On September 15, 2008, the Ontario Energy Board (the
Board) granted Hydro One Networks Inc. (Hydro One) leave to
construct a 180 km double-circuit 500 kV transmission line from the
Bruce Nuclear Generating Station in Kincardine to the GTA (Milton).
The Bruce to Milton reinforcement project is the first major
transmission project Hydro One has undertaken since the early 1980s
and will widen an existing transmission corridor to transfer over
3,000 megawatts of power from the Bruce area to Southern Ontario.
It is estimated to cost $635 million. The transmission line is
expected to be in service by 2011. This OEB approval is a
significant step towards the largest expansion to Ontario's
transmission system in 20 years.
Hydro One's application was based on an identification of
need by the Ontario Power Authority, comprised of three areas:
Expected continued Bruce nuclear generation at present
"Committed wind" projects in the Bruce area; and
"Planned wind" project potential, including the
ongoing Renewable Energy Standard Offer Program (RESOP).
Intervenors challenged both the content of this need
identification and the choice of a 500 kV transmission line to meet
the need. It was instead suggested that there was insufficient
certainty behind continued levels of Bruce generation and the
establishment of large wind projects, and that upgrading the
existing 500 kV line with "series capacitors" presented a
more economical alternative. In addition, potentially affected
aboriginal groups submitted that both the Province of Ontario and
the Board were remiss in meeting their constitutional duty to
The Board determined that the need forecast was reasonable
(despite identifying uncertainty about Bruce nuclear generation
levels), a 500 kV transmission line was the best alternative to
meet that need, and that aboriginal consultation to date was
sufficient. The aboriginal consultation conclusion was grounded in
the fact that the environmental assessment (EA) process is ongoing,
and has a broader mandate that touches more directly on potential
aboriginal impacts than does the Board's mandate of the price,
reliability and quality of electricity service. The Board's
economic leave to construct decision is conditional upon Hydro One
receiving EA approval.
The decision is a milestone for three reasons: the parallel EA
process, landowner participation, and the Board's aboriginal
First, the decision demonstrates that facility approvals can
proceed down parallel regulatory paths in which EA is able to
retain priority. This is unique because it is the first project of
this magnitude to receive an approval prior to EA. This is unlikely
to be repeated outside of Ontario because similarly-sized projects
would likely cross provincial boundaries, triggering the
Canadian Environmental Assessment Act. However, the
flexibility demonstrated by the decision is nonetheless important
for Ontario project developers.
Second, facility approvals involving landowners have not
typically come before the Ontario Energy Board, as they are Ontario
Municipal Board processes. The decision demonstrates that the Board
can, and is prepared to, deal with intervenor interests in a
commendable manner. A number of self-represented landowners
participated throughout the proceeding, and the Board ensured that
they were able to participate fairly, without compromising the
efficiency of the regulatory process. This is in stark contrast to
the Mackenzie Gas Pipeline and the Alberta 500 kV transmission line
Finally, Crown consultation was unique in that the Board, a
statutory delegate, included the adequacy of aboriginal
consultation on the part of its principal as one of the issues to
be considered. The core issue raised by intervenors was whether the
Board was able to make a determination before consultation had been
completed concerning all elements of the Project. The Board took a
pragmatic approach, whereby it considered the evidence before it
and made findings, but left open the question of consultation on
the part of other Crown actors (i.e., the EA process). By doing so,
the Board made clear that the adequacy of Crown consultation can be
considered in a stepwise manner.
Gord Nettleton is a partner with Osler, Hoskin
& Harcourt LLP practising in the Calgary office's
Litigation Department. Matthew Keen is an
associate in the firm's Calgary office. His practice includes
environmental and regulatory law dealing with the application and
approval processes of energy projects.
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The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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