By Joe Anglin
AESO’s mantras that Alberta’s electricity transmission (grid) system’s loses $250 million annually; and that the grid has not been upgraded in over 20-years; or that Alberta is a net importer of electricity completely misrepresent the economic efficiency of Alberta’s transmission system. Yet this is how AESO represents the transmission system. Is this acceptable behaviour of an institution responsible for the public interest?
Stating that the total monetary annual transmission losses are $250 million or that there have been no major transmission upgrades in the last 20-years is completely meaningless without some type of qualification! It is no different than a home owner saying that their monthly heating costs are $200 a month and the steps to the house have not been improved in the last 20-years. What does it mean? Without knowing the size of the area being heated, $200 a month could be extremely efficient or outrageously expensive. Without knowing the quality, condition or material construction of the steps to the house, there is no way of determining if an upgrade is needed.
A transmission system’s quality and efficiency is measured by the percentage of electricity lost, not the summation of the annual loss. Losses cannot be avoided in a transmission system. A normal functioning transmission system loses between 5%-7% of its electricity. Alberta’s transmission system, during the most recent high growth record demand setting years of 2007 -2009, annually lost between 3.5% - 4.0% of its electricity. The fact that a transmission line has a life expectancy of about 80-100 years, stating that there have been no major (there have been many minor) upgrades in 20-years, says nothing about the condition of the system.
So why is the AESO dispatching uninformed talking-heads to public luncheons and former unqualified employees to appear on radio talk shows to regurgitate the mantra that Alberta has a critical need to upgrade the transmission system? This is one of the questions, of which many have gone unanswered for far too long. AESO’s 10-year plan calls for $16.6 billion in transmission upgrades, of which, $12.1 billion is labelled as critical. The current system is only valued at $2.1 billion, and the public has been given no reasonable explanation as to why they should pay for an 800% increase. More importantly, if AESO has identified $12.1 billion of critically needed upgrades, why didn’t, or hasn’t, the AESO follow the law and file the appropriate documents with the Alberta Utilities Commission (AUC)? The law is quite clear in this matter, and the AUC has the jurisdiction and authority to deal with it in a timely manner. After $5.4 billion dollars of upgrades were approved last December, roughly $6.7 billion still remains identified is critical. Yet AESO has not filed the required documents with the AUC. Is this responsible behaviour?
AESO is required to act in the public interest. Why then does the AESO present information to the public that infers that there is a critical need to upgrade the transmission system, and not provide the factual proof of the need? AESO is required by law to exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances. If AESO’s recent management of the reporting of a critical need is an example of how a prudent individual would act under similar circumstances, they would have us believe the appropriate response to report a fire is to write a letter to the Fire Department.
The questions I pose are a direct challenge to the basic integrity and competence of the AESO and its responsibility to act in the public interest. Investing in transmission infrastructure can be a very good investment, but spending outrageously for something that may not be needed is fundamentally irresponsible. AESO’s CEO David Erickson needs to explain why AESO engaged in a multi-million dollar media campaign to convince Albertan that a system upgrade was critically needed, while not spending a cent to present any factual evidence to support this claim.
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