A new look with a new owner
On Monday, December 1, 2014 Berkshire Hathaway Energy completed the purchase of AltaLink. The sale received the provincial approval from the Alberta Utilities Commission (AUC) after receiving federal regulatory approvals required under the Competition Act in Canada and the Investment Canada Act earlier in the year.
Now that we are a part of the Berkshire Hathaway Energy family, we have updated our look and have a new logo and colours. Even though we have a new look, our business is not changing. It’s business as usual for AltaLink and for you, our customers. We remain focused on delivering safe and reliable transmission service for the benefit of Albertans. We will continue to operate as a separate company under Berkshire Hathaway Energy with our current team and will continue to be headquartered in Calgary. The AUC will continue to regulate and have oversight of AltaLink's business.
Like AltaLink, Berkshire Hathaway Energy is focused on delivering reliability, dependability, fair prices and exceptional service to their customers around the world. Along with all of the Berkshire Hathaway Energy businesses, our vision is to be the best energy company in serving customers, while delivering sustainable energy solutions. From England to the Philippines to the U.S., and now Canada, Berkshire Hathaway Energy’s businesses serve more than 11.5 million electric and natural gas customers and end-users around the world.
Berkshire Hathaway Energy’s portfolio is diverse. It operates regulated utilities in 11 western and midwestern states and an electricity distribution business in England. Berkshire Hathaway Energy’s 16,400 miles of gas pipelines reach from Texas to Michigan and from Wyoming to California. To learn more about Berkshire Hathaway Energy’s commitment, please visit their website.
AltaLink 2014 by the numbers
Operating 24 hours a day, seven days a week, 365 days a year, a year can go by in the blink of an eye. 2014 was no exception for AltaLink, it was a busy year, and before we knew it 2015 was here. We want to share some 2014 highlights with you.
In January 2014, we were honoured to be the first electricity transmission company and only the second electricity company in Canada to receive the Canadian Electricity Association’s (CEA) Sustainable Electricity Company
designation. Receiving the designation is a reflection of our commitment to meeting the needs of our customers, stakeholders, communities and employees through sustainable business practices. In November 2014, AltaLink was named one of Canada's 10
most admired corporate cultures of 2014 in a national program presented by Waterstone Human Capital. The 10 Most Admired Corporate Cultures program recognizes best in class Canadian organizations for having a culture that enhances performance and sustains competitive advantage.
Safety
• AltaLink employees worked 2,899,341 hours without a lost time incident.
• 1,084,958 hours – eight months – worked by employees without a recordable incident. • 4,000 employees and contractors accessed safety certification e-learning.
• In November 2014, AltaLink received the bronze award for the CEA’s Vice President’s Award of Excellence for Employee Safety for our 2013 safety record.
Reliability
We provide 25 to 30 per cent more reliable service than the average of our Canadian Electricity Association peer companies. The following graph compares AltaLink performance to CEA averages on two key measures of reliability:
• Customer outage time – System Availability Interruption Duration Index (SAIDI) • Customer outage frequency – System Availability Interruption Frequency Index (SAIFI)
Project statistics
• 33 projects approved.
• 384 project inspections completed. • 27 facility applications filed.
• 19 customer connection projects were energized. • 23 total projects were energized.
• 83 per cent of projects were delivered on schedule. Cost savings
Through value engineering we realized $100M in total savings. On the Christina Lake Area Transmission Development project, we used a three-pole design that resulted in an estimated cost savings of more than $90 million. Two projects were energized with a modular substation, resulting in a 10-15 per cent cost savings over traditional substation designs.
Alberta electricity market
A robust transmission network enables Alberta’s competitive wholesale energy market. The average pool price was $49.42 per megawatt in 2014, the second lowest price in more than 10 years. Year-to-date in 2015, the price has averaged less than $30.
From our achievements and our results in 2014, we are confident that 2015 will be another great year.
AltaLink’s 2015 – 2016 General Tariff Application
Every couple of years AltaLink files an application with the Alberta Utilities Commission to recover the costs associated with expanding, owning and operating our transmission system. The revenue
requirement we indicate in the General Tariff Application (GTA) is the amount of money needed to pay for things such as: annual maintenance and operating costs, employees, taxes, depreciation expenses, right-of-way payments to landowners, essentially to run our business.
On November 18, 2014, AltaLink filed its GTA, and expects to spend approximately $2.5 billion on capital over the 2015 – 2016 period. The capital expenditures and additions for the Alberta Electric System Operator (AESO) directed projects, such as the Western Alberta Transmission Line, South Foothills Transmission Project, Foothills Area Transmission Development and portions of the Red Deer Area Transmission Development, were included in the GTA.
Throughout the process the AltaLink team focused on submitting an application that allows us to ensure a safe and reliable electricity service while also balancing the financial impact to our customers.
AltaLink’s approved revenue requirement in 2014 was $621.4M. Our revenue requirements are forecast to be approximately $0.8B in 2015 and $1.0B in 2016.
“The amount submitted for capital spending is largely reflective of the growth Alberta is experiencing,” said John Piotto, vice president, regulatory rates and tariffs. “In 2015, 92 per cent of our requested revenue increase is driven by the system growth and maintenance related costs associated with owning and operating more than 280 substations and 12,500 kilometres of transmission line.”
AltaLink is seeking to alleviate the financial impact to our customers by: • holding operating resourcing at 2014 levels.
• matching capital resources through 2016 to changing capital workloads.
• requesting the AUC to return AltaLink to normal construction work in progress accounting practices of capitalizing allowance for funds used during construction as of January 1, 2015, rather than continuing to fund this allowance during construction.
AltaLink requires GTA approval from the AUC to support its existing operations as well as new initiatives and projects. It’s important that we can show Albertans we are spending this money wisely and
effectively. We anticipate receiving a decision from the AUC regarding this latest GTA in the last quarter of 2015.
Stepping up our customer focus
As one of AltaLink’s valued customers, your voice matters to us. Over the last two years, AltaLink and our industry partners have heard the concerns our customers have on the length of time it has been taking to connect to the grid. Since 2012, the industry publishes quarterly measures on the connection process timeline.
“We knew that we had to reduce timelines by nearly 50 per cent,” said Lori Topp, AltaLink’s senior vice president, customer service.
The challenge
• Reduce the time for AltaLink customers connecting by modifying an existing substation (brownfield) to 18 months.
• Reduce the time for AltaLink customers connecting via new transmission facilities (greenfield) to 24 months.
Enter Step Change
To help actively address our customers’ concerns with new load or generation connection projects, the Step Change initiative was formed. For it to be successful, the collaboration of industry partners was essential. The AESO, the Alberta government’s Department of Energy (Alberta Energy), the AUC, FortisAlberta, and AltaLink have all been working together to improve the connecting customer experience.
We’re making strides
Through 2014 and into the first half of 2015, AltaLink and the AESO have made a number of
improvements to the process to complete a connecting customer facility application, particularly in the early stages of the process. The AUC is consistently issuing permit and licensing for connecting
customers within two to four months, which is a significant reduction from the nine months it took in 2012/2013
Other improvements
Enabled by a number of other improvements, AltaLink’s 2014 connection time measures, compared to 2012, improved by 37 per cent for brownfield, and 25 per cent for greenfield. Although this
improvement has been substantial, we aren’t done – AltaLink is looking to further reduce this measure by 10 per cent in both brownfield and greenfield in 2015.
This graph highlights the required reduction of cycle times from 2012 to 2017.
“It’s fantastic to see the timelines being reduced,” said Jan Burwell, director, customer services, and co-lead for Step Change within Altalink. “AltaLink and our industry partners still have work in progress to achieve the goal of 18 and 24 months, particularly for greenfield projects, but we’re on the right track. We are especially excited about the recent updates to the consultation rules for brownfield projects, and the abbreviated need approval process being proposed for mid-2015.”
You asked, we acted
AltaLink surveys a number of our customers throughout the year, and we receive valuable feedback from you on key areas to improve our service. This feedback is important for our ongoing commitment to improve your experience with AltaLink. Based on your feedback throughout 2014, we continue to work on service improvements to better meet your needs.
Customer connection experience:
• We continue to offer M-Power Connect which provides more transparency to, and influence on customer connection projects to better align with each customer's unique circumstances. We currently have seven projects signed up for M-Power Connect.
• We have been collaborating with industry to develop a framework that facilitates Market Participant Choice, and we are currently working through the process with the first customer to exercise this choice.
Outage management:
• We implemented an outage coordination improvement initiative with the AESO in the third quarter of 2014. This work was focused on improvements in defining outage risk criteria for market, reliability and customer impacts; establishment of some key performance indicators to manage the process; and enhancement of our previous outage coordination process focused on project portfolio coordination. AltaLink and the AESO leaders responsible for outage
coordination have also been meeting on a monthly basis.
• Throughout 2014, AltaLink worked to improve outage management with FortisAlberta creating new communication processes between the two control centres. This work has resulted in an organized coordination of switching activities, providing an efficient return of service to our customers.
Communications and collaboration:
• In collaboration with the AESO, we have implemented a quarterly portfolio review of our active connection projects to align costs, schedule and project risks.
• We are working with the AESO to find options to optimize costs, while continuing to facilitate new connections to the grid. This includes the development of a cost effective solution for the remaining Southern Alberta Transmission Reinforcement components.
• We are committed to building the infrastructure Albertans need, when they need it. To provide this we are working with the AESO on a long range project review to align schedule and scope expectations of new regional projects as they are identified.
• In coordination with FortisAlberta we are initiating work on communication enhancements during unplanned outages to ensure that end use customers have information on power outages causes, and the activities underway for restoration.
• Throughout 2014, two of our existing industrial facilities committed their resources to form a cross-organizational work team to complete a reliability review on both sides of the
demarcation point. Through this work a handful of reliability improvements have been recommended for implementation on both sides of the fence. Thank you to the teams who invested their time to better help AltaLink understand your business and the unique reliability requirements at your facility.
We value the feedback we receive from you, and we thank you for your participation in our customer satisfaction surveys. If you have any questions, would like to speak to someone about AltaLink’s services, or would like to learn more about any of the initiatives underway please contact us at
Save the date
Watch for your invitation for AltaLink’s Let’s Connect event taking place on Tuesday, June 2, 2015.
AltaLink project updates
Southern Alberta
Foothills Area Transmission Development
Construction activities are moving ahead on the Foothills Area Transmission Development (FATD). The development involves transmission system reinforcements to meet growing demand in the Calgary, Langdon, Okotoks and High River areas. It is divided into three projects.
The North Foothills Transmission Project includes building a new 240 kV transmission line from east of High River to east of Calgary.
The Foothills 138 kV Project involves transmission line reinforcements between High River and Calgary, building a new substation east of High River and upgrading the existing High River and Okotoks
The Langdon to Janet Transmission Project is a new 240 kV transmission line from Langdon to east of Calgary and includes upgrades to the existing Langdon and Janet substations.
The North Foothills Transmission Project and Langdon to Janet Transmission Project are both expected to be complete by the summer of 2015. The Foothills 138 kV Project is expected to be complete in fall of 2015.
South Foothills Transmission Project
Construction continues on the South Foothills Transmission Project, part of the larger area development called the Southern Alberta Transmission Reinforcement (SATR). The project includes building a new 240 kV transmission line from south of Fort Macleod to east of High River that will help to reinforce the electric system in Alberta. The entire project is on track to be complete in 2015.
Central Alberta
Red Deer Area Transmission Development
The Red Deer Area Transmission Development involves transmission system reinforcements between the Wetaskiwin and Didsbury areas to meet growing demand for electricity in central Alberta. On July 29, 2014, AltaLink received approval from the Alberta Utilities Commission (AUC) to construct
components that fall under stages two and three of the development and include building new substations and transmission lines near Ponoka, Innisfail and Didsbury and rebuilding three existing transmission lines in the Red Deer and Sylvan Lake areas.
Construction activities are underway in the Ponoka, Didsbury, Sylvan Lake and Red Deer area.
Construction in the Innisfail area is scheduled to begin in the summer or fall of 2015. Construction on all project components is expected to be complete by the end of 2016.
Western Alberta Transmission Line
Construction activities for the Western Alberta Transmission Line (WATL) began in early 2013. We expect construction to be complete and the new facilities to be energized and connected to Alberta’s electric grid in 2015. WATL will improve the reliability and efficiency of the interconnected electric system and ensure Albertans have access to the lowest-priced power.
At the end of December 2014, construction of the 350 kilometre transmission line was completed. Construction of the two converter stations is underway and will continue through 2015. Two new substations in the Langdon area, one of which is already completed, and a new substation in the
Genesee area will be completed in 2015. Take a look at our construction infographic for more about our construction techniques.