August 12, 2013
New competitive procurement used for critical infrastructure
The Alberta Electric System Operator (AESO) is moving forward with the next stage in the selection of a proponent for the construction of a transmission line from Edmonton to Fort McMurray West using a new competitive procurement process.
“It’s been very gratifying to have companies from across Alberta, all over Canada and around the world, express interest in the project. It shows us that we are on the right track,” said Elizabeth Moore, director of the competitive process.
“At the end of the day, the proponent who can deliver the project at the lowest cost, while ensuring high quality and meeting all industry standards in construction, safety and ongoing operations maintenance, will be identified and awarded the opportunity to develop, design, build, finance, own, operate and maintain this major transmission facility.”
The AESO will select a proponent to develop, design, build, finance, own, operate and maintain the Fort McMurray West 500 kV Transmission Project for a term of 35 years.
According to Moore, 30 organizations have shown an interest in the next phase of the process for the Request for Qualifications (RFQ) stage.
The project will be the first in Alberta to use the competitive process, which is designed to maximize efficiency and save money on transmission costs.
The project involves the construction of a 500 kV AC single circuit transmission line, which will span the distance from a new 500 kV substation in the Fort McMurray area to an existing substation at the Genesee generating station near Edmonton.
A preferred and an alternate route will be proposed by the successful proponent, but final route determination will be the subject of approval from the commission.
The value of the project is estimated to be $1.6 billion.
The RFQ stage will conclude in December 2013, when an AESO-selected panel of experts will shortlist up to five bidders to move to the Request for Proposals (RFP) stage.
The AESO will not provide any cost reimbursement or compensation to respondents for participating in the RFQ stage of the competitive process.
However, if the competitive process continues into the RFP stage, the system operator intends to make provision for an honorarium to be paid to short-listed proponents not selected.
The winning proponent is expected to be named by the end of 2014.
The purpose of the project is to increase electric transmission transfer capacity into and out of the Fort McMurray area to accommodate load and generation growth.
The area is unique, as it has a significant number of large industrial customers.
As a result, the AESO said the current capacity of the transmission system to handle load and generation in the Fort McMurray area has reached it’s limits.
For example, over the last 10 years peak load (the highest demand for power) in the Fort McMurray area has more than doubled to 1,735 MW this year, from 855 MW in 2003.
This means that the amount of power consumed in the Fort McMurray area is now about the same as the amount of power used in either Calgary or Edmonton.
In addition, the AESO forecasts that load in the Fort McMurray area will be more than double again over the next 10 years, rising to 3,905 MW in 2022 from 1,735 MW in 2013.
Between 2022 and 2032, load in the Fort McMurray area is anticipated to grow another 765 MW to reach 4,670 MW.
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