EB-2011-0140 in the MATTER of Sections 70
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EB-2011-0140 IN THE MATTER OF sections 70 and 78 of the Ontario Energy Board Act 1998, S.O. 1998, c. 15 (Schedule B); AND IN THE MATTER OF a Board-initiated proceeding to designate an electricity transmitter to undertake development work for a new electricity transmission line between Northeast and Northwest Ontario: the East-West Tie line. INTERROGATORIES OF RES CANADA TRANSMISSION LP to EWT L.P. January 30, 2013 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 2 of 24 Interrogatory #1 Project Schedules Reference: a. AltaLink: Part B, Section 7 b. EWT: Part B, Exhibit 7 c. CNPI: Part B, Section 7 d. Iccon/TPT: Volume 1, Section 7 e. UCT: Section B, Section 7 f. RES: Exhibit N Preamble: Each applicant has prepared development and construction cost estimates that are dependent, inter alia, upon underpinning project schedule assumptions. Some applicants have assumed aggressive project schedules. For example, both UCT and EWT assume that the leave to construct process – from application to decision – can be completed in less than one year. The generalized phase-by-phase project schedule of each applicant is shown in the table below. The questions below are intended to test the reasonableness of the scheduling assumption and the sensitivity of development and construction cost estimates to changes in the project schedule that underpins each such estimate. Table 1: Project Schedules Questions: a. What evidence can EWT offer that a nine month leave-to-construct phase – from application to decision – is reasonable and achievable? 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 3 of 24 b. Provide an indication of the time required to obtain pre-construction environmental permits, following Ministry of Environment approval of EWT’s Environmental Assessment. c. Indicate whether and, if so, where the time to apply for and obtain pre- construction permits is accounted for in EWT’s project schedule. 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 4 of 24 Interrogatory #2 Mining and Timber Rights Reference: a. AltaLink: no reference to mining or timber rights in its Land Plan (Part B, Section 9) or Costs (Part B, Section 8) b. EWT: Part B, Exhibit 9 c. CNPI: Part B, Section 9, page 141 of 160 d. Iccon/TPT: no reference to mining or timber rights in its Land Plan (Volume 1, Section 9) or Costs (Volume 1, Section 8) e. UCT: Section B, Section 9.2, Figure 29, page 134 f. RES: Exhibit B-1-1, page 12 of 35, lines 17-18, and page 13 of 35, lines 1-5; Exhibit B-3-2; Exhibit E-4-1, page 1 of 11, lines 5-8 and page 4 of 11, lines 15-17; Exhibit K-4-2, pages 12, 14, and 15, and Appendix A, D and E; Exhibit K-5-1, page 1 of 2, lines 17-24 and page 2 of 2, lines 25-47; Exhibit K-6-1; Exhibit L-1-1, page 4 of 4; Exhibit L-3-1, page 2.30 and Appendix C; Exhibit L- 4-1, pages 11-13; Exhibit N-2-3, page 2 of 3; Exhibit N-3-3, page 2 of 7; Exhibit P-5-1, page 11 of 12 Preamble: Although most of the applications refer to mining claims and timber rights on Crown lands as routing issues that will need to be addressed, most are silent as to how such issues will be addressed and at what cost. The cost of obtaining required consents from parties with prior mining and timber rights on Crown lands that comprise part of a proposed transmission right-of-way can be material and significant. Obtaining such consents and/or otherwise dealing with such prior rights and entitlements can take a great deal of time. Questions: a. Indicate where, in its application, EWT provides a list of registered mining claims on Crown lands along EWT’s proposed transmission route(s). b. Indicate where, in its application, EWT describes its plans to accommodate parties with registered mining claims and/or timber rights on Crown Lands that comprise part of its proposed transmission right-of-way(s). c. Indicate where, in its application, EWT has estimated the cost of obtaining the consent and other permissions that would be required from parties who hold registered mining claims and/or timber rights on Crown Lands that comprise part of its proposed transmission right-of-way(s)? 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 5 of 24 d. Are the costs referred to in “c” above, included in: (i) EWT’s development cost estimate; and/or (ii) EWT’s construction cost estimate? e. Indicate in which project phase – development, leave-to-construct or construction – EWT intends to negotiate consent agreements with parties who hold registered mining claims and/or timber rights on Crown lands that comprise part of its proposed transmission right-of-way(s). 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 6 of 24 Interrogatory #3 Land and Contingency Cost Exclusions Reference(s): a. Part B, Exhibit 6, Appendix 6A, Figure 1 and Figure 2 b. Part B, Exhibit 6, Appendix 6D, Figure 1 and Figure 2 c. Part B, Exhibit 8, page 4 of 31, lines 15-16 d. Part B, Exhibit 8, Table 8.1, pages 4-5 of 31 e. Part B, Exhibit 8, page 5 of 31, lines 14-15 f. Part B, Exhibit 8, page 15 of 31 risk tabulation g. Part B, Exhibit 8, page 21 of 31, lines 5-6 h. Part B, Exhibit 8, Table 8.2, pages 22-23 of 31 i. Part B, Exhibit 8, page 23 of 31, line 5 Preamble: EWT indicates that it has included $1.0 million in its development cost budget for “transaction costs for acquiring land rights for the Project excluding expropriation and the cost of land rights themselves”. An estimate of these excluded land costs is not included in its construction budget. In 2010, EWT’s affiliate, Hydro One, estimated “real estate” costs for the Project of $15,127,000, in its construction budget1. EWT has included an estimate of contingency costs of 20 percent in its OM&A budget and stated that “contingency is inherent in any development project”. Questions: a. The total amount budgeted for land costs in EWT’s development and construction cost estimates is $1.0 million: (i) is $1.0M the total amount that EWT expects to expend for land rights for the project; and 1 Hydro One, Project Definition Report, Study Estimates for Options, East-West Tie Expansion, AR 18379, June 4, 2010, page 38 of 43. 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 7 of 24 (ii) if the response to (i) is “no,” what is the total amount EWT expects to expend on land rights for the project in each of the development and construction phases? b. The Power Engineers’ study for the reference design (reference “a”) states that “the cost of ROW purchase and temporary land needs for construction are not included in this estimate”. Indicate where, in its application, EWT provides an estimate of the right of way costs for the reference design. c. There is no estimate of right-of-way costs in the Power Engineers’ study for the proposed alternate CRS design. Indicate where, in its application, EWT provides estimates of the right-of-way costs for the alternate CRS design. d. Although EWT has stated that “contingency is inherent in any development project,” it has not provided an estimate of contingency costs in either its development or its construction budget. Provide estimates of the contingency costs that would be added to EWT’s development budget and to its construction budget. e. To what extent will existing land rights that are currently held by one of EWT’s parent companies (eg., Hydro One) be utilized or shared by EWT? f. If land rights that are held by Hydro One are utilized or shared by EWT, will the existing agreements that govern Hydro One’s existing rights (for example, land use permits issued by the Crown), need to be renegotiated or changed? g. If the response to “e” is “yes,” will EWT reimburse Hydro One in respect of any associated incremental costs? Is this cost included in EWT’s application and, if so, where? 12115001_5|TORDOCS EB-2011-0140 Interrogatories of RES Canada Transmission LP to EWT L.P. Filed: January 30, 2013 Page 8 of 24 Interrogatory #4 Costs of Alternate Routes Reference(s): a. Part B, Exhibit 9, pages 20-36 of 37 b. Part B, Exhibit 9, page 21 of 37, Figure 9.1 c. Part B, Exhibit 9, page 27 of 37, Figure 9.2 d. Part B, Exhibit 9, page 30 of 37, Figure 9.3 Preamble: In its application, EWT considers the reference route and also identifies three alternative route options. The application specifies development and construction cost estimates for the reference route only. Questions: a. Indicate where, in EWT’s application, the length of the East-West Tie line under each of the three alternative route options is specified. b. Confirm (with a “yes” or “no” response) if EWT’s project schedule, land acquisition plan, environmental assessment plan and permitting plan, as these are set out in its application, apply equally to the three alternative route options? c.