Canada open for competition while U.S. sorts out Order 1000 – RES Americas

RES Americas is targeting competitive transmission opportunities in Canada while it waits for FERC Order 1000 to take effect.

The company formed a joint venture, RES Canada Transmission, with MidAmerican Transmission specifically to take advantage of such opportunities.

“Order 1000 is a key driver in our interest in getting into the business,” Jerry Vaninetti, senior vice president of RES Canada Transmission, told TransmissionHub.

He added that the amount of time the compliance process may take will allow the company to position itself to capitalize on competitive opportunities when the policy finally goes into effect.

Order 1000 requires the elimination of right of first refusal (ROFR) language from federal tariffs, opening up new transmission construction to competition.

RES Canada Transmission has been focused on the East-West Tie Line in Ontario, but the company will also pursue the Fort McMurray West project in Alberta.

The East-West Tie was identified in 2011 by the Ontario Energy Board (OEB) as a priority transmission project. RES Canada Transmission was one of six bidders, including the incumbent, Hydro One, which joined with Great Lakes Power Transmission and Bamkushwada, a consortium of First Nations.

The Ontario Energy Board may announce the winning bid for the developer of the East-West Tie Line “within a few weeks,” a spokesperson for the OEB told TransmissionHub.

A panel of three OEB board members – Cynthia Chaplin, Cathy Spoel and Emad Elsayed – is evaluating the proposals based on several criteria, including technical capability, financial capacity, proposed design, schedule, cost, First Nation and Metis consultation, organization and First Nation, landowner, municipal and community participation.

The East-West Tie is a 248-mile (400-km), 230-kV transmission line that will run from Wawa to the Lakehead substation near Thunder Bay, Ontario.

“It’s a key east-west corridor across Canada, and now that NERC is starting to ramp up enforcement of reliability an operating criteria, the existing double-circuit 230-kV line just doesn’t have the capacity to serve the role it’s always had in transferring power across Canada, and particularly across Ontario,” Vaninetti said.

Because of NERC’s enforcement of requirements, the capacity of the line has dropped to 175 MW from 350 MW, Vaninetti said. The new line, which will roughly parallel the existing one, will increase capacity to 600 MW, he said.

RES has proposed two different designs: a 230-kV double-circuit line consisting of lattice towers (the reference design), and a 230-kV single-circuit line using a combination of lattice and steel H-frame towers (preferred design).

RES has submitted an estimated project cost range of $413m to $494m. 

The terrain the line will cross, the Canadian Shield, is challenging, Vaninetti said. The Canadian Shield is made of Precambrian rock, making it very hard. Furthermore, the weather off of Lake Superior can be severe, including ice storms that are problematic for trees and transmission lines. Such conditions warrant significant design requirements, Vaninetti said.

The Fort McMurray West project is a 310-mile, single-circuit 500-kV transmission line that originates at Genesee and terminates at Fort McMurray, Alberta. The project, identified by the Alberta Electric System Operator (AESO) and declared critical transmission infrastructure by the provincial legislature in 2009, is scheduled to complete in 2019.

The AESO held a bidders conference in Calgary in June, which 62 companies attended, Vaninetti said. “There’s a lot of interest in that competitive situation,” he said. 

According to the AESO’s timetable, requests for expressions of interest were due June 19. The request for proposals stage will open this month.

A different joint venture, TAMA Transmission, was formed between MidAmerican Transmission and TransAlta Corp. to develop this project.

RES entered the competitive transmission business after Texas’ Competitive Renewable Energy Zone (CREZ) projects were designated, Vaninetti said. Though significantly fewer, the number of competitive projects identified in Ontario and Alberta provide the next big opportunity.

“Because we’re not an incumbent utility – we’re a new entrant focused on the development end – that limits us to effectively nonincumbent projects,” Vaninetti said.

The Midcontinent ISO, Southwest Power Pool and ERCOT offer fewer opportunities because the regions have already taken steps to expand their transmission systems. “Other regions have pretty substantive opportunities for us,” he said. “If anything, Canada is now taking the lead on competitive transmission for North America, while FERC Order 1000 is going through its process.”

RES had been involved in building generation ties to wind farms it had developed when it decided to get involved in the transmission construction and development business, Vaninetti said. 

“RES has been active in North America since 1998, and built something like 30 [generation] ties to connect solar or wind to the grid, ranging anywhere from thousands of feet to 40 miles here in Colorado,” Vaninetti said. Some lines were 345-kV, he added.

One of the projects RES built, the 30-mile, 230-kV Greenwich line, connects to the existing East-West Tie. The Greenwich line was built to connect the Greenwich Wind Energy project, which RES also constructed, to the grid. The company ultimately sold the wind farm to Enbridge (NYSE:ENB).

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.