Alberta’s transmission system upgrade: Was it worth the price?

Alberta’s electricity transmission grid has seen an unprecedented level of investment over the past several years. Billions have been spent building new lines to carry power across the province and construction has just begun on a new $1.5-billion line linking Fort McMurray to the Capital Region.

The lines are the legacy of a decision made by the Ed Stelmach government in 2009, which passed legislation allowing the province itself to determine what lines need to be built, declaring them critical infrastructure and skipping the formal needs-assessment process. A public process remains in place to determine the route of the lines.

At the time, opposition parties and many landowner groups were critical of the decision, and now that the lines are in place, there are questions over the value Albertans have received.

“Without a question, it’s an overbuild,” suggests Trevor Cline, who worked for the Alberta Electric System Operator (AESO) during the planning and implementation of the government’s agenda.

“Of the amount of money that’s been spent on the grid, probably 90 per cent of it is unnecessary.”

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The grid upgrade was designed to allow power generators to gain congestion-free access to transmission lines, the idea being to enable competition in the generation market and lower power prices for consumers.

What Cline believes has been built is a grid that far exceeds the province’s actual need.

“Nowhere else is this done,” Cline said.

“I’ve worked all over the world and I’ve never seen this because it’s not economical.”

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The system operator says these upgrades were needed. Alberta fell behind on transmission investment through the 1990s and into the early 2000s, during a time when power demand essentially doubled in the province.

“This was a bit of a generational build,” said Greg Retzer, the vice-president of operations with AESO.

“We have well set ourselves up for capacity for the next 20 or 30 years.”

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Retzer feels it is unfair to suggest the lines were built simply because of a political decision. Despite the lack of a public needs-assessment process through the Alberta Utilities Commission, the system operator did its homework before moving forward with any of the lines.

“We’re looking at information each and every day and we get that through operating the transmission system,” Retzer said.

“We’re looking at what’s needed today and what’s needed going forward.”

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The upgrades have come with a cost to consumers. For the average Alberta household, the transmission cost on a power bill currently stands at $20.55 per month. That will rise to $22.05 by 2020 and $25.84 by 2025.