Predicted surge in power supply fizzles

The Alberta Energy and Utilities Board says it hasn't seen the flood of applications to build new generation plants that the government predicted after deregulation.

Energy Minister Steve West again reassured the public Wednesday that deregulation would herald new generating plants to increase supply, to quell concerns about low power reserves that could cause two-hour residential power outages this winter.

"As we go forward more generation capacity will be coming on stream," he said. "There were concerns that if we didn't deregulate, then down the road we would see a collapse in the power source."

But EUB spokesperson David Morris said since Bill 27 was passed in April there has been some increase in applications to build power generating plants, but not enough to have a significant impact on reserves.

He says the board has received six applications this year (five after April), which is more than the five applications they received last year or the three in 1995. But he said it's not the massive influx the government had been anticipating and the new plants scheduled to be built this year won't do much to improve reserves.

Dale McMaster, chief operating officer of the Power Pool of Alberta, said the province now has about 7,600 megawatts of supply and is forecasting this winter's peak demand will be 7,500 megawatts. That only leaves a one per cent reserve buffer, which is usually at 20 per cent.

At least 1,500 megawatts would be needed to restore reserves to normal levels. But new plants to be completed in 1998 will only provide 151.5 megawatts of power -- which will only increase reserves by between one and two per cent. Only 120 megawatts more are expected in 1999 so far.

"Certainly in the short term, over the next two years or so, it's going to be problematic," said Morris. "... I can't predict the future. But I'm optimistic that the picture will show improvements in the years to come."

When deregulation began in 1996, the government gave up its power to regulate the supply of energy in the province. New generation is now dictated by market demands.

In the unregulated marketplace, McMaster said new power generating plants in the province are likely to come from independent power producers and co-generation plants. Co-generation plants can produce power for themselves and sell their excess juice into the provincial power grid.

Byron Dudley is chief executive officer of Drayton Valley Power, which operates three small generating plants -- one of which is set to open in Westlock this September. Drayton's new plant will produce energy to run its own biomass burning production and sell the rest into the grid.

"Right now we're in a transitional period where there are likely to be some hiccups," he said. *

* POWERING UP

According to EUB predictions, at least 1,500 mw of power are needed to bring energy reserves back up to their usual 20 per cent buffer. Here's where some of the new power will come from:

1998 -- four new plants for a total of 151.5 megawatts (mw) n September: Primrose Power plant (CUPower/Amoco) -- 84 mw n September: Westlock biomass plant (Drayton Valley Power) -- 17 mw November: Grande Prairie area plant (Nova Pipelines) -- 6.5 mw December: Poplar Hill plant (CUPower Poplar Hill) -- 44 mw (still not approved, under review)

1999 -- one new plant for a total of 120 mw n December: Dow plant (TransAlta) -- 120 mw

2000 -- two new plants for a total of 504 mw n Joffre plant (Nova Chemicals) -- 420 mw n Scotford gas plant (ALC Scotford) -- 84 mw (still not approved, under review)

2001 -- one new plant for a total of 220 mw n Cold Lake plant (IOL) -- 220 mw (still not approved, under review) Source: Alberta Energy and Utilities Board