Alberta Utilities Commission investigators want probe of ATCO dealings on TMX camps

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'There's no doubt that there were mistakes here': ATCO

 company president

Bob Weber · The Canadian Press · Posted: Dec 01, 2021 

Workers survey around pipe to start of right-of-way construction for the Trans Mountain Expansion Project, in Acheson, Alta., Tuesday, Dec. 3, 2019. (Jason Franson/The Canadian Press)

Investigators at the Alberta Utilities Commission are asking the regulator to look into what they say is illegal behaviour by one of the province's largest and most prominent homegrown companies.

They allege ATCO Electric deliberately overpaid a First Nation in British Columbia by millions for work on a new transmission line in order to secure lucrative contracts providing construction camps for the Trans Mountain Expansion oil pipeline project.

ATCO then tried to pass that overpayment on to Alberta consumers, says a public document from the commission's enforcement branch on its website.

The document also alleges company management was aware the arrangement was questionable and tried to cover its tracks.

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"ATCO Electric has violated (its) fundamental duty of honesty and candour to its regulator — the duty upon which the entire regulatory system relies to function efficiently and effectively," says the document filed Nov. 29.

Company president Melanie Bayley says ATCO — a global $22-billion business based in Calgary, with recognized expertise in electricity transmission and logistics — went astray.

"There's no doubt that there were mistakes here," she told The Canadian Press on Tuesday.

But she said the problem is rooted in an attempt to build capacity among the Simpcw First Nation in Barriere, B.C.

The document says the commission's investigation focused on information provided by a company whistleblower into transactions between the Simpcw and two ATCO subsidiaries. It says ATCO Electric signed a contract with a company controlled by Simpcw for work on a transmission line the company was building into Jasper, Alta., in 2018.

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Investigators say the value of that sole-source, non-bid contract was at least 30 per cent higher than its market value, adding more than $12 million to its cost. That amount was later tacked on to ATCO's request for a raise in the rates it charges consumers,says the document.

Simpcw took the money and subcontracted the work, as the document says ATCO suspected it would.

Commission investigators allege in the document that ATCO Electric issued the overpriced contract because it believed it would be crucial to a deal for another ATCO subsidiary, ATCO Structures and Logistics. That company had signed a joint venture with Simpcw and helps run three camps for the TMX project on Simpcw traditional territory, a contract the document says is worth up to $100 million.

A map of Simpcw traditional territory. (Simpcw First Nation)

"To give effect to the joint venture agreement and secure financial benefits for (ATCO Structures and Logistics) ... ATCO Electric sole-sourced the matting services for the Jasper Interconnection project," the document says.

"ATCO Electric admits that Simpcw 'were threatening to back out of the (Joint Venture Agreement) should ATCO Electric not award the contract to them.' This, in turn, would result in (ATCO) losing camp contracts for the Trans Mountain Pipeline expansion project."

Investigators go on in the document to allege senior ATCO staff knew the contract violated the company's own code of conduct and provincial law, which forbids regulated companies from making large sole-source deals. Investigators allege discussions went all the way up to ATCO Electric's senior levels of management.

Nevertheless, ATCO Electric issued the contract to Simpcw under another process that didn't require competitive bids, the document says. Investigators say that move was explained in an email to senior management not subject to disclosure requirements.

• LISTEN
  Former Trans Mountain engineer says B.C. floods show pipeline expansion is too risky

"This approach was deliberately taken ... on the belief that this strategy would reduce the risk of the complete facts being discoverable by the (Commission) in regulatory proceedings," the document says.

The document says the Simpcw were of the view that the joint venture agreement between ATCO Structures and Logistics obligated all ATCO subsidiaries to offer Simpcw the exclusive right to provide contracts related to electricity transmission and distribution services.

Enforcement staff do not allege that Simpcw or its related entities engaged in any wrongdoing with respect to this matter.

A request for comment from the band's chief and administrator was not returned.

The company said in a news release that the reasons for its "errors are complex, occurred over a five-year period and are not solely attributable to any one person or team."

In the interview, Bayley defended the overpriced contract for the Simpcw as a way to help the First Nation build capacity in a new area of business.

"There was a payment that was higher than market rates, but it's important we understand the context in which businesses like ATCO engage with First Nations contractors," she said.

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However, she characterized the decision to pass that cost onto consumers as one of the company's mistakes.

Bayley said ATCO has completed an internal investigation. And the company has proposed a series of remedies, including removing nearly $11 million from its rate hike request. ATCO is also tightening its First Nations contracting procedures.

All parties need to step carefully as businesses, First Nations and regulators work out how Indigenous communities can take part in economic opportunities on their lands, Bayley said.

"There's a balance that has to be struck here around the obligation of business under reconciliation to support Indigenous communities. That requires going the extra mile.

"But maybe the lesson is around how that obligation finds its way into the rules of regulators."

Commission spokesman Geoff Scotton said the agency will consider what to do with the investigative findings.

"A commission panel will take a look at the application and they will decide what the next steps in the process will be," he said. "They may seek input from other parties."

The investigators are asking ATCO to refund the money it received from rate increases due to the overpriced contract as well as any other penalties. Those penalties can be as high as $1 million per day per offence.

ALBERTA

CRIMINAL CAPITALI$M

Public group wants role in talks over probe into alleged ATCO illegalities

EDMONTON — A group representing residential power consumers wants a seat at any discussions involving alleged illegal behaviour by one of Alberta's main power providers and is asking the regulator to release all information involving ATCO's actions.

Jim Wachowich, lawyer for the Consumers' Coalition of Alberta, said ATCO is trying to "deflect attention" by keeping the matter out of the public.

"This is a watershed event," said Wachowich.

ATCO said it has already disclosed much information and is working with the commission to settle the matter.

In November, the Alberta Utilities Commission's enforcement branch requested a hearing into its findings that ATCO Electric deliberately overpaid a British Columbia First Nation by millions for work on a new transmission line. It allegedly did so to secure lucrative contracts for another ATCO company to provide construction camps for the Trans Mountain Expansion oil pipeline project.

Investigators said the company then allegedly tried to pass the $12-million overpayment on to Alberta consumers, in violation of the law. They alleged company management was aware the arrangement was questionable and tried to cover its tracks.

In materials filed with the commission, the enforcement branch alleges that ATCO "violated (its) fundamental duty of honesty and candour ... the duty upon which the entire regulatory system relies."

ATCO has acknowledged it made mistakes and said the overpriced contract was entered into to help the First Nation build capacity in a new area of business.

In an Oct. 29 letter to the commission's enforcement branch, company president Melanie Bayley said there was an offer of a $16-million settlement.

The letter and other documents recently obtained by The Canadian Press show that investigators and ATCO representatives agreed to meetings beginning this week, before the commission holds any formal hearings.

"Both parties would like an opportunity to pursue discussions to determine whether, or to what extent, it might be possible to resolve any aspects of the case," said a letter from a lawyer for the enforcement branch to the commission.

Any proposed settlement would have to be approved by the commission.

But Wachowich argues the public must be represented at any talks involving a regulated utility.

"Granting us standing would indicate the broader public interest is being considered — we're not just considering one side of the equation," he said.

As well, his group is asking for all information collected by the enforcement branch and ATCO to be made public. That includes the results of an internal company probe.

"The biggest document is the one we don't have," he said.

Bayley said in an email that it's normal for the commission's enforcement arm to work with a company on a settlement.

"It's typical for administrative penalty matters to be handled by a utility and the (commission) with no customer or intervener involvement, since only the utility is impacted," Bayley wrote.

Bayley said a number of ATCO documents are already public. She said the company plans to release the internal investigation at some point, with commercial and personal details redacted.

"Again, this is normal in regulatory hearings and is granted by the commission all the time," she wrote.

However, ATCO has also argued some information already made public should be removed from the record.

"AUC enforcement has disclosed certain commercial arrangements between unregulated entities that are not subject to the AUC’s jurisdiction and has done so without their permission and in conflict with the express confidentiality provisions of these agreements," said a letter from the company's lawyers.

In anotherletter to the commission, ATCO chairwoman Nancy Southern said the overpriced contract wasissued out of an "entrenched and important" respect for Indigenous communities.

"This had an important impact on the decisions made," she wrote.

The documents filed by the enforcement branch alleged the First Nation took ATCO's cheque and subcontracted the work to another company at a lower price. The same documents alleged ATCO managers knew that would likely happen.

"At that point, you're not trying to build capacity, you're trying to curry favour," said Wachowich.

Wachowich said the seriousness of ATCO's alleged breach warrants public participation.

"They breached a very important standard."

Utilities commission spokesman Geoff Scotton said there are no mandated timelines for resolving the issue.

The investigators have asked the commission to force ATCO to refund the money it received from rate increases due to the overpriced contract as well as impose administrative penalties. Those penalties can be as high as $1 million per day per offence.

This report by The Canadian Press was first published Jan. 11, 2022.

— Follow Bob Weber on Twitter at @row1960

Bob Weber, The Canadian Press

ATCO plans two Calgary solar farms in bid to give customers 'decarbonization' options for electricity

Author of the article: Brodie Thomas
Publishing date: Sep 29, 2021 •

An artist's rendition of the ATCO Group's Deerfoot solar project to be built at the corner of 114 Avenue and 52 Street SE in Calgary. 

PHOTO BY CNW GROUP/ATCO LTD

The ATCO Group announced plans Wednesday to build two solar installations in Calgary with the capacity to power more than 18,000 homes.

The solar farms, to be built in the city’s southeast, will be as large as about 170 football fields. They will contain 175,000 bifacial solar panels and will offset 68,000 tonnes of carbon a year.

Karen Nielsen, senior vice-president of North American renewables for ATCO, said each panel will collect energy from both sides — with one pointed toward the sun and the opposite side collecting ambient light.

“When land and our footprint is so important, we’re trying to extract as much generation as we can out of that land,” said Nielsen.

The Deerfoot project, at 114th Avenue and 52nd Street S.E., will produce 37 megawatts and is currently in the permitting phase. The Barlow project, at Barlow Trail and 114 Avenue S.E., will produce 27 megawatts and has already received permit approval.

t

An artist’s rendition of the ATCO Group’s Barlow solar project to be built at the corner of Barlow Trail and 114 Avenue SE in Calgary. PHOTO BY CNW GROUP/ATCO LTD

ATCO hopes to begin construction on both early next year, and have them up and running by the fourth quarter of next year.

Nielsen said the two locations are former industrial sites that have limited use for other construction.

“They were at the time part of a fertilizer plant,” said Nielsen. “So we’re taking land that is really limited in terms of its usefulness for construction and we’re turning it into something that’s very useful.”

ATCO is working on design optimization to ensure the placement of panels is as efficient as possible. Nielsen said once that’s complete, the company will place orders for the panels. She’s hopeful supply chains that have been disrupted at times by the global pandemic will co-operate.

This is not ATCO’s first foray into renewable energy. The company recently acquired a solar project near Empress in eastern Alberta, and has completed two solar projects in Canada’s North. It has what it calls a “growing renewable portfolio” in Canada, Mexico, Chile and Australia.

“The acquisition of three major solar projects shows how important we believe it is to provide customers with the opportunity to decarbonize their energy consumption,” said Bob Myles, executive vice-president of corporate development at ATCO.

“Whether it’s the far North or an urban centre, ATCO is delivering on our strategy to help communities accelerate their transition to clean energy in a safe, affordable and reliable manner. These solar projects are also prime examples of the kinds of opportunities we’ll continue to pursue as we grow our renewables portfolio.”

Nielsen said this will be a unique project because many solar and wind energy installations are in rural areas, while this one will be highly visible from major roads in the city.

She said ATCO is committed to energy sustainability, and bringing that to consumers.

“We know intuitively our friends and neighbours want to live more sustainably. We see our goal as providing them with the solutions so they can make the choices to live the way they want.”

CRIMINAL CAPITALI$M
Alberta Utilities Commission approves $31M ATCO fine, says in public interest


© Provided by The Canadian Press

CALGARY — The Alberta Utilities Commission has approved a $31-million fine proposed for ATCO Electric's attempts to overcharge ratepayers for costs it shouldn't have incurred.

In April, ATCO Electric agreed to pay the penalty after a commission investigation found it deliberately overpaid a First Nation group for work on a new transmission line.

It said ATCO also failed to disclose the reasons for the overpayment when it applied to be reimbursed by ratepayers for the extra cost.

But in May, the Consumers' Coalition of Alberta said the proposed settlement doesn't adequately compensate people in the province for the harm they have suffered.

The commission says in its ruling that after carefully considering the settlement agreement, it is satisfied that accepting it is consistent with the public interest.


Related video: Energy Revenue Pushes Alberta Budget Into The Black

The commission also says the agreement would not bring the administration of justice into disrepute.

"The commission considers that the settlement is fit and reasonable, falling within a range of reasonable outcomes given the circumstances," reads the ruling released Wednesday.

The settlement came after an investigation into a complaint that ATCO Electric sole-sourced a contract in 2018 for work needed for a transmission line to Jasper, Alta.

The agreement says that was partly because another of Calgary-based ATCO's subsidiaries had a deal with a First Nation for projects, including for work camps on the Trans Mountain Pipeline expansion.

The statement of facts says ATCO Electric feared that if it didn't grant the Jasper contract to the First Nation, it might back out of its deal with ATCO Structures and Logistics. It's illegal for a regulated utility to benefit a non-regulated company in this way.

This report by The Canadian Press was first published June 29, 2022.

The Canadian Press

Exclusive-Canada's ATCO Gives Mexico Troubled Pipeline After Damage Award -sources

By Dave Graham
03/30/23

Canada's Prime Minister Justin Trudeau and Mexican President Andres Manuel Lopez Obrador greet as they attend an official welcoming ceremony during the North American Leader's Summit at National Palace in Mexico City, Mexico January 11, 2023. REUTERS

Canada's ATCO Ltd has agreed to transfer ownership to Mexico of an unfinished pipeline bogged down in a dispute with the Mexican state power company, two officials told Reuters, marking a rare breakthrough in ongoing tensions over energy.

Reuters in October reported that Mexican power utility Comision Federal de Electricidad (CFE) in 2021 had to pay ATCO about $100 million in damages, interest and legal fees over the Ramal Tula natural gas pipeline in the central state of Hidalgo.

The deal to hand over the pipeline will free ATCO from attendant liabilities and gives Mexican President Andres Manuel Lopez Obrador the chance to finish the stalled project which was designed to supply natural gas to a power station north of Mexico City, the sources said.

Three people familiar with the matter said agreement to hand over the project was reached after Lopez Obrador met in January with Canadian Prime Minister Justin Trudeau, who used their talks to raise Canadian energy firms' concerns in Mexico.

Lopez Obrador afterward met representatives from Canadian energy companies, including ATCO, and details of the transfer were concluded in late February, one of the sources said. No fee was involved in the transfer, two of the sources said.

The mutually beneficial agreement contrasts with unresolved dispute settlement talks centering on Lopez Obrador's energy policies that have pitted the U.S. and Canada against Mexico.

Neither ATCO, CFE, the Canadian government or Lopez Obrador's office immediately replied to requests for comment.

Arguing that past governments skewed Mexico's energy market in favor of private capital, Lopez Obrador has taken a series of steps to bolster state control of the sector.

However, U.S. and Canadian companies argue his measures put them at a disadvantage, and are in breach of a North American trade deal. Last July the U.S. and Canadian governments launched formal dispute resolution talks with Mexico over energy.

ATCO went to arbitration because after Lopez Obrador took power in 2018, CFE canceled a contract the Calgary-based company made with the last administration to build the pipeline, on the grounds that the work was incomplete, Reuters reported.

By then, ATCO had already finished most of the 17 kilometer (11 mile) pipeline. But the company said it could not complete the final stretch due to resistance by local communities, and therefore invoked force majeure.

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The company argued Mexico had not done enough to enable the pipeline's completion, and the London Court of International Arbitration agreed, Reuters reported. Mexico paid up in December 2021, according to people familiar with the matter.

Mexico's prior government initially valued the Ramal Tula project at $66 million when the contract was awarded in 2014.

Atco to use organic waste to produce 'renewable natural gas'

CALGARY — Atco Energy Solutions has announced the construction of a new facility that will use the byproducts from organic waste to produce "renewable" natural gas.

© Provided by The Canadian Press

The facility, a first for the Calgary-based company, will be built north of Vegreville, Alta. and should be up and running by late 2022. It will process agricultural manure and other organic waste products from nearby municipalities, harvesting the methane emissions that would otherwise be released into the atmosphere.

The facility will also produce fertilizer as a byproduct, to be used by local farmers. Vegreville-based biofuels company Future Fuel Ltd. will partner with Atco to develop the project.

Mike Shaw, senior vice-president for Atco Energy Solutions, said the facility will be one of the largest renewable natural gas facilities in Canada once completed. He said it will produce enough natural gas to heat 2,500 homes per year and reduce carbon emissions by 20,000 tonnes annually.

"One tonne of methane emissions is equivalent to about 28 tonnes of C02 emissions on a greenhouse gas equivalency perspective," Shaw said. "Fugitive methane emissions from things like wastewater treatment, or from organic decomposition — those are significant contributors to greenhouse gases."

While the Vegreville facility will be Atco's first renewable fuels project, Shaw said it is in the process of developing others in order to help meet its climate change and sustainability targets. Renewable natural gas can be produced from a variety of feedstocks, including residential and commercial organics, waste from water treatment plants, and landfill waste. It can be injected into the existing natural gas grid just like conventional natural gas.

Video: Energy waste in condos (Global News)

With its history of gas handling and upgrading, Atco is uniquely suited to move into the renewable natural gas space, Shaw said.He said Canada produces six petajoules (PJ) per year of renewable natural gas currently — less than one per cent of the country's overall natural gas usage — but has the potential to generate up to 150 PJ per year, according to industry estimates.

"There's only a couple dozen of these facilities across Canada today, but we do expect to see significant growth in this space," Shaw said.

In addition to renewable natural gas, Atco is investing in hydrogen as part of its overall climate change strategy. The company is partnering with Suncor Energy Inc. on a potential hydrogen project to be built near Fort Saskatchewan, Alta.

That project could produce more than 300,000 tonnes per year of hydrogen and reduce Alberta's carbon emissions by more than two million tonnes per year, Atco said. The project is still in the early design stage.

This report by The Canadian Press was first published July 9, 2021.

Companies in this story: (TSX:ACO.X, TSX:SU)

Amanda Stephenson, The Canadian Press

Exclusive-Mexico's CFE ordered to pay Canada firm $85 million in arbitration case


The logo of Mexico's state-run electric utility known as the CFE, is pictured at its building office in Monterrey

Mon, October 3, 2022 
By Dave Graham and Stefanie Eschenbacher

MEXICO CITY (Reuters) - Mexican state power utility Comision Federal de Electricidad (CFE) last year lost an international arbitration case to Canadian firm ATCO Ltd , and had to pay redress of about $85 million, according to three people familiar with the matter.

Though the case relates to a pipeline contracted by the previous Mexican government, it offers an indication of the sort of dispute compensation the current administration could have to pay over its contentious moves to tighten state control of the energy market.

The London Court of International Arbitration made the award on the Ramal Tula pipeline to ATCO in October 2021, the sources said. Once legal fees and interest were added, the sum came to around $100 million, which CFE paid ATCO in December, they added.

ATCO could not comment because its contractual dealings with CFE are confidential, a spokesperson said, adding the Canadian firm remained committed to pursuing efficient, lower-emission energy solutions in Mexico. The court declined to comment and CFE did not reply to requests for comment.

ATCO pursued arbitration because after President Andres Manuel Lopez Obrador took power in 2018, CFE canceled a contract the last administration agreed with the Canadian firm to build a natural gas pipeline near the central city of Tula on the grounds that the work was incomplete, the sources said.

ATCO had already built most of the 17 kilometer (11 mile) pipeline due to supply a power station. But the firm said it could not finish the final stretch due to resistance by local communities, and therefore invoked force majeure.

The Canadian company argued Mexico had not done enough to enable the pipeline's completion, and the court agreed, the sources said. Mexico had initially estimated the project was worth $66 million when it was awarded in 2014.

Lopez Obrador has overhauled legislation to bolster the position of CFE and state oil company Petroleos Mexicanos (Pemex) at the expense of independent operators, arguing that past governments skewed the market in favor of private capital.

Still, in July, the U.S. Trade Representative requested dispute settlement talks with Mexico over billions of dollars in energy investments, arguing Lopez Obrador's policies violated the United States-Mexico-Canada (USMCA) trade agreement.

Canada quickly joined the U.S. complaint, which officials are working to resolve.

CFE said in its 2021 annual report it was facing 21 cases of international arbitration, and had significantly raised its reserves for litigation and lawsuits.

There have, however, been signs that Mexico is finding ways to get past some disputes.

In August, Canadian firm TC Energy said it had sealed a deal with CFE to build a $4.5 billion pipeline in southeast Mexico.

In the announcement, TC Energy said the two sides had agreed to "mutually terminate" international arbitration relating to other pipelines the Canadian firm was building in Mexico.

(Reporting by Dave Graham and Stefanie Eschenbacher; Additional reporting by Nia Williams in Calgary; Editing by Josie Kao)

 

ATCO subsidiary to build new Alta. pipeline to supply gas to petrochemical project

The Canadian Press

Atco

Canadian Utilities Ltd., a subsidiary of Calgary-based holding company ATCO Ltd., plans to build a new, $2-billion natural gas pipeline in Alberta that will supply a massive net-zero petrochemical project being built northeast of Edmonton. 

The project will be the largest-ever energy infrastructure project by an ATCO Energy Systems company, said chief operating officer Wayne Stensby in an interview.

Stensby said the pipeline will supply natural gas to Dow Chemical's $9-billion Path2Zero facility, which is being built near Fort Saskatchewan, Alta. and is billed as the world’s first net-zero-emissions integrated ethylene cracker and derivatives site.

The Dow project was given the go ahead last November and involves an expansion and retrofit of Dow’s existing manufacturing site in Fort Saskatchewan. The project will include the building of a new hydrogen-fueled ethylene cracker, as well as carbon capture and off-site sequestration.

But Dow won't be the only user of the new natural gas pipeline, Stensby said. He said Canadian Utilities has identified more than $20 billion of proposed industrial expansion projects and emissions-reduction projects by its customers in Alberta.

"We shouldn't be understating the significance of those investments, whether it be Dow or whether we're talking about hydrogen, building materials, or petrochemical investments," Stensby said.

"Very large companies are making very large investments as they look to lower the carbon footprint of their manufacturing processes and manufacturing businesses."

Stensby added economic growth is also a key driver of natural gas demand in Alberta.

"And some of this gas will eventually find its way to residential homeowners, because we're also seeing increased levels of population growth — really record growth — across our province."

The new pipeline, called Yellowhead Mainline, will be around 200 kilometres long and will run from the hamlet of Peers in west-central Alberta to the northeast Edmonton area.

It is expected to have the capacity to deliver one billion cubic feet per day of natural gas.

Construction on the new pipeline is expected to begin in 2026, Canadian Utilities said, and it should be operational in the fourth quarter of 2027.

This report by The Canadian Press was first published May 8, 2024.

KLEIN DEREGULATION DOOMS US

Alberta needs a greener grid but access fees could swamp us if we don't fix the system

Kristen van de Biezenbos - 


There's no escaping it. Calgary's commitment to net zero is going to require more electrical infrastructure — more high-voltage transmission lines and better connections throughout neighbourhoods.

So if you think the add-on fees on your utility are high now, just wait.

Access fees for the provincial grid and local power lines doubled in the past 10 years and now make up, on average, half of a residential bill.

Those costs will keep growing, in part, because of the need to decarbonize. But also because here, in Alberta, the electricity market system is vulnerable to overcharging by utilities. Those inflated costs are passed on to ratepayers.

And if that's not dealt with now, the cost of achieving net zero could be much more painful.

But first, let's look at how we got here.

Alberta's power market is unique in Canada but is similar to "unbundled" competitive markets in other parts of the world, including the U.S. and Europe.

Starting in the 1990s, Alberta unbundled or split the former electricity monopolies into the component parts of the power system — electricity generation, or power plants; transmission, or high-voltage power lines; distribution lines and poles in the cities connecting power to homes and businesses; and retail, or billing services.

The intention behind this was to create competitive markets for generation and retail services and to use regulation to keep transmission and distribution rates fair for both utilities and customers. But the pressure to expand and overbuild is baked right into the system.


© David Bajer/CBCAn aerial view of power lines in Edmonton in April 2022.


Transmission and distribution are still owned by companies with monopolies in different areas of the province, and so, to prevent them from engaging in monopoly behaviour, their rates are reviewed and approved by the Alberta Utilities Commission.

The commission is supposed to allow companies to charge back only the capital projects and other assets the system really needs.

But companies face pressure from their shareholders to get higher rates, and the simplest way for a company to push rates up is to add more infrastructure because the value of a monopoly's assets is the backbone of its rate — it earns a profit based on what it owns.

Relying on a whistleblower

Plus, as the recent overcharging scandal involving an ATCO transmission line to Jasper shows, transmission companies can deliberately inflate costs. In the ATCO case, it granted a single-source contract to a subcontractor, knowing the company was overcharging by 30 per cent, because this contract was part of a promise to secure lucrative work for one of ATCO's affiliates.

That 30 per cent overcharge would have been passed on to ratepayers had a whistleblower inside ATCO's own accounting department not alerted the commission before the costs could be added.

How many other deals or examples of fudging of numbers slip through because no one risks their career standing up to say stop?

The incentives to overbuild and overcharge are a problem that needs to be addressed now, because more lines will almost certainly have to be built over the next decade. Both wind and solar require considerable space, so new farms tend to be built in rural areas where transmission infrastructure is absent. New lines will be needed to connect the facilities.

Estimates vary, but transmission lines can cost up to $3 million per kilometre. That adds up, and you will see the cost on your bill in the fees.

A deeper need for change

Alberta will require significant distribution upgrades within cities, too, to handle more rooftop solar and other demand-side generation, to accommodate increased power draws from electric heating systems, major appliances, heating and cooling (especially with extreme weather on the rise) and electric vehicles without causing rolling blackouts and brownouts.

The province needs more wind and solar power and a better, smarter transmission and distribution system. But these things will likely involve high upfront costs, and too many Albertans are already buckling under the weight of existing bills, especially when it comes on top of inflation. We see that in the number of families seeking emergency help or having their power limited.

We need a plan for how to manage those costs, and we need it soon. This could mean revisiting the rate formulas for transmission/distribution and scaling back retail fees, or it could mean asking for federal funding and help from the Canada Infrastructure Bank to finance future upgrades.

Whatever the solution, Calgary's commitment to net zero means waiting to act will only let the bills continue to climb while ratepayers' pain deepens.

Suncor Energy and Atco working together on potential hydrogen project


Suncor Energy and Atco Ltd. are working together on a potential hydrogen project near Fort Saskatchewan, Alta., that would help reduce the province's carbon dioxide emissions

.

© Provided by The Canadian Press

The companies say the project would produce more than 300,000 tonnes per year of hydrogen.

Suncor would build and operate the hydrogen production and carbon dioxide sequestration facilities and Atco would construct and operate associated pipeline and hydrogen storage facilities.

They expected 85 per cent of the gas would be used to supply existing energy demand including in refining processes and cogeneration of steam and electricity at the Suncor Edmonton Refinery, reducing refinery emissions.

In addition, the gas could be used in the Alberta natural gas distribution system, also reducing emissions.

They say the facility would be located at Atco's Heartland Energy Centre near Fort Saskatchewan and could be operational as early as 2028. A sanctioning decision is expected in 2024.

This report by The Canadian Press was first published May 11, 2021.

Companies in this story: (TSX:SU, TSX:ACO.X)

CANADA

Hauling freight trains with electric locomotives is now starting to happen

Emily Chung

 Yesterday 
cbc.ca

Canada's railway giants, CN and CP, are testing battery and hydrogen locomotives in a move toward electric, zero-emissions freight rail. At least one smaller railway, Southern Railway of B.C., is working on hydrogen locomotive technology too. Here's a look at why they're electrifying and the technologies they're testing.

Though the transportation sector is the second-biggest source of greenhouse gas emissions after oil and gas, the Railway Association of Canada says rail generates only 3.5 per cent of transportation emissions.

Still, said Josipa Petrunic, president and CEO of the Canadian Urban Transit Research and Innovation Consortium, given Canada's ambitious greenhouse gas emissions targets, even those need to be eliminated. Rail companies are now facing pressure from both governments and shareholders to reduce emissions, she said, especially now that the price on carbon is expected to ratchet up over time — and, with it, the price of diesel that powers Canadian trains.

"They know they've got to cut this cost before it starts hitting their bottom line," said Petrunic, who co-authored a 2020 report on rail innovation in Canada.

Gord Lovegrove, associate professor of civil engineering at the University of British Columbia Okanagan, agreed that there is increased shareholder pressure on railways to address climate change.

"And that's why [electrification] is happening in advance of any federal regulation," he said.

But he noted that diesel-burning trains also generate a lot of other pollutants that are bad for human health. These include nitrogen oxides, fine particulate matter, as well as sulphur dioxide linked to acid rain.


© Mark Blinch/ReutersTrains are seen in the yard at the at the CN Rail Brampton Intermodal Terminal in Ontario 2019. Electrification has been touted as a solution to the noise and pollution from train yards in urban areas.

In urban areas, these pollutants and the noise generated by locomotives can be a huge nuisance near switching yards, which is where rail cars are stored, loaded, unloaded and hitched together. The small switcher locomotives that move cars around in those rail yards represent just a fraction of Canada's locomotive fleet, Lovegrove said, but can generate double or triple the emissions of a long-haul locomotive engine.

The B.C. government has started to charge fines for older, more polluting locomotives, he said. But it has promised to return the last three years of fines back to Southern Railway of B.C., if it retrofits its locomotives to include zero-emission technology.

"So not only are they realizing reduced fuel costs, reduced public complaints [but] they're getting money back to fund their business case," Lovegrove said.

In the longer term, given climate and pollution concerns, he said, rail companies need to electrify "because diesel is going to be regulated out of existence."

CN Rail, headquartered in Montreal, announced in November that it had purchased a Wabtec FLXdrive battery-electric heavy-haul freight locomotive. The company has set a target of reducing its greenhouse gas emission intensity by 29 per cent by 2030 compared to 2015 — and achieving net zero by 2050.

Janet Drysdale, CN Rail's vice-president of sustainability, said 85 per cent of the company's emissions are produced by its diesel-powered locomotives.

"So solving this locomotive issue is really critical for us."

The plan is to test it on a small, isolated piece of track near Wabtec's headquarters in Erie, Penn. The company has received funding from that state for the pilot.

This particular locomotive was tested in California in 2021. But Drysdale said because CN operates in Canada, one of the things that needs to be tested is how the battery is affected by cold.

Battery-electric locomotives have been tested in train yards, but the CN/Wabtec pilot will also do tests pulling freight on the main line.

CN said the electric locomotive, which will operate along with up to six other locomotives, could reduce emissions by up to 30 per cent on routes where the topography allows it to partially recharge the battery with regenerative braking. Regenerative braking recovers some of the energy used to slow down the vehicle and turns it into electricity.

In the future, Gina Trombley, executive vice-president and chief commercial officer for Wabtec, said the companies expect most of the recharging to happen via overhead catenary wires and pantographs, similar to those used by streetcars, during low-speed loading at locations such as grain terminals.

"In order to fully operationalize fully electric locomotives, you're going to have to find a way to charge on the move," she added.

Trombley said the CN project is still at the design stage, but the two companies think they'll have the locomotive running in the second half of 2023.

Calgary-based Canadian Pacific announced in December 2020 that it planned to develop North America's first hydrogen-powered line-haul freight locomotive. Nearly a year later, it said it was expanding the program from one to three locomotives after receiving a $15-million grant from the Alberta government. The fuel cells for the first locomotive were delivered by Vancouver-based Ballard Power Systems in January. Structures and logistics company ATCO Group announced this week that it had reached a deal to build two hydrogen production and refuelling stations, one in each of CP's rail yards in Calgary and Edmonton.

CP declined to be interviewed for this article, but in an interview on Ballard's website posted in September, Kyle Mulligan, chief engineer at CP, said initial trials are expected to run between Calgary and Lethbridge.

Kate Charlton, vice-president of investor relations at Ballard, said the company's fuel cells are already running passenger trams in China and being tested for passenger rail with Siemens in Germany. But ones required to haul freight are roughly double the size.

However, she said the fuel cells are similar in size to the diesel engine currently used to power the train's electric powertrain.

"So they basically pull the diesel engine out and replace it with a fuel cell," Charlton said.

She added that fuelling times should be similar.

Mulligan told Ballard that CP plans to roll out hydrogen fuelling infrastructure "coinciding with our existing diesel fuelling operation locations."

Charlton, who works closely with CP, said the company expects the hydrogen locomotives to be running in 2023.

Meanwhile, New Westminster-based Southern Railway of B.C., a short line railway, announced last year that it was converting one of its switcher locomotives from diesel-electric to hydrogen-electric, in partnership with fuel cell maker Loop Energy and hydrogen storage firm Hydrogen in Motion. The locomotive has been dubbed the "Green Goat." Lovegrove and his group are involved in the research and development for that project.

Lovegrove said the fuel cells and batteries are coming this summer and fall, and the system will be tested over the next year or two.

There are operational reasons why CP and CN think their projects make sense. For example, CN says it has an ideal testing ground near Wabtec's headquarters in Pennsylvania, and that state is providing some financial support.

CP's Mulligan said that the company chose hydrogen because "battery electric requires recharging that can take time that — from our current operation, which is diesel powered — we don't necessarily have a provision for," according to the Ballard interview.

However, it can roll out hydrogen fuelling at its Ogden solar farm, and there are natural gas refineries in the Edmonton area that can produce hydrogen.

Drysdale said there are only a small group of railways and suppliers in the industry. "So what we want to avoid is us all testing the same things, right?"

Across North America, different rail companies are testing different technologies for different applications and in different local conditions.

"All of this work ultimately is going to benefit all of us," Drysdale said.

Lovegrove said batteries "will be a constant throughout" — whether they're charged by hydrogen fuel cells or some other method.

However, he thinks hydrogen will be a key technology when hauling heavy loads over long distances.

Petrunic said she expects there to be a mix of battery-electric and hydrogen-electric locomotives.

"There's going to be those switch yard locomotives and several regional rail routes that may make sense mostly with battery alone," she said, "and then others where hydrogen is going to have to be the solution because [of] not only the range, but the availability of fuel."

She called both CN's and CP's projects "baby steps in the right direction."

"But," she added, "these baby steps are going to basically end there unless there is a very significant effort to build out both the electrical capacity across the country for this, as well as the hydrogen supply chain."

NAT GAS BLUE H2

ATCO to deliver on hydrogen production and refuelling facilities for CP locomotive program

Canadian Pacific Railway’s Hydrogen Locomotive Program is about to get a power boost.


© Provided by Calgary HeraldATCO Group has plans to build two new Hydrogen production and fuelling stations in Alberta for Canadian pacific Railway.

Josh Aldrich  

Yesterday 
Calgary Herald

ATCO Group announced Wednesday an agreement with the railway to build two hydrogen production and refuelling facilities in Alberta — one each in Edmonton and Calgary.

The project will not produce any carbon emissions from either the locomotive or at the point of production.

“We don’t talk about CO2 reduction because there is no CO2,” Bob Myles, executive vice-president for corporate development for ATCO, said in an interview with Postmedia.

CP began its Hydrogen Locomotive Program in December in an effort to lower its carbon footprint, using hydrogen fuel in place of diesel. The company currently has one locomotive running on hydrogen with another two in the works.

CP chief financial officer Nadeem Velani said at an investor conference in March that the Calgary-based program is still in the testing phase but the first hydrogen-powered line in North America pulling freight will soon be a reality.

“It’s still early days, but it’s moving on its own,” he said. “We did a test run. We think by the end of the year we could have a revenue service move with the hydrogen locomotive.”

The hydrogen will be created using water as opposed to natural gas, which often comes with some form of carbon capture utilization and storage component.

There may still be some carbon footprint from the operation of the two facilities, depending on the source of electricity. The Calgary facility will be powered in part by CP’s existing five megawatt solar power facility co-located at CP’s headquarters.

“The Calgary and Edmonton fuelling stations will be essential to bringing zero-emissions hydrogen locomotive propulsion into reality as part of CP’s commitment to sustainable and responsible operations,” Kyle Mulligan, CP assistant vice-president of operations technology, said in a news release.

CP is receiving $15 million through Emissions Reduction Alberta for the program.

Construction is expected to begin later this year, with production and supply of hydrogen to begin in 2023.

This is the tip of the iceberg for ATCO, which has invested heavily in hydrogen for four different applications. This includes blending hydrogen into natural gas distribution for utilities, industrial applications such as the recent partnership with Suncor to reduce emissions, heavy-haul transport through trucks and rail, and for exporting.

“We are strong believers in the future of hydrogen,” said Myles.

Last week, Premier Jason Kenney announced $50 million in provincial funds for a Clean Hydrogen Centre of Excellence while the private sector has made billions of dollars worth of investments into the sector in the past 12 months. Meanwhile, Suncor recently announced its intentions to divest its interests in other renewable energies to focus on hydrogen in its path to net-zero.

jaldrich@postmedia.com
Twitter: @JoshAldrich03

STATE CAPITALI$M 

Proposed hydrogen-heated community gets $2M for feasibility study

Story by CBC/Radio-Canada • Yesterday 

ATCO Gas is getting $2 million to study the feasibility of supplying hydrogen to heat new homes in a proposed development in Strathcona County.


The Bremner community is proposed to be Canada's first all-hydrogen community

© Nathan Gross/CBC

ATCO and Qualico have teamed up to build houses in the proposed Bremner community. Three hundred homes are proposed for construction in the first two stages of development. The area is projected to eventually house 85,000 people.

If it proceeds, the proponents say the community will be the first in Canada to have its heat and hot water fully provided by hydrogen.

Funding for the feasibility study was announced Tuesday by Alberta Innovates. The provincial Crown Corporation is providing $20 million to 18 proposals through its Hydrogen Centre of Excellence.

Jason Sharpe, president of ATCO Gas, said the study would look at infrastructure needed to get hydrogen into homes, regulations and how it would be priced for consumers.

Related video: Alberta’s rural communities could benefit from renewable energy transition    (Global News)   Duration 5:13   View on Watch

"Right now the rules are not clear," Sharpe said. "So part of this study is to provide recommendations to government on how this could be done so that we would know the cost for someone who's buying one of those homes."

The development is expected to roll out in stages. Qualico will start preparing the site this spring with construction starting in 2024. People will start moving into their new homes in 2024.

Brad Armstrong, Qualico's vice president of community development for northern Alberta, said about 150 homes are planned for the first two stages. The development will have a mix of housing, including single family homes, townhouses and apartments.

"If we're successful, this will be the first pure hydrogen community in Canada," Armstrong said.

"We believe that the demand is going to be there."

Other projects receiving funding from the Hydrogen Centre of Excellence are a mix of industry and academic proposals.

Inter Pipeline Ltd. is receiving $2 million for a feasibility study into the Heartland Ammonia Project. The University of Alberta is getting $500,000 to look at hydrogen storage in Alberta's salt caverns. Innovative Fuel Systems Ltd. is receiving $2 million for a proposal to develop hydrogen dual fuel for heavy duty long-haul vehicles.

STILL USING HYDROCRABONS
Cogeneration plant at Edmonton International Airport takes off
Nicole Bergot 

Edmonton International Airport (EIA) has powered up a new natural gas cogeneration power plant to cut carbon emissions and costs

.

 Ed Kaiser The Edmonton International Airport on April 25, 2020.

The facility, under construction in 2019 and operational this spring, facilitates the capture of heat from electrical power generation, using it to warm water, which in turn heats the EIA terminal.

The plant is expected to cut the airport’s annual carbon emissions by roughly 20 per cent — or 7,000-8,000 tonnes of CO2 equivalent per year, says a Tuesday EIA news release.

Video: Massive solar farm proposed for Edmonton International Airport (Global News)

The facility is also expected to reduce EIA’s energy costs by roughly $800,000 per year.

Atco was the prime contractor for the $11-million project, located adjacent to the central utilities plant.

“Using natural gas, an abundant, affordable and clean energy source, makes CoGen a win-win solution that offers facilities an opportunity to decrease their environmental footprint through decreased GHG emissions and lower operational costs,” said Lance Radke, Atco vice president, customer experience and initiatives.

The Government of Alberta contributed $1.85 million towards construction.

“We couldn’t have done it without our partners, the Government of Alberta and ATCO, and we’re thankful for their support. Our company is committed to being carbon-neutral by 2040 under our commitment to the climate pledge and this new cogeneration facility goes a long way to helping us get closer to that goal by reducing our current emissions by 20 per cent,” said Tom Ruth, EIA president and CEO.

Wind and solar: A robust forecast for renewable energy in Alberta

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Lower costs spur growth of wind, solar, while coal-fired electricity generation continues rapid decline

Bryan Labby · CBC News · Posted: Jan 01, 2022

Wind turbines in Alberta are pictured in this file photo. The Alberta Electric System Operator says 14 per cent of the electricity produced in Alberta in 2020 came from renewable sources such as wind, hydro and solar. (CBC News)

The demise of coal-fired electricity plants in Alberta has been well documented in recent years, but it's happening a lot quicker than some expected. The Alberta government's target to eliminate coal-powered electricity is expected to be achieved seven years ahead of its scheduled date of 2030.

What's happening without much fanfare, though, is the transition from coal to renewable energy sources and the pace of the change.

The Alberta Electric System Operator says of all the electricity generated in the province in 2020, 14 per cent came from renewable energy sources, such as wind, hydro and solar. The number for 2021 is expected in the next few months.

The province's total capacity of renewable energy sources is 23 per cent. 

The Canada Energy Regulator (CER) says that number is likely to grow in the coming years, fuelled in part by more investment in renewable energy projects.

The CER predicts the total capacity of renewable energy sources in Alberta will reach 26 per cent by 2023. It expects the province to add "significant" solar capacity, or 1,200 megawatts, by the same year.

The provincial government's Renewable Electricity Act has a legislated target that 30 per cent of electricity generated must come from renewable energy sources by 2030. An interim target for next year is 15 per cent.

Investment growth

RBC predicts that investment in Alberta's renewable energy sector will continue to grow. It points to the Travers Solar Project currently under construction in Vulcan County, southeast of Calgary. The project includes more than one million solar panels that will generate enough electricity to power 150,000 homes.

The RBC report says there are 61 solar projects underway in the province that are expected to be completed by the middle of this decade.

"We believe Alberta is well positioned to attract more investments of this type and size in the years ahead," read the outlook.

Alberta's associate minister of natural gas and electricity said in a statement to the CBC that since 2019, more than $2 billion "worth of utility scale renewable generation projects" have been announced "without making Alberta taxpayers foot the bill."

The sun shines on a solar panel in Alberta in this file photo. Alberta's Renewable Electricity Act calls for at last 30 per cent of electricity generated in the province to come from renewable sources such as solar, wind and hydro by 2030. (CBC News)

An assistant professor in the department of economics at the University of Calgary says the RBC outlook highlights a turning point for Alberta.

"I think the RBC report really punctuates that renewables have gone from being a bit of a novelty in the province to something that has economic importance," said Blake Shaffer.

"There's so much investment in wind and solar right now in the province and I don't think it's really broadly known how much is going on."

• OPINION
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• How Canada's largest solar farm is changing Alberta's landscape

Shaffer says the phase-out of coal-fired electricity is spurring the transition, along with lower costs for renewable energy projects.

"If you were following news about five years ago, you'd associate renewables with high costs and big subsidies. That's really not the case anymore," he said. "It's profitable now to build renewables."

As an example, he says the cost to build a wind project is about $30 per megawatt hour, which would generate a healthy return based on current prices. 

"The power price in Alberta ranges between $50 … and it's $100 right now. So, you're getting a lot of profits in terms of building those renewables in the province at the moment."

Expanding solar portfolio

Calgary-based ATCO recently announced more moves into the renewable energy sector. The longtime natural gas distribution company purchased the rights to two solar projects in southeast Calgary that will generate enough electricity for 18,000 homes.

It also acquired a smaller solar project in Empress, a village east of Calgary near the Saskatchewan boundary. The project will power 11,000 homes when completed in about a year. The company has one other solar project in Alberta in Fort Chipewyan.

A conceptual drawing of a proposed 35 megawatt solar farm located south of 114th Avenue S.E. and west of 52nd Street in Calgary. ATCO acquired the rights to the project from DP Energy in September 2021. (DP Energy)

"I'm not at all surprised now with the momentum," said Karen Nielsen, ATCO's managing director of global renewables.

"There's such demand for clean energy as companies and businesses have to fulfil their obligation … whether it's a net zero commitment, or a commitment just to do their part in terms of the broader climate change strategies."

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Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.