and would accept an approval condition to this effect.
EAL acknowledged Syncrude’s concern that it not incur ratchets as a result of the use of the facilities to provide 20 MW of power to Albian was valid. EAL and Syncrude have explored a number of ways to address this issue, any one of which deal with the concern. EAL believed that the most manageable option would be to waive the combined DTS ceiling for the first year until the D05 to Millennium work is completed such that Syncrude will not be subject to a ratchet because of the commissioning of Albian. As a result of discussions with Syncrude, EAL believed that this solution was acceptable and undertook to implement it.
With respect to STS service, however, EAL stated that Syncrude’s concern13 regarding future use of its 72 kV system for exports of power from Albian was groundless. There was no existing authorization to connect the proposed cogeneration plant at the Albian site with the facilities. EAL would not permit exports of power from the proposed co-generation plant until the D05 to Millennium 260 kV interconnection was complete.
EAL claimed that Syncrude’s ISD did not absolve it of its responsibilities under Section 17 of the HEEA. EAL noted the Board made this perfectly clear in its Decision D 99-4 with respect to Application 970488, Imperial Oil Resources Limited Industrial System Designation Cold Lake Expansion Project, Section 10, "Sharing of Transmission Facilities".
EAL noted that Syncrude had also raised the potential creation of "a regional industrial system collectively owned and operated by oil sands producers." EAL suggested whether this approach was permitted under the current legislative regime and even if it were, whether it would be in the public interest are questions that went well beyond the scope of the Application. EAL believed that discussions of 'regional solutions' were worth pursuing but EAL also recognized that the regional solutions would attract intense scrutiny and debate from all stakeholders in Alberta.
EAL observed that in paragraph 25 of Syncrude’s submission, Syncrude questioned the fairness of Albian receiving regulated service from the TA when Syncrude and Suncor/TransAlta paid one hundred percent of the cost of system expansions to serve their facilities.
11 Reliability of Transmission System in Fort McMurray area, April 2001 prepared by Power System Solutions. 12 Syncrude Submission, August 13, 2001, paragraph 64. 13 Syncrude Submission, paragraph 86.
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The answer to this concern was that the TA sought to provide service to Albian in accordance with its current tariff. It was open to Syncrude or any other stakeholder to raise concerns regarding the TA's tariff in the context of EAL's General Tariff Application or through the review provisions in the EUA.
EAL also observed that Syncrude benefited from the IES when it started its operations in the same way that each new customer benefits from those who went before them. EAL noted that Syncrude and Suncor/TransAlta chose to construct transmission facilities as part of their ISDs. Bearing the cost of the transmission facilities inside the ISD was a consequence of that decision in the same way that savings from avoiding transmission tariffs were a benefit.
3.2 Views of Syncrude In their correspondence of July 27, 2001 Syncrude did not comment directly upon the use of their facilities by other parties. EAL, however, as footnote 2 to the Application provided the following quote from an undertaking set out in a letter from Syncrude to the Board, dated April 9, 1998 wherein Syncrude stated as follows:
"Syncrude notes that other parties, namely Alberta Power Limited and GRIDCO, have expressed support for Syncrude's Application on the basis that the use of Syncrude's industrial system transmission facilities by the AIS is not precluded. Shell has a similar concern regarding future use of this infrastructure for its purposes.
Syncrude never intended and does not believe that the industrial system designation for its proposed system would preclude AIS or Shell access to the Syncrude facilities, where such access achieves orderly, efficient and economic development. It is Syncrude's view that the potential for such use remains within the jurisdiction and discretion of the Alberta Energy and Utilities Board. Syncrude would certainly not object to the Board acknowledging this in its decision or approval of Syncrude's [industrial system designation]."
In its comments of August 13, 2001 Syncrude offered extensive comments upon the development of its facilities and its dealings with EAL and the other interested parties. The Board will only note the salient facts. For a detailed chronology of events the interested reader is invited to review paragraphs 4 to 60 of Syncrude’s submission.
Syncrude noted that it constructed its oil sands mining, extraction and upgrading facilities at Mildred Lake in the mid-1970’s, commencing operations in 1978. Syncrude required a reliable supply of thermal and electrical power at Mildred Lake. To obtain the required level of reliability, Syncrude stated it had a dedicated utilities plant constructed at Mildred Lake (Syncrude Utility Plant)Syncrude Utility Plant”). Under the legislation applicable at the time, private unregulated electrical facilities could be constructed on one’s own property. It was pursuant to these provisions that the Syncrude Utility Plant was constructed.
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Syncrude stated that in the mid-1990’s it applied to the Board for approval of a new oil sands mine and extraction facility located approximately 35 kilometers north of Mildred Lake, at a site called “Aurora”. The Aurora ISD facilities commenced operation on July 1, 1999. An electrical transmission line connecting Syncrude’s Aurora and Mildred Lake facilities was an integral part of Syncrude’s plan to integrate its existing Mildred Lake facilities with its new Aurora project. Syncrude stated that if the transmission facilities were inoperable or inaccessible, Syncrude could not operate its Aurora extraction plant and could, currently, lose 125,000 barrels of bitumen production a day. In 2003, this number will rise to approximately 250,000 barrels per day.
Syncrude noted that on September 6, 2000, AE filed Application No. 2000265 with the Board for approval of the construction of a transmission line from Albian’s Muskeg River Mine project to Syncrude’s transmission facilities. The application also requested an interconnection between this new transmission facility and Syncrude’s Aurora 260 kV line. Syncrude replied to the ATCO application with a conditional letter of support based on the following understandings:
• The introduction of the Muskeg River Facility and transmission lines will not affect Syncrude’s current ISD exemption as per Board order HE 9825 (or future extension of the ISD) from the EUA in any manner now or in the future.
• That this facility does not cause Syncrude’s ISD or transmission line to be deemed to be a “utility” as defined in EUA.
• As the owner of an unregulated transmission facility, which is a critical component of its integrated oil sands operation, Syncrude retains capacity and operating rights to ensure its reliability and integrity. This is particularly true in the establishment of islanding logic that does not negatively impact Syncrude’s production.
• That adequate effort, given the time frame, is being made by the TA to address the operational, commercial, and technical concerns that Syncrude has made with respect to the Muskeg River Application.
Prior to the filing of ATCO’s application Syncrude also noted that it wrote to ATCO, on June 26, 2000, requesting information from AE to deal with a number of concerns that Syncrude had with the proposed interconnection. Among the concerns were the lack of any commercial arrangements with the TA, operational issues, technical issues and the requirement of system reliability studies to determine the extent of the impact the interconnection would have on the overall reliability of Syncrude’s operations. Syncrude continued to advance these concerns and above requirements through the balance of 2000 to the current time, including the meeting organized by Board staff for August 1, 2001.
With respect to reliability Syncrude noted that it only received the TA’s reliability study on August 1, 2001 from AE at the Board staff meeting. Syncrude was unable to provide detailed comments regarding the study but maintained there were manifest errors and deficiencies on the face of the study. In particular Syncrude stated the study was grievously erroneous in that it had
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been modelled out of sequence. The study assumed the sequence of the base case which exists today, then the proposed D05 to Millennium work that occurs and lastly the Albian interconnection. In reality, the Albian interconnection occurs first, then the Albian generation and power exports are put on line and, lastly, the proposed DO5 to Millennium work was completed.
Syncrude noted that when Albian tied in, there would be an additional load without any new generation for a period of over one year. By virtue of the increased complexity of the system, Syncrude maintained overall reliability had to decrease. The incorrect timing used in the study necessarily skewed the reliability results. Syncrude stated its purpose in requesting that this analysis be performed was to get an accurate accounting of the impact of the Albian interconnection. By avoiding the transition period between the load and the Albian generation, the reliability situation was much worse than what was reflected in the study. Syncrude stated the Application, which relied on the study for the proposition that the Albian interconnection significantly increases reliability from Syncrude and Aurora North to GO1 was simply wrong.
Additionally, Syncrude claimed there was a major deficiency admitted in the study. It was only a system adequacy analysis because of its steady assumption of the operating conditions, which would be a best case operating scenario. This was a significant problem and resulted in Syncrude being unable to assess a major component of the risk associated with the Albian Muskeg River interconnection because the study did not model the range of operating conditions that could be encountered. In Syncrude’s view this approach was too simplistic and was neither diligent nor adequate in addressing the risk to Syncrude. The deficiencies and errors identified were not surprising to Syncrude because to the best of its knowledge, no one from the consulting firm preparing it contacted Syncrude.14
With respect to Albian’s reactive power requirements Syncrude stated that it was limited to the amount of VARs it could import from the grid. These limitations were established by the TA-OP 244 operating procedure. The proposed Albian interconnection would force Syncrude to increase its production of Vars from its generating units to support Albian’s system because Syncrude was limited to what it could draw from the grid.
Syncrude pointed out that since Albian’s only connection to the Grid was through Syncrude’s facilities, by default Syncrude was going to be responsible for managing Albian’s electrical imports from the Grid along with its own. Albian has DTS service of 20 MW and Syncrude has a 15 MW DTS contract with the TA. When attempting to import DTS service of 15 MW, Syncrude will be forced to continually monitor the Albian consumption and adjust its tie line controller to maintain its import at 15 MW plus whatever Albian might be consuming at any given point in time. Syncrude noted that any variation in the Albian consumption would force Syncrude to adjust its setting to maintain the 15 MW consumption and accommodate Albian’s import or be forced to incur ratchets.
14 The deficiencies were to some extent acknowledged in the report at p. 1 where it is stated: “The study was limited in scope to the transmission adequacy assessment since the transmission security assessment is impossible to assess in the absence of detailed knowledge of future operating philosophies and rules”.
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With respect to the provision of STS service Syncrude noted that its current connection to the grid through the Ruth Lake Substation consisted of a 72 kV transmission system. This system is incapable of handling exports of electricity from Albian Muskeg River Mine project associated with STS service. The Application is not limited to the provision of DTS service. Syncrude stated its system was physically incapable of handling the STS service that the TA would provide Albian. The TA’s position has been that STS service will not be provided until the DO5 to Millennium double 240 kV interconnection was complete. However, given the tendency of the TA to change positions, Syncrude remained concerned. Syncrude stated it would not permit the export of Albian power through its 72 kV system.
Syncrude disagreed with EAL that it chose the most economic and efficient option to provide Albian with service. Syncrude maintained the Application lacked a credible assessment of the alternatives, specifically, when it came to assessing the alternative of building a new line. It was Syncrude’s position that the most economic and efficient way for Albian to have been served was for Albian and Syncrude to work together through the Cooperation Agreement and develop their own integrated or regional ISD structure. Syncrude submitted that a regional industrial system collectively owned and operated by oil sands producers may be the most orderly and efficient manner of operations. What was proposed by the TA, however, was that Syncrude effectively operate a regional system, but with no control over its design, all of the attendant risks and few of the possible benefits.
In reply Syncrude stated that it fundamentally disagreed with AE regarding its views on reliability. The interconnection proposed by the Transmission Administrator (TA) degraded Syncrude’s reliability. Syncrude submitted that it should not be required to incur this interconnection, on the terms proposed by the TA, when it would automatically threaten Syncrude’s reliability, which reliability had been created with considerable planning by Syncrude and at considerable cost to it.
Syncrude suggested that AE was likely confusing the concept of reliability required for oil sands operations with the concept of reliability offered by the Alberta Interconnected System (AIS or grid). With respect to the grid, the loss of several hours of power did not have a serious enough impact on the vast majority of the TA’s customers to make it worth going to extraordinary ends to ensure reliability. Since the vast majority of grid customers have businesses that would suffer relatively minor losses in the event of power interruption, the design basis for that system and the reliability it provided was fundamentally different than that required by oil sands operations. Several hours of power outage for Syncrude would result in a 12 to 24 hour process outage and a loss of millions of dollars in revenue. Experience in the oil sands industry has shown that if a power outage occurred during winter conditions, recovery from impacts on a water based process can take several weeks.
Syncrude stated that the interconnection applied for by the TA, and supported by Albian and AE, was anything but orderly, efficient and economic. The interconnection, as applied for, added additional and unjustifiable risk. Syncrude maintained that the most orderly, efficient and economic approach to the interconnection, which would have respected the necessity of existing oil sands operators for reliability, would be to have constructed a double 260 kV line between Syncrude’s GO1 and DO5 substations in order to accommodate the Albian interconnection.
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Syncrude stated this was exactly what it was negotiating under the Cooperation Agreement before Albian or ATCO Power made the decision to try and save some capital by getting grid access to the Muskeg River site through the TA.
Syncrude noted, in paragraph 72 of its written submission, it indicated that AE was the only party that continued to recognize Syncrude’s right to priority. Syncrude found the position taken by AE in its August 13, 2001 submission disturbing and inconsistent with its previous position. Now AE was taking the position that Albian was “simply another customer of the TA” which AE argued should not be “affected in any material way because the TA has to acquire access to third party facilities”. Syncrude stated this was completely contradictory to the draft operating agreement AE had been negotiating with Syncrude which recognized Syncrude’s priority, both in the body of the agreement as well as the Joint Operating Procedure which forms a part of it. Paragraph 2.2 of the Joint Operating Procedure provided as follows:
However, given that AE operations will directly impact bitumen production at the Aurora facility, AE shall not operate breaker 901, 902, 904 in the Muskeg River substation (other than agreed upon protection operated trips) without obtaining clearance from Syncrude. Any changes to relay settings associated with protection of the two overhead lines 201- PTL260-1 & 201-PTL260-2 must not be implemented without prior understanding and agreement between Syncrude Canada Limited and AE Limited.
In its comments of August 24, 2001 Syncrude noted that EAL, in reply, had undertook to provide Syncrude with additional VAR support from the system if that was necessary to accommodate the Albian load. Syncrude also noted that EAL undertook to waive the combined DTS ceiling so that Syncrude would not incur an increased demand ratchet due to the Albian connection. Given these undertakings Syncrude undertook to work with Albian, AE, and EAL to meet the required in-service date for the Albian interconnection.
3.3 Views of Albian Albian, in its comments of August 13, 2001, noted that the Muskeg River Mine, the project to which this application would provide service, was part of the $3.5 billion Athabasca Oil Sands project undertaken by Albian, Chevron Canada limited and Western Oil Sands Ltd. on December 7, 1999. Additional facilities are being built by the following:
i) Corridor Pipeline Ltd., a wholly owned subsidiary of BC Gas Inc., will construct a $600 million pipeline to transport diluted bitumen from the Muskeg River Mine to the Scotford Upgrader and to connect the Upgrader with refinery and pipeline terminals in the Edmonton area.
ii) ATCO Power Canada Limited will build a cogeneration facility at the Muskeg River Mine. The cogeneration plant will provide heat and electricity to meet the needs of the mine and to provide additional electricity for Albertans.
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iii) ATCO Pipelines has built a $37 million natural gas pipeline to transport the natural gas required by the Muskeg River Mine cogeneration plant.
iv) Finally, Shell will invest $400 million to modify its existing Scotford Refinery to utilize the new synthetic crude oils produced by the Scotford Upgrader.
Albian stated that it required back-up power arrangements to offset any reliability or capacity constraints from the turbines. Albian required a high degree of reliability in order to support its operations. It is for this reason that Albian was committing to a long-term contract for DTS with the Transmission Administrator. In addition to the need for a long-term reliable connection to the Alberta system for back-up power supply, Albian requires a high voltage supply for pre-commissioning and commissioning the Muskeg River Mine facilities prior to the start-up of the Cogeneration Facilities. Pre-commissioning of the electrical systems at the Muskeg River Mine starts August 2001.
Albian stated it and its engineering contractors (Muskeg River Contractors or MRC) have consistently planned and depended on having high voltage (260 kV) power for the Muskeg River Mine by August 2001. The overall Muskeg River Mine project plan and schedule was predicated on having the capacity provided by the connection with the 260 kV system in place prior to initiation of pre-commissioning and subsequent commissioning of the Muskeg River Mine systems. Albian stated that once it became apparent that the 260 kV system connection would not be achieved by August 1, 2001, MRC developed a contingency plan of continuing to use the 25 kV system (designing/implementing a back feed system of the 25 kV power through Albian’s line to the river water pump house). This plan could allow pre-commissioning to start without the 260 kV connection being in operation.
The above contingency plan, however, is not sufficient in the late October 2001 time frame, as further power demands are required by the pre-commissioning schedule. By late October, the pre-commissioning involves bumping of major motors, which cannot be accomplished with the 25 kV system. The entire Project’s commissioning and start-up would be delayed if 260 kV power were not available by this phase. The first water pumping systems are planned to be operational in December. This will result in additional power and reliability requirements. Albian claimed that Syncrude’s September outage window was the last available time to connect with the 260 kV system and preserve the Project’s schedule.
In commenting upon reliability Albian noted that ISDs were granted on the understanding that the transmission facilities were subject to being shared with other users. Albian pointed out that in Decision D 99-4 the Board stated:
The Board notes that section 17(2)(e) of the H&EE provides the Board with the authority to direct Imperial “to share and participate or otherwise combine its interest for the transmission or distribution of electric energy with any other owner of a transmission line system”, if it would be in the public interest to do so. The Board also notes that transmission facilities within a designated industrial system are not exempted from section 17 of the H&EEA.
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Therefore, the Board believes there is no need to condition the Industrial System approval to provide access to those facilities by other potential users.15
Albian noted that Syncrude itself has acknowledged, in its letter to the Board of April 9, 1998, that access would be available to its ISD assets. Albian stated that it had advised by the Transmission Administrator that it would not experience an inferior level of reliability as a result of the Transmission Administrator’s determination to use the Syncrude transmission facilities to provide Albian with system access service. Albian supported the Transmission Administrator’s position and did not believe that it would be reasonable to entrench a regime where those customers who rely upon the Transmission Administrator for system access service were subjected to inferior levels of reliability due to a decision on the part of the Transmission Administrator to use the transmission facilities of an ISD to provide such service.
In reply Albian stated that Syncrude’s understanding with respect to the timing of Albian’s power requirements was incorrect. Albian maintained that it had been consistent in its ongoing interfaces with AE and Syncrude technical staff over the past number of months that the bumping of major motors could not be accomplished with the 25 kV system. In March of 2000 Albian requested service of the Transmission Administrator such that it would coincide with its required pre-commissioning activities. Given the delay in gaining service, Albian noted it has had to put a contingency plan in place to initiate its pre-commissioning activities from the 25 kV system in order to preserve Project schedule. The belief is that this can work but it is still with some risk. Energization of the large transformers, for example, should be possible but there was a risk of disturbances outside to the AE 25 kV system that could result in this activity being curtailed. For starting large motors, however, there was no question but that the 25 kV system was inadequate beyond approximately 200 HP at which point voltage depression to unacceptable levels occurred on that system. Albian confirmed that October is when large motors (i.e., motors with a capacity of more than 200 HP) need to be bumped.
Albian noted that halting interconnection to deal with the issues raised by Syncrude would delay a major Alberta energy project. Start-up delay would result in a loss of production of approximately 166,000 barrels of oil per day of delay. At current oil prices this translated to lost revenue of approximately $6 million per day.
Albian commented upon the Co-operation Agreement referred to by Syncrude, denying that the agreement was relevant to either EAL's present application or to any "demand for reliability of service equivalent to Syncrude's." Albian maintained the Cooperation Agreement was a red herring. It was not relevant to the Transmission Administrator’s application. By its very terms, the Cooperation Agreement did not contract out of the EUB’s statutory authority, including the HEE Act.
Albian noted Syncrude’s concerns regarding the loss of its ISD status or that it could be classified as a utility. Albian stated that as it read the record of this proceeding there was no suggestion that Syncrude is or will become a utility. Albian stated that in its view Syncrude’s ISD status was not a subject of the present Application either. The Transmission Administrators applied under section 17 of the HEE Act.
15 Albian submission, August 13, 2001, page 4.
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Albian stated all it asked for is that Syncrude comply with the undertaking it gave on April 9, 1998, that it would allow the system access to the Syncrude facilities and that such an order was "within the jurisdiction and discretion of the Alberta Energy and Utilities Board".
Albian also noted Syncrude’s concerns that the requested connection would affect Syncrude’s reliability requirements. Albian stated that it simply sought system access service from the Transmission Administrator. Albian noted the Transmission Administrator considered that this could be accomplished without undue impact on Syncrude while AE's comments were that the impact on system reliability was acceptable and ongoing reliability of operations should not be of significant concern to the Board.
Finally, Albian was mindful of Syncrude’s call for the Transmission Administrator to expedite the development of the DO5 to Millennium interconnection. Albian submitted that the Board should direct the Transmission Administrator to proceed expeditiously in providing a 260 kV connection between the Syncrude DO5 substation and the Suncor Millennium substation to enhance area transmission capability. Albian stated it would be unfortunate to be in a similar situation next year, where necessary transmission facilities were at risk of not being in place in a timely fashion. Albian also noted that Syncrude identified a specific interest16 in seeing a double 260 kV line from Ruth Lake to the Aurora area. Albian suggested this important transmission- planning element could be addressed as part of the Transmission Administrator's established development planning process. Albian requested that the Transmission Administrator be directed to take all steps to expedite consideration of this transmission development identified by Syncrude.
In comments submitted August 24, 2001 Albian noted that Syncrude, in its reply, raised the possibility that the September shutdown "could make the planned window too tight". Albian stated that it had been advised by AE that the September window can be accomplished. As stated in its reply (Reply paragraph 16) Albian stated it required the 260 kV service in October and requested again that the Board direct that the connection as designed proceed as currently planned in early September.
3.4 Views of AE In its comments of August 13, 2001 AE noted that it was the Transmission Facility Owner (TFO), whose facilities would be interconnected with those of Syncrude, it would be directly affected by the Board's decisions regarding this application. AE recognized that the issues of transmission on unregulated facilities was a new issue before the Board, which would likely gain increasing importance in the future, as more unregulated transmission facilities are constructed in the Province. Therefore, it was important to ensure that an approach was adopted which was fair to all parties, while still respecting the Board's mandate to ensure the efficient, economic and orderly development of the overall transmission system.
AE stated that it had worked extensively with the TA and Syncrude on this matter, and was of the view that adequate protection and system control measures and devises could be installed which would ensure that, from a technical point of view, the impact on system reliability was
16 Syncrude comments paragraph 88.
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acceptable. As such, AE maintained the ongoing reliability of operations should not be of significant concern to the Board.
With respect to the proposed construction outage in particular, AE stated that it had in place a detailed work plan, and a contingency plan – in the unlikely event that the construction outage went beyond the 4 day window currently proposed. Details of these plans could be made available to the Board if it were determined to be necessary. From AE’s standpoint, the technical aspects of this connection were fairly straightforward and no significant difficulties were contemplated.
In reply AE stated that one of the main issues of concern to AE was access to facilities forming part of designated industrial systems by third parties, in order to ensure the orderly, efficient and economic development of the overall transmission system in Alberta. AE noted that in its letter of April 9, 1998 Syncrude itself acknowledged that such use was possible and within the jurisdiction of the Board.
AE stated that while Syncrude was entitled to technical concerns regarding potential impacts on its operations addressed AE was of the view that the subject project could be constructed and operated in a manner which satisfactorily addressed these concerns. In this regard, AE completed, and attached to its reply, a detailed risk assessment wherein it addressed the issues which were likely to arise, provided an assessment of their probability and materiality and outlined proposed courses of action for the management and mitigation of these concerns.
AE noted that Syncrude had raised concerns, at paragraph 30 of argument, with respect to the establishment of islanding logic that did not negatively impact Syncrude's production. AE pointed out that the substation had been designed differently than normal in order to allow the Albian system to be islanded from the Syncrude line under specific conditions. AE understood that the TA was to complete an area islanding study by the time the ATCO Power generation came on-line, which will be used to determine the conditions under which Albian separated from the Syncrude line. In the meantime, AE was using the same conditions as Syncrude itself uses to separate from the AIS to island Albian. In AE's view, these measures should adequately address Syncrude's concern.
AE also wished to correct the record regarding a point made by Syncrude in its submission (see paragraph 25). With regard to the system expansions to serve Syncrude and Suncor, for the first 240 kV line, AE stated that these parties paid the difference between the cost of this line and the cost of 144 kV line, which was all that was needed to interconnect the town of Fort McMurray. These parties also paid a proportional amount of the O&M. Additionally, a second 240 kV line to Fort McMurray (to improve area reliability) was built at no cost to these parties.
3.5 Views of the Board The Board agrees with EAL, and emphasizes, that this Application does not seek access to Syncrude’s facilities for the ongoing operational power requirements of the Albian Project or the 180 MW of STS service that will be required once the ATCO Power co-generation facility is completed.
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Being so limited, the Application does not, for interim purposes in the Board’s view, raise serious technical concerns with respect to reliability, as far as the current 20 MW load requirement of Albian is concerned. The Board accepts the evidence of AE that the interconnection itself is straightforward and is confident that AE, in conjunction with EAL and Syncrude, have developed an appropriate work plan to connect the ATCO facilities to the Syncrude facilities in the available window. The Board is also satisfied that the interconnection can be constructed with minimal risk to Syncrude. The Board also acknowledges the commitment of Syncrude, in their letter of August 24, 2001, to work with the parties in a co- operative manner to facilitate the interconnection.
The Board does acknowledge that the interconnection exposes Syncrude to some additional risk due to force majeure events that may delay the physical connection of the facilities. However, the Board does not consider these to be technical issues. They are addressed later under “Liability”.
There appear to be two immediate technical issues of concern to Syncrude, both of which also appear to have been satisfactorily addressed by EAL.
First, EAL has agreed that Syncrude should be entitled to any necessary additional reactive power (VAR) support from the AIES in order to accommodate the Albian Project load. The Board considers this concession to be appropriate and will condition any interim order to that effect.
Second, EAL is prepared to waive the combined DTS ceiling for the first year until the D05 to Millennium work is completed, thus providing Syncrude with ratchet relief. Again, the Board considers this proposal to be reasonable and will condition any interim order to that effect.
With respect to the connection of the ATCO Power cogeneration facility, scheduled for late 2002, the Board acknowledges EAL’s statement that it will not permit exports to the AIES until the double circuit 240kV line from the DO5 substation to the Suncor Millennium substation is complete. The Board also notes that Syncrude has stated that it will not permit the export of Albian power through its 72 kV system. The Board notes that in its reply Albian shared Syncrude’s concern over the construction of this line, submitting that the Board should direct the TA to proceed expeditiously in providing the necessary 240kv connection. Finally, the Board notes that, in its Connection Order No. U2001-067 to Syncrude17, it stated “Transmission access for the approved 170 MW Muskeg River co-generation power plant is subject to a separate Board Order pending on technical and reliability impact assessment to be completed by the Transmission Administrator.” The Board notes the urgency of this 240 kV construction.
The Board also notes Syncrude’s concerns with respect to exports of power to the AIES from the ATCO Power cogeneration facility and its suggestion that a second 260 kV line be constructed from the DO5 substation to the Aurora mine site. The Board also notes that Albian has termed this proposed line as an important transmission planning element and has suggested that the TA be directed to take all steps necessary to expedite consideration of this development.
17 For the interconnection of Syncrude’s 240 kV line 201-PTL260-1 to ATCO Electric’s double circuit 240 kV line 201-PTL260-1/201-PTL260-2.
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It is not clear to the Board, however, whether EAL considers this second 260 kV line to be necessary. The Board concurs with Syncrude and Albian that this enhancement should be reviewed on a timely basis. The Board also considers that such review should include discussion as to which parties should pay for the enhancement.
Therefore, in light of the foregoing, the Board directs EAL as follows:
a) to provide Syncrude with the necessary additional VAR support from the system to accommodate the Albian load; b) to waive the combined DTS ceiling such that Syncrude will not be liable for increased demand ratchets during the commissioning period; and c) to provide the Board a work plan, within two weeks of this decision, for the review of: a. the need for the 240 kV double circuit line from the DO5 substation to the Suncor Millennium substation. b. the necessity of the second 240 kV circuit from the DO5 substation to the Aurora plant site. The review should include discussions as to which parties should pay for the proposed line.
4 COMPENSATION ISSUES
4.1 Views of EAL In the Application of July 27, 2001, with respect to compensation, EAL proposed that on an interim, refundable basis, adjustable to the date of the Board's order, Syncrude should receive:
i. the annual cost of service set out in Appendix 2, payable in accordance with Article 4 of the proposed Interim T&C; ii. an initial lump sum payment of $572,000 in accordance with Appendix 5.
EAL noted Appendix 3, "Basis of Annual Cost of Service Calculation" and Tables A and B of Appendix 4 "Break-down of Capital" provided further background to the annual compensation in Appendix 2.
EAL stated that the compensation set out in Appendices 2 and 5 was proposed to EAL by Syncrude. EAL believed that an interim compensation order based on the methodology proposed by Syncrude was acceptable in the unique circumstances of this case. EAL maintained that a number of compensation calculations were possible and there was no direct precedent. Given the uncertainty, EAL stated it was not possible to forecast the most likely compensation with any degree of precision. If the final compensation order was for less than the interim order, the difference will be adjusted with interest in accordance with the directions of the Board. EAL and its customers would not be unduly disadvantaged.
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EAL made it clear, however, that it did not agree with the Syncrude approach, noting that the compensation set out in Appendix 2 was determined in accordance with the Jumping Pound Formula for Gas Processing Facilities. EAL stated it considered the Jumping Pound Formula and believed that it would be inappropriate to apply this approach to the Syncrude facilities. EAL's approach to compensation for use of the Syncrude Facilities would include payment to Syncrude for all incremental costs and provide a pro rata return on capital but would not be based on the Jumping Pound approach. EAL stated compensation based on its approach would be approximately $16 million over 40 years or an NPV of $3.8 million at a 15% discount rate over 40 years.
EAL believed that the nature of the compensation set out in Appendix 5 raised issues for this Application and future applications of this nature. EAL did, however, believe that it was appropriate to pay Syncrude these costs on an interim basis until the issues could be fully debated and a final order issued.
Finally, EAL stated that both Syncrude and itself had agreed that in the further proceeding before the Board to determine final compensation, both parties should be permitted to make any and all arguments with respect to compensation regardless of the compensation set on an interim basis as a result of this Application. EAL claimed it was understood between the parties that EAL would pursue a reduction in the interim compensation for which approval was sought in this Application. EAL also acknowledged that Syncrude, in turn, may seek greater compensation than that for which approval was sought in this Application.
4.2 Views of Syncrude In its correspondence of July 27, 2001 Syncrude did not specifically reference the compensation level sought for use of its facilities. EAL noted in its application, however, that the level of compensation proposed is that suggested by Syncrude.
4.3 Views of AE In reply AE stated that it was of the view that compensation issues could be addressed following the timely construction of the necessary facilities and submitted that this matter should not delay the issuance of the necessary orders in order to ensure that Albian received its required service.
4.4 Views of Albian In reply Albian stated that compensation would be determined by the Board in accordance with subsection 17(6) of the HEE Act. Albian maintained this was clearly a matter that could be addressed in a future proceeding, as was indeed contemplated by the statute. Albian also noted Syncrude's position contemplated revisiting compensation issues in the future.18
4.5 Views of the Board The Board notes that the level of compensation proposed on an interim basis was that proposed by Syncrude. The Board also notes that EAL has agreed to accept Syncrude’s proposal on an interim basis, but has reserved the right to argue for a different level of compensation in the
18 Syncrude comments paragraph 50.
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process established to address the final relief sought in the Application. EAL has also pointed out that compensation will be refundable with interest should a final decision on compensation differ from the interim award.
The Board considers the proposed level of compensation to be reasonable in the circumstances. Therefore, the compensation proposed by EAL as Appendix 2 and attached to this Decision as Appendix 1 is approved, on an interim refundable basis, as filed.
5 TERMS AND CONDITIONS ISSUES
5.1 Views of EAL EAL proposed that the T&C set out in Appendix 6 to the Application be adopted on an interim basis pending a final order determining compensation and T&C issues. EAL indicated that these T&C were a condensed version of AE’s TFO T&C, and supported their interim approval for the following reasons:
• Syncrude's incentive to maintain operations on the Syncrude Facilities in order to provide electricity to its own operations is sufficiently significant that EAL believes that the reliance on Good Electric Operating Practice set out in Article 3.1(b) of the interim T&C provides sufficient interim protection to the TA and its customers; and • EAL is currently advancing modifications to the T&C for TFOs for all new transmission facilities procured on a competitive basis. Imposing the existing T&C on Syncrude on an interim or final basis would be inefficient in that modifications would be required once the TFO T&C have been modified.
EAL noted that it had been unable to agree with Syncrude on a liability and indemnity provision either interim or final purposes. EAL proposed that, on an interim basis, Syncrude be indemnified to the same extent as the TA under the EUA and TFOs under their T&C. EAL reasoned that Syncrude and a TFO both own their respective facilities and if the Application was approved, both would be providing use of their facilities to the TA under T&C and for compensation set by the Board. EAL characterized the liability issue as ultimately one of compensation and suggested that it could be resolved on a final basis only after a further proceeding.
5.2 Views of Syncrude Syncrude identified the liability and indemnity issue as one of the most significant issues raised by the Application. Syncrude was especially concerned that it not be exposed to any incremental risk as the result of the interconnection, on either an interim or final basis. In particular, Syncrude took the position that it should be protected from any direct and consequential damages arising from the interconnection, such as a loss of bitumen production resulting from an outage at Aurora or Mildred Lake, regardless of the cause of the outage (i.e. negligence or force majeure). Syncrude noted the EAL’s suggestion that it might not be able to provide this type of indemnity given the provisions of the Liability Protection Regulation. Alternatively, Syncrude suggested
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that Albian, as the beneficiary of the interconnection, could provide an appropriate indemnity to protect Syncrude from any incremental risk.
Syncrude also opposed the proposed indemnity of the TA by Syncrude for third party liability or direct damage resulting from a breach, which Syncrude considered to be inappropriate in the circumstances. To the contrary, Syncrude submitted it should be excluded from all liability and be indemnified for any third party liability it might face as a result of the interconnection.
Syncrude had investigated insurance options to address its liability concerns, but concluded that appropriate insurance coverage could not be placed in the time frame necessary to facilitate the interconnection. Syncrude outlined a number of factors that contributed to the uninsurability of the risk in its August 13 comments. Although Syncrude acknowledged that some or all of these problems may ultimately be resolvable, they could not be resolved in a sufficiently timely way.
Syncrude noted Albian’s position that, since it would be receiving service from the TA under the EUA, it should be treated like any other customer and not be expected to provide an indemnity in order to obtain that service. Syncrude disagreed that Albian was like any other customer of the TA because no other customer of the TA received service through the facilities of an ISD by virtue of an interconnection imposed under HEEA. Since interconnection orders can be conditioned as the Board thinks fit, Syncrude submitted that Albian, the beneficiary of the interconnection, should bear the corresponding liability.
Syncrude also disagreed with AE’s submission that Syncrude should be treated like any other TFO and be subject to the same liability and indemnity provisions. In Syncrude’s view, TFOs generally did not construct transmission facilities for their own consumption. Rather, they are in the utility business of providing service to others. As such, they rarely suffer any consequential loss associated with the outage of their facilities. Syncrude’s transmission facilities were built for the very purpose of operating an oil sands mining, extraction and upgrading project. In the face of the potential risk to Syncrude’s operations, Syncrude was clearly not to be treated just like any other TFO.
Syncrude noted Albian’s proposal, on an interim basis, that Syncrude be held harmless for any risks of the interconnection. In particular, Syncrude noted Albian’s offer to provide a Certificate of Insurance to acknowledge coverage for a claim by Syncrude as a third party where Albian or any of its contractors are deemed legally liable for an insured loss/event related to the project’s pre-commissioning and commissioning activities. Syncrude also agreed with Albian’s suggestion that system customers should bear the risk of the indemnity, which is essential for Syncrude to be held harmless from any risks of the interconnection. Although Syncrude did not object to that suggestion, it expected that the TA would have the option of obtaining a corresponding indemnity from Albian should that be considered more appropriate.
5.3 Views of Albian Albian did not consider that it was reasonable to require a customer seeking system access service from the TA to assume liability beyond the TA’s tariff to achieve service. Albian also submitted that Syncrude’s insistence on complete protection from all risk raised issues with respect to the relationship between ISDs and the AIES, particularly in the context of applications
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pursuant to section 17 of HEEA. Albian submitted that these issues should be resolved in favour of the system customer rather than the ISD approval holder.
Nevertheless, to assist the Board, Albian did assess potential insurance solutions, having regard to its characterization of the three areas of potential risk exposure:
1. A physical loss/event occurring during the planned four-day tie-in construction window that results in a business interruption loss to Syncrude’s operations;
2. An extension of the four-day construction window, which could result from a design error or omission within the control of the TA, a design or physical issue within the control of AE, or a force majeure type of event outside of the control of all parties; and
3. Syncrude’s ongoing exposure to power disruption due to Albian’s ongoing use of the facilities for its own operations.
In light of these three types of exposure, Albian’s assessment of available insurance options suggested that, while some of Syncrude’s exposure could be covered through Albian’s Athabasca Oil Sands Project Wrap Up Liability Insurance Policy (Wrap Up Policy), other aspects of Syncrude’s exposure could not. For example, Albian concluded that the risk of force majeure events could not be covered in this way. For these risks, Albian had concluded that, to be insured, Syncrude would be required to obtain its own coverage, having the only insurable interest.
In the circumstances, given its urgent need for the interconnection to avoid costly start-up delays, Albian proposed the following solutions, which were not mutually exclusive.
First, if fairness required that Syncrude have a greater opportunity to address reliability issues, Albian proposed that the connection order applied for by EAL could nevertheless be granted with the condition that Syncrude be kept harmless from any risks of the connection. However, Albian also proposed that the TA (i.e. system customers) should only assume this risk for the period of time that was reasonable to afford Syncrude an adequate opportunity to address these issues. Albian submitted that the costs of this allocation of risk (in the unlikely event that they arise) could be addressed in the compensation proceeding pursuant to section 17(6) of HEEA.
Second, Albian offered the following insurance solution. Should there be a physical loss/event related to AE’s actions associated with the tie-in for which AE was deemed to be legally liable, AE was covered by the Wrap Up Policy. This would include coverage of loss of use by Syncrude associated with an insured event. Albian noted that this Policy was broad with typical industry exclusions. It would also cover an event in subsequent operation that could be attributed back to the tie-in work. Albian was prepared to provide a Certificate of Insurance, a standard and accepted form of assurance in the industry, to evidence this coverage. Despite its view that, as a customer of the TA, it should not be required to assume greater liability for system access than any other customer, Albian was prepared to offer Syncrude some specific liability relief. This would be in the form of a Certificate of Insurance to acknowledge coverage for a claim by
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Syncrude as a third party where Albian or any of its contractors were deemed legally liable for an insured loss/event related to the Project’s pre-commissioning and commissioning activities. This coverage would be available and offered for the period prior to start-up of the first turbine in the ATCO Power cogeneration facility at the Muskeg River Mine. Further, Albian understood that AE would not require contractual exclusion from liability for consequential damages in respect of the period from the connection to the commissioning of the first turbine. However, it was understood that AE would not be liable to Syncrude during this period beyond the limits and scope of the Wrap Up Policy. For both AE and Albian, this coverage was limited to $100 million per insured event.
Accordingly, to the extent that the Board considered that Syncrude should receive protection beyond the T&C proposed by EAL, Albian submitted that the risk could be allocated within the limits and scope of the Wrap Up Policy. Any additional indemnities and protections that the Board considered should be afforded Syncrude could be provided by the TA for a limited time period. Albian emphasized again that, as a system access customer of the TA, it should not be required to indemnify Syncrude beyond theses proposals, which it offered only in the particular circumstances of this urgent matter.
5.4 Views of AE AE stated that it was supportive of requiring ISDs (which received their designation on the understanding that future use could be made of these facilities as part of the AIES) to make capacity available to third parties in order to ensure the orderly, efficient and economic development of the overall transmission system. Therefore, subject to the establishment of reasonable compensation and the satisfaction of technical concerns, AE considered that EAL should be entitled to access to the Syncrude Facilities. In this regard, AE viewed Albian as simply another customer of the TA even though its access to the system was through the Syncrude Facilities.
As a matter of policy, AE was of the view that no party providing transmission services should be expected to receive or grant indemnities for indirect or consequential damages or third party liability. This was consistent with the approved T&C of AE (as TFO) and the TA, as well as the Liability Protection Regulation. In particular, AE was of the view that the owner of unregulated transmission facilities should have no greater protection afforded to it than that given to the TA and the TFOs under their approved T&C. Therefore, AE supported the Liability and Indemnity Provisions contained in Appendix 6 to EAL's Application.
Nevertheless, in the specific circumstances of this case, AE noted Albian’s insurance proposals. To the extent that AE was covered by the provisions of any such insurance, such that it was fully protected or indemnified against potential claims for indirect or consequential damages, AE had no objection to commercial arrangements being put in place which would afford Syncrude a measure of protection.
5.5 Views of the Board In the Board’s view, having considered the submissions of the parties and the subsequent correspondence of EAL and Syncrude, the only significant issue remaining to be determined for interim purposes is the question of liability.
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The Board emphasizes the uniqueness of the Application. As parties have noted, the Application represents the first time the Board has been asked to deal with the interface between ISDs under HEEA and the TA’s obligation to provide system access service under the EUA. As previously noted, the Application raises a number of significant legal and policy issues arising from that interface. Those questions cannot be resolved without a more comprehensive process involving broader stakeholder input.
The Board notes Syncrude’s position that it should not face any incremental risk as a result of the proposed interconnection. Although AE, as a regulated TFO, takes the position that no TFO, whether regulated or not, should have greater liability protection than any other, the Board does note Albian’s apparent concession that Syncrude should not face any incremental risk, at least at the interim stage.
Albian has gone part of the way in attempting to protect Syncrude from incremental risk. Specifically, Albian has offered a Certificate of Insurance under its Wrap Up Policy. The Certificate would ensure coverage for loss of use of its facilities by Syncrude associated with an insured event, including any actions by AE in effecting the interconnection. The Certificate would also ensure coverage for a claim by Syncrude as a third party where Albian or any of its contractors are liable for an insured loss/event related to the Albian Project’s pre-commissioning and commissioning activities. Albian has offered this coverage up to the start-up of the first turbine in the ATCO Power cogeneration facility.
The Board appreciates this offer by Albian and considers that it significantly reduces Syncrude’s exposure as a result of the Application. The Board considers that a condition of approving the Application on an interim basis should be that Albian provide the Certificate of Insurance as summarized in the preceding paragraph, but more fully described at paragraph 10 of Albian’s Reply dated August 20, 2001.
However, the Board notes Syncrude’s concern that this coverage is limited in at least 3 respects. First, it may be limited to acts of negligence on the part of Albian or its contractors and may not include force majeure events such as inclement weather that may delay the interconnection. Second, it may not fully compensate Syncrude for consequential damages. Third, the coverage limit is $100 million per insured event.
Albian acknowledges that its offer of insurance coverage leaves some residual risk to be accounted for. Albian takes the position that, as a customer of the TA, it should not be required to bear that risk and suggests that it be borne by the TA as a system cost to be passed on to the TA’s customers.
As the parties are well aware, this Application came before the Board on an urgent basis and is presently limited to EAL, Albian, Syncrude and, to some extent, AE. Any proposal to fix the TA’s customers , through system costs, with any risk faced by Syncrude as a result of the interconnection is an issue in respect of which the TA’s customers ought to have input. Those parties, with a clear interest in the issue, are not yet parties to this proceeding. In their absence and input, in the Board’s view, it would not be in the public interest to fix the TA with the residual liability even on an interim basis.
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The Board also acknowledges that there is some question whether the TA can be fixed with this liability (at least to the end of 2001) in light of section 3 of the Liability Protection Regulation.19
The Board notes that in the usual course of events TFOs (usually utilities such as TransAlta or AE) enjoy limited liability to protect themselves against potentially unlimited claims against them by their thousands of customers. Should such protection not be in place, the necessary insurance would be difficult, if not impossible, to obtain. In return, customers receive slightly lower rates and are free to pursue, on an individual basis, methods to protect themselves against potential losses resulting from a loss of service.
The Board considers the circumstances in this case to be somewhat different. It is the TFO, Syncrude, which could potentially suffer a loss as a result of the interconnection. The Board does not consider Syncrude to be in the “transmission business” as such. Syncrude has constructed its transmission facilities primarily to serve its own needs, as an energy producer. While use of its facilities by another party may have been foreseen at the time Syncrude was granted its ISD the Board considers such use to be clearly secondary and collateral to Syncrude’s primary business.
In light of the above, and given the significant issues raised by the Application, the Board does not agree that Syncrude should be exposed to incremental risk because of the proposed interconnection until those broader issues can be fully addressed in a properly convened process involving multi-stakeholder input. That process cannot be conducted in a sufficiently timely way to allow Albian and Syncrude to take advantage of the current window of opportunity to make the interconnection and avoid the potentially significant cost to Albian of start-up delays.
In these circumstances, therefore, the Board considers that, having regard to the risk and the need for the interconnection, it is reasonable and in the public interest for Albian to bear the residual risk on an interim basis. Accordingly, as a condition of granting an interim order directing the interconnection, the Board will require Albian to indemnify and save Syncrude harmless from all direct and consequential damages arising either from Albian’s and AE’s ordinary or gross negligence or willful misconduct, or that of their employees, agents and independent contractors. This indemnity will be required until such time as the Board has rendered a final decision on the Application.
The Board recognizes that fixing Albian, as a customer, with this liability goes beyond the protection ordinarily enjoyed by a transmission facility owner under a Board-approved tariff. However, the Board emphasizes the uniqueness of the circumstances, both substantively and temporally. There is an urgent need for the interconnection in the face of significant outstanding policy issues. The Board is committed to a resolution of the broader issues in as timely a fashion as possible, but considers that fixing Albian with liability is the only solution that is reasonable and in the public interest at this interim stage.
The Board also notes Syncrude’s concern over the proposed indemnity of the TA by Syncrude for third party liability or direct damage resulting from a breach, which Syncrude considered to be inappropriate. The Board notes that Syncrude is not the beneficiary of the interconnection.
19 AR 42/2000.
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Nor would there be any liability if the interconnection did not take place. Therefore, the Board does not consider it reasonable to impose this liability upon Syncrude.
In light of the above findings the Board directs EAL to refile the proposed Terms & Conditions of Service, within two weeks of the issue of this decision, to reflect the above findings.
6 ORDER
Having regard to the evidence and argument presented and the Board’s own knowledge herein, the Board hereby orders, pursuant to section 17(2) of HEEA, that Syncrude shall connect the Syncrude Facilities with the ATCO Facilities as contemplated in Order U2001-067 issued by the Board on March 30, 2001, subject to the following conditions, on an interim refundable basis, pending final disposition of the Application:
1. EAL shall ensure that Syncrude is entitled to any additional VAr support from the AIES necessary to accommodate the Albian load.
2. EAL shall waive the combined DTS ceiling under its current tariff until the D05 to Millennium work is completed, such that Syncrude will not be subject to a ratchet because of the commissioning of the Albian facility.
3. EAL shall compensate Syncrude in accordance with Appendix 1 to this Decision.
4. Albian shall provide a Certificate of Insurance to Syncrude as described in paragraph 10 of its Reply Comments dated August 20, 2001.
5. For the balance of any risk to Syncrude not covered by the Certificate of Insurance, Albian shall indemnify and save Syncrude harmless from all direct and consequential damages arising from Albian’s or AE’s ordinary or gross negligence or willful misconduct, or that of their employees, agents and independent contractors.
In due course, the Board will provide further directions with respect to hearing and considering the Application on a final basis.
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Dated in Calgary, Alberta on August 30, 2001.
ALBERTA ENERGY AND UTILITIES BOARD
(Original signed by)
Thomas McGee Presiding Member
(Original signed by)
Jeffrey Gilmour Acting Member
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ALBERTA ENERGY AND UTILITIES BOARD ESBI ALBERTA LTD.
APPENDIX 1 – ANNUAL COST OF SERVICE
Return On Corporate Royalty & Capi tal Operating Overhead Property Income Total Cost Al bian' s Usage As A COS Payable to Year Depreciation Expense Allocation Taxes Taxes of Service % Of Total Usage SCL* 2001 3,317,412 31 5,794 6 59,886 65,989 40,000 4, 976,118 9,375,198 16% 1 ,472,317 2002 3,083,546 73 1,195 6 37,503 63,750 40,000 4, 625,319 9,181,315 59% 5 ,379,396 2003 2,829,772 67 7,777 5 92,738 59,274 40,000 4, 244,657 8,444,218 83% 7 ,002,522 2004 2,755,216 67 7,777 5 92,738 59,274 40,000 4, 132,824 8,257,829 83% 6 ,847,956 2005 2,680,661 67 7,777 5 92,738 59,274 40,000 4, 020,991 8,071,440 83% 6 ,693,390 2006 2,606,105 67 7,777 5 92,738 59,274 40,000 3, 909,158 7,885,052 89% 7 ,055,046 2007 2,531,550 67 7,777 5 92,738 59,274 40,000 3, 797,325 7,698,663 83% 6 ,384,257 2008 2,456,994 67 7,777 5 92,738 59,274 40,000 3, 685,491 7,512,274 74% 5 ,552,551 2009 2,382,439 67 7,777 5 92,738 59,274 40,000 3, 573,658 7,325,886 74% 5 ,414,785 2010 2,307,883 67 7,777 5 92,738 59,274 40,000 3, 461,825 7,139,497 74% 5 ,277,020 2011 2,233,328 67 7,777 5 92,738 59,274 40,000 3, 349,992 6,953,109 74% 5 ,139,254 2012 2,158,772 67 7,777 5 92,738 59,274 40,000 3, 238,159 6,766,720 74% 5 ,001,489 2013 2,084,217 67 7,777 5 92,738 59,274 40,000 3, 126,326 6,580,331 74% 4 ,863,723 2014 2,009,662 67 7,777 5 92,738 59,274 40,000 3, 014,492 6,393,943 74% 4 ,725,958 2015 1,935,106 67 7,777 5 92,738 59,274 40,000 2, 902,659 6,207,554 74% 4 ,588,192 2016 1,860,551 67 7,777 5 92,738 59,274 40,000 2, 790,826 6,021,165 74% 4 ,450,427 2017 1,785,995 67 7,777 5 92,738 59,274 40,000 2, 678,993 5,834,777 74% 4 ,312,661 2018 1,711,440 67 7,777 5 92,738 59,274 40,000 2, 567,160 5,648,388 74% 4 ,174,896 2019 1,636,884 67 7,777 5 92,738 59,274 40,000 2, 455,326 5,462,000 74% 4 ,037,130 2020 1,562,329 67 7,777 5 92,738 59,274 40,000 2, 343,493 5,275,611 74% 3 ,899,365 2021 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2022 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2023 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2024 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2025 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2026 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2027 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2028 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2029 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516 2030 1,525,051 - 5 92,738 59,274 40,000 2, 287,577 4,504,640 74% 3 ,329,516
Total Over 30 Yrs 187,081,367 135,567,497 NPV10 69,813,733 4 8,058,439 *Works out to $3.40/MWOn Average
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