Facts

What EPCOR Wants You to Know About EPCOR's Plans in Rossdale

This information circular by EPCOR was released just days before the Alberta Energy and Utilities Board's hearings into the application for this project. The ethics of such timing are most questionable. In addition, this release is so misleading in many areas that it may, in fact, be in violation of the Alberta Fair Trade Practises Act and the Federal Competition Act. Consider the following claims in the circular:

• "Renovation" - This project is described as a "renovation". It involves the demolition of a large historically and architecturally significant building and the eventual construction of three monstrous buildings in its place. It will see the output of the Rossdale site rise from around 220 megawatts today to around 750 megawatts eventually. The Rossdale plant will go from a "peaking" plant (that is, one that is operated only occasionally during peak demand) to one that is operated on a continuous basis. Total power generated at the Rossdale site will eventually be around ten times the current level. One meteorologist has claimed that emissions from the Rossdale site will eventually be greater than the emissions from all the traffic in Edmonton. This is an EXPANSION not a RENOVATION.
• "It would cost over a billion dollars and would mean a significant rate increase for consumers" - EPCOR's circular indicates that the cost of decommissioning the Rossdale facility would be "billions of dollars". This ignores the results of the study by Coopers and Lybrand that was commissioned by Edmonton Power in 1988. That study estimated that the costs associated with shutdown of the Rossdale Power Station and the rehabilitation of the site was around $9.8 million. Edmonton Power (now known as EPCOR) at that time applied for, and received, a rate increase to allow the accumulation of a $9.8 million fund to cover those costs. A large portion of that fund has now been accumulated and hence the net cost to decommission the Rossdale generating station and rehabilitate the site would be close to zero. When challenged on the "billions of dollars" claim at the EUB Hearing on April 17, EPCOR admitted this number was incorrect.
• "Smaller" - The circular talks about this being "smaller". Phase I of this project will increase capacity of the Rossdale site from 211 megawatts today to 391 megawatts by the addition of a new 170 megawatt gas turbine generator. Phases II and III will see the capacity ultimately increased to around 750 megawatts. This is LARGER not SMALLER.

ConCerv wishes to make the following comments on the EPCOR "commitments" contained in the circular shown above. The numbers below are from the circular above.

1. EPCOR will not be working within their existing site perimeters. They intend to take over the Emergency Response Department (ERD) site and have that rezoned from "Parkland" to "Public Utility" or "Industrial". This will allow EPCOR to expand onto that site in addition to their existing area and this will continue the trend of "creeping expansion" that has been occurring on the Rossdale site since 1912.
2. It is unlikely that anything of historical significance can be retained within the scope of the three expansions to occur on the Rossdale site. The historically and architecturally significant Maxwell Dewar Building will be demolished even though Alberta Community Development has asked EPCOR to consider those options which would allow it to be retained. The recently discovered Palisade Wall that was shared by the two trading companies will have to be excavated for the foundations for the new buildings. And access to the balance of the site will be denied as it will be within EPCOR's security area. This is a tragedy as the Rossdale site is one of the most historically significant areas in Canada. To name just a few of the more important features:
   
   • This is where Sir Wilfred Laurier proclaimed the Province of Alberta in 1905.
   • This is one of the few places in Canada where the North West Company and the Hudson's Bay Company shared a common site.
   • This was the site of the first permanent European settlement west of the Red River in Winnipeg.
   • Recent artefacts found on the EPCOR site date back 8000 years. This confirms that the Rossdale area has been a gathering place for First Nations People for millennia
3. The archaeologically significant areas lie within the security perimeter of the EPCOR site and no public access will be possible. It is difficult to understand how these artefacts can be preserved for future generations if public access is not permitted.
4. The existence of First Nations and European gravesites on the Rossdale site has been known for a long time. Maps of the first settlements of the area clearly show their boundaries. First Nations People raised the issue at EPCOR's Annual General Meeting in 1999 and were promised then that the matter would be resolved. Yet despite this, EPCOR officials continue to deny the existence of gravesites in the area of the project and have done little to resolve the concerns of First Nations People on the matter. It is difficult to see how these concerns can be accommodated within the scope of the proposed expansion projects.
5. The physical appearance of the Rossdale site could have been improved at any time over the last 100 years and does not require this expansion project to allow site improvements to be undertaken. Unfortunately, EPCOR has not placed any importance on aesthetics, and the appearance of the current site is nothing short of abysmal. This is the view that all visitors to Edmonton see as they come down Queen Elizabeth Drive into the City. It is difficult to understand how anyone could claim that an industrial site such as Rossdale could be compatible with the Downtown Park System and the Legislature and its grounds.
6. The efficiency of the Rossdale units will be improved with the RD11 project. However, it will still leave Rossdale as one of the most inefficient power stations in the Province.
7. EPCOR are to be commended for their consideration of Edmonton in this project. Unfortunately, the power from this expansion is not really required. Readers are referred to the web page of the Power Pool at www.powerpool.ca to obtain the most up-to-date statistics on the supply and demand for power in Alberta. This shows the following:
   

   	1997	1998	1999	2000	2003 (est.)
   Available Power (Megawatts)	8344	8713	8780	9396	10,000+
   Peak Demand (Megawatts)	6659	6778	6812	6934	7500

   Although there is sufficient power overall in the Province, there is a problem in the location of that power generating capacity. The overwhelming bulk of the power generation capacity is in the north of the Province while the large growth in recent years has been in the south. If left uncorrected, this imbalance will have a serious effect on load stability, transmission losses, and overall costs to all Albertans. The Rossdale expansion will do nothing to help this situation. In fact, it could even make it worse.
   
8. EPCOR's claim that it has been a good corporate citizen in Rossdale is without foundation. EPCOR has turned its Rossdale site into a construction site for most of the last 10 years with only scant concern for their Rossdale neighbours. The three phases of expansion at Rossdale will turn it into a construction site for the next 10 years. Undertakings given in the 1988 Environmental Impact Study are still waiting to be commenced. Noise levels remain above acceptable limits in a number of areas. And so on. EPCOR, in fact, has been a very poor corporate neighbour and this has been communicated on many occasions to EPCOR Management. The most recent of these was at a meeting with senior EPCOR management on April 5, 2000. Despite being told this news on numerous occasions, EPCOR claims they are fine corporate citizens and this project enjoys significant local support. The reality is that this project enjoys little or no support in Rossdale (or in Edmonton for that matter) and the wishes and requests of Rossdale residents have been totally ignored on a consistent basis.

Alberta's Power Supply

"...over the next few years we will see significant generation facilities built here. You'll see the price driven downward."
- Sean McGoldrick, Vice-President, Technical Services for ESBI Alberta Ltd., the electricity Transmission Administrator¹

There is not an impending electrical shortfall. System Reserve Capacity is Growing. Since 1998, electrical energy supply in Alberta has been tight. But this is changing quickly - by next year reserve will be ample. The timing of generation additions relative to the load growth on the Alberta Interconnected Electrical System (the "Grid") is the key to having an appropriate level of reserve capacity. Recall a few years ago, with the completion of Genesee - it was claimed that the system was grossly oversupplied.

Recently, reserve margins have been tight, but with the expansion of the BC tie and new generation now being completed, ample reserve will be in place by mid 2000.

EPCOR continues to proclaim that there is an urgent need for new generation. But independent industry experts disagree. A Power Pool of Alberta spokesperson has stated that plants with a combined total of 1,018 megawatts are scheduled to come on stream.

Some points to keep in mind:

• Peak electrical load on the Alberta interconnected system is 7000 megawatts. Generation capacity on the system is close to 8000 megawatts.
• Approximately 1000 megawatts of generation will come on-stream by 2000.
• Price sensitive load is about 500 megawatts. This is curtailed through price during peak demand periods when there is insufficient reserve.
• Load growth in Alberta has been about 3% per year. Growth to 7500 megawatts by the year 2000 would represent a growth rate of 3.5% per year.
• The capacity of the BC tie has been increased from 400 megawatts to 950 megawatts.
• The net contribution coming to the City of Edmonton from the revenues due to this expansion might be in the order of $3 million per year*. Those revenues could be generated by installing this capacity at another site. They need not be lost just because Rossdale is not expanded.
• EPCOR's proposal claims to provide 140,000 person years of construction employment. This amounts to 35 jobs over two years.
• There is no compelling economic reason for locating this additional capacity at Rossdale.

Quality of life is our City's most important economic advantage. The river valley ranks as #1 on every survey asking Edmontonians what they like most about their City. The Rossdale site occupies a most remarkable piece of land. It is not surprising that Edmontonians want to reclaim this site.

No information is presented as to what this represents as a return to EPCOR's shareholders after costs and taxes are paid. However, based on EPCOR's total revenues paid to the City as a percentage of all revenues, it is estimated that the return to the City from the power generated by this expansion might be $3 million per year. That amounts to about $4 per citizen per year.

This revenue does not have to be lost if Rossdale is not expanded. Generating capacity equivalent to that of Rossdale could be installed elsewhere at a comparable site at a comparable cost. There is no compelling reason for constructing this new capacity at Rossdale. There is no "Rossdale Advantage". Construction of this new capacity elsewhere would allow EPCOR to continue to capture those revenues. There are other locations where EPCOR could locate this additional capacity either as combined cycle power or, preferably, as co-generation. EPCOR does not give any evidence it has pursued additional co-generation options (e.g., in combination with an industrial user). Such a unit would have an efficiency of up to 70% and would therefore be more economic than the Rossdale proposal which has an efficiency of about 50%. It could be located elsewhere.

Incomplete Disclosure

Some points that EPCOR won't tell you:

• EPCOR documents make only one small reference to future plans on the site beyond repowering unit #8 with unit #11. This is a serious omission.
• Demolishing the building is necessary only to accommodate future expansions- repowering is just the first of several phases in the creation of a much larger power plant than what exists or is proposed today.
• Approval of this phase 1 expansion would give rise to justification for further expansions by retrofitting the remaining two high-pressure turbines.
• On September 9th, 1999 EPCOR officials confirmed that these further expansions are a definite possibility. This amounts to an incomplete disclosure by EPCOR of plans for the site.
• EPCOR makes much of the available transmission facilities at Rossdale. Other services must be considered. A new 16" high-pressure natural gas line will have to be run through Edmonton's south side and under the river to serve the plant.
• The Transmission Administrator refutes that Rossdale is an ideal location for large new generation.
• It will cost $500 million to expand the transmission system to accommodate more electrical energy moving down the Edmonton/Calgary corridor - a cost that will be born by all Alberta consumers.

No private company could make a proposal of this nature without full and true disclosure. It is time EPCOR made a full and complete disclosure about intentions for this site, and it is time there was an open discussion about options for this site in an open forum. Not behind closed doors with Council as has occurred in the past.

EPCOR's misreading of its community support is a result of three factors:

• Failure to ask a direct question of any significant number of people.
• Lack of clarity on the nature of the project and its long-term implications with respect to land use.
• The presentation of "specific" messages to audiences to secure the desired result, rather than the provision of full and open disclosure. Examples - District Heating to downtown business groups, Smaller Building to nearby residents, Power Shortages to citizens, Emission "Reductions" to environmental groups, and so on. That none of these messages bears up under scrutiny is interesting their impact in total is disturbing.

ConCerv has approached significant numbers of citizens on the valley trails, in Rossdale and elsewhere in the city. The vast majority has not heard of the EPCOR proposal. On one day alone, five said they wanted more information before forming an opinion. One said that utilities are essential services. All others - more than 180 citizens - were horrified to learn that City Council had approved the EPCOR proposal, were strongly opposed to the project, and signed a petition calling for City Council to:

1. Reverse its approval of EPCOR's Rossdale Repowering Project.
2. Adopt a long-term vision that phases out major utilities from Edmonton's central river valley.

This sampling of public opinion, while informal, is five times greater than EPCOR's public participation process. On the basis of 39 completed questionnaires, most simply requesting more information, EPCOR concluded that Edmontonians support this project. On the basis of our contact with citizens, we conclude that EPCOR's public participation program was effective in only one respect - making this the quietest major project in Edmonton's history.

Emissions

Air: Total hourly NO_x emissions will increase.

Emissions per unit of electricity will go down, but unit #8/11 electrical output will mor than triple. Peak ground level concentrations result from a new stck with more dispersion. The unit will operate continuously, 50% more per operating hour and many more hours per year.

Water: Thermal emissions to the river will increase as a result of continuous operation.

Some points:

• EPCOR documents show that the proposed expansion could be accommodated within the existing structure. The incremental cost is given as $3 million.
• The EPCOR documents make no mention of any development of the Rossdale site other that the repowering of units #8 and #11.

The EPCOR documents make it clear that the proposed expansion involving Units #8 and #11 could be accommodated within the LP Building. This could be achieved by custom designing the gas turbine and heat recovery units and/or lowering the foundations by ~25 feet by using soldier piles. This was confirmed by EPCOR in the September 9, 1999 meeting with ConCerv.

In that September 9 meeting, EPCOR gave this incremental cost as $5 million, but in its documents it gives the cost as $3 million. Regardless of which is correct, the point is that the repowering project can be completed in a fashion that leaves the LP Building intact.

Grant money is available from other levels of government for preservation of such a historic building.

About the building:

• Demolition of the historic building - one of only five in Edmonton and the only one to rate 48/48 on an historical importance valuation. This does not represent an enhancement of the Rossdale site.
• The tallest section of the plant is currently 75 feet tall. The proposal calls for it to be rebuilt as a structure that is 97 feet (or ten stories) high.
• The proposal adds an additional large stack to the three currently operating. EPCOR plans to replace the firefighters training facility with an equipment storage yard.

According to the report on the Historical and Architectural Merit contained in EPCOR's Municipal Environmental Impact Assessment, the Rossdale Generating Station is the ONLY steel load-bearing skeleton with brick curtain wall industrial building that still exists in Edmonton. It is described in the report as displaying "a remarkable degree of preservation". It was designed by the prominent Alberta architect, Maxwell Dewar.

The proposal calls for the new building to be a pre-engineered structure and be finished using a red "brick-like" metal cladding. It is not an enhancement to eliminate the only architecturally significant resource of its kind and replace it with a fake brick metal clad structure.

EPCOR makes much of the elimination of six of the stacks. The six stacks are those located on top of the historic building. They have not been in operation for years and could be removed. Their proposed elimination is in conjunction with the proposed demolition. The three larger stacks will remain and a new larger stack will be added that will be in continuous operation.

• While district heating systems were installed at the turn of the century, recent North American installations are not common even in locations with higher fuel prices than Alberta.
• A future Rossdale system would lack one of the large economic drivers that would be present in an arrangement where the electrical generation is located with the heat sink thereby have the ability to supply electrical load without bearing transmission and distribution costs.
• EPCOR has indicated that it has studied district heating in the 1970s, 1980s and 1990s, finding that the concept then and now is uneconomic.

With these findings it is difficult to understand why District Heating features so prominently in EPCOR's promotional literature. It would appear that in this, as in other cases, EPCOR's promotional literature is connected only loosely to the factual situation or business reality.

How Efficient is the Rossdale Location?

EPCOR has said that "With generation being in close proximity to the load, transmission losses are reduced and the efficiency of the overall system is improved. If all of the load currently supplied from Rossdale were supplied from Cloverbar, energy losses would increase on the order of 3-4 million kWh per year."

To put this number in perspective, it represents about 0.4 MW or less than 0.2% of the efficiency of the Rossdale plant. By way of comparison, transmission losses in Alberta average about 6% of all power generated and delivered to customers over the transmission system (about 2.5 billion kWh per year). The efficiency range of new combined cycle and co-generation projects coming on stream is from less than 50% (Rossdale) to about 70%.

It is also important to look at location factors and efficiency from a broad perspective. Load growth in central and northern Alberta has been substantial but it is accompanied by excellent opportunities for co-generation. It obviously makes sense to install co-generation at Joffre, Fort Saskatchewan and Fort McMurray where the opportunities exist. However, this does add to the existing transmission situation where there is much more generation in central and northern Alberta and looming transmission constraints on the Edmonton/Calgary corridor.

High efficiency opportunities that are site-specific must be located at those sites. The proposed Rossdale capacity is at the low end of generic combined cycle efficiency.

New capacity of generic efficiency should be sited in consideration of the total transmission system. Given the above factors, we conclude there is no energy efficiency advantage to the Rossdale site.

Greenhouse gas emissions resulting from the total electrical energy used by customers are a result of total customer demand and the efficiency with which the demand is served including generation efficiency as well as total system transmission and distribution losses.

Footnotes:
1. The Edmonton Journal, Wednesday 8 September 1999

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