TransCanada, ATCO request ‘regulatory certainty’ for proposed Slave River hydro project

TransCanada, ATCO request ‘regulatory certainty’ for proposed Slave River hydro project
TransCanada and ATCO’s proposed “run of the river” hydro project on the Slave River would see 27 sq-km of land south of Fort Smith flooded, including a 1x20 km section of Smith’s Landing reserve land on the west. Three sets of rapids would be flooded.Image: Paul Bannister.

Energy companies TransCanada and ATCO presented plans for a dam on the Slave River to the Alberta government's Standing Committee on Resource Stewardship in late 2012.

Those who think a potential dam on the Slave River is a thing of the past, think again.

Energy companies TransCanada and ATCO presented plans for a dam on the Slave River just south of the Northwest Territories border to the Alberta government’s Standing Committee on Resource Stewardship in late 2012, asking for “regulatory certainty” and loan guarantees from the government to assist with plans for a 1,200 megawatt facility that are already well underway.

“We’ve been looking at the Slave River site since about 2006 with TransCanada,” Doug Tenney, vice president of hydro development for ATCO, told the standing committee at a Nov. 19 meeting.

“ATCO and TransCanada are now looking at a run-of-river facility there. There are four sets of rapids with about a 35-metre drop, so it’s ideally suited for large-scale. There would be minimal flooding. There would be about 64 square-kilometres of reservoir, but that would only result in about 27 square-kilometres of new flooding.”

The proposed flood area covers a portion of Smith’s Landing First Nation reserve land – approximately 1 sq-km over a 20 km section of the river. Smith’s Landing is located within Treaty 8 territory.

As part of the project, the dam would require a significant transmission line to connect it to the southern grid. ATCO’s recently-approved East Arm Transmission Line, running up the eastern corridor of Alberta to just north of Edmonton, was presented last year as a strategic move to engage future dams on the Slave and Athabasca Rivers.

Two potential sites for hydro have been pinpointed for the Athabasca and another on the Peace River in Alberta.

But in order to get to work on the $5 billion Slave project, both ATCO and TransCanada officials said they are looking for “regulatory certainty” from the Alberta government and a “commercial framework” that will allow the 100-year project to be built and financed.

“One of the challenges with hydro is that because it is on a river, it is subject to federal jurisdiction in addition to provincial jurisdiction,” said Alex Pourbaix, president of energy and oil pipelines for TransCanada. “In order for a project like this to go forward, there has to be very comprehensive provincial-federal cooperation along with the developers so that we’re making sure that we’re not repeating the process twice and facing double jeopardy as we go through this process.”

The challenge, Pourbaix said, is the amount of time and money needed to reach the permitting phase and construct the dam – 10 to 12 years in total – which would require a guaranteed market and government loan guarantees to proceed.

“What we’re really highlighting is that to make a $5 billion to $7 billion investment with 10 years of investment before you start getting a return, it would be very, very difficult to make that on a fully merchant basis, hoping to get your return out of the wholesale power market in Alberta,” he said.

“What you really need is off-takers, someone who is buying that power long-term from you, to be able to take that to the bank and get financing for it. The oilsands, in my mind, present a very unique situation in Alberta, where they’re all long-term investments,” Siegfried Kiefer, chief operating officer for ATCO Energy and Utilities, told the committee.

“I think a unique proposal may include having oilsands subscribe or be obligated to subscribe a certain amount of their energy consumption to be purchased from renewable baseload facilities. If you did that, it would allow you to get the contractual backstop into the project without necessarily requiring as much government backstop in the purchase,” Kiefer said.

The other outstanding issue is consultation with Smith’s Landing First Nation and other Aboriginal governments on the project, which remains a “top priority,” according to both companies’ representatives.

Former Smith’s Landing chief Cheyeanne Paulette rejected the company’s requests to enter into a “feasibility study” on the ecological impacts of such a project in 2010, and though both companies are hoping to work on their “relationship” with the First Nation, the new chief is not likely to offer a different perspective.

“Maybe they’re thinking that since leadership has changed at Smith’s Landing, that our viewpoint on hydro development here has changed,” SLFN Chief Andrew Wanderingspirit told The Journal. “It hasn’t. I’m not going to budge. They’ve done this before, and it’s just not going to happen.”

TransCanada and ATCO were among several parties to participate in “stakeholder presentations” on northern Alberta hydro production in late 2012, which included meetings with environmental groups, energy companies and hydro lobbyists.

Members of the standing committee had planned to visit Fort Smith in January 2013, but are now unable due to time constraints.

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