The Ontario Power Authority, by virtue of its role as the primary planner for the provincial electric system, carries a major responsibility for ensuring that uneconomic congestion in the future is kept within reasonable limits. Like the IESO, it has a suite of tools for planning and managing the development of the grid, and congestion management is never far from their minds. The OPA notes however that although many see its role as generally related to minimizing uneconomic congestion, with respect to the FIT program the OPA actually does its congestion planning on a percent of time basis, and makes no claims about how much congestion is economic or uneconomic for those investments.
For the purpose of determining transmission build out for enabling renewable resources, the OPA uses two defined metrics in evaluating proposals for major new transmission facilities: The expected congestion levels and unitized cost. In terms of the allowable level of congestion, the OPA is planning for a “generally uncongested” system. The measure they have proposed for this is to have congestion during no more than 5% of the hours in a year on any major transmission path on the Ontario transmission grid. While there is no industry standard for an acceptable level of congestion, the 5% value is in line with other jurisdictions in North America. Any such standard is of course a tradeoff between the cost of a more robust grid versus more efficiently producing either lower-cost or environmentally-preferred generation on the system.
Under the Economic Connection Test (ECT) established as part of the Feed-in Tariff (FIT) program, a maximum cost for new ratepayer-funded transmission network capacity has been established for FIT projects. The general rule is that to initiate a transmission project’s development work, the total cost for all required ratepayer-funded transmission network capacity should be no greater than $500 per kilowatt of generation enabled ($500/kW). It should be noted that all network transmission costs are combined when this comparison is made, meaning that if a generator triggers multiple network transmission upgrades to get to market the combined cost of these network upgrades is evaluated and compared to the threshold. The decision to build the facility ultimately will be determined by the OEB in a Leave-to-Construct application once the early phase development work is complete
The OPA’s Director of Transmission Integration Bob Chow explains: Because the FIT is a standard offer program, the power cost is predetermined, and the offer to connect has already been made, in principle. A procedure that frequently exists in other kinds of economic evaluations, an examination of the cost of the resource a proposed project relies on, is absent here. The sole question from a planning perspective then becomes what system expansion, where and when, is economic. And the metric applied there is the cost of the additional line against the amount of generation that will be enabled as a result of the investment. If the expansion comes in under $500/kW, it passes the test.
If a given expansion project meets these two tests, there is a great deal of flexibility in how to bundle projects together for attachment to a new facility, and in developing the expansion plan. Every case is different, Chow explains, and each requires detailed analysis of the options – which projects to connect in a given area, whether to build one line or more, and where, what voltage the lines should be built to handle, the use of other technologies, like FACTS or Static-Var compensators that might be deployed, and so on. Inevitably, a key part of the ECT process is the development of options. It’s a rigorous process, but with a lot of flexibility, he says.
Having established what the OPA considers an adequate expansion to serve a given project or group of projects, the next step is to find a transmitter to build the line. Selection of a transmitter is a process that is regulated by the OEB, which has recently posted its proposed framework on how a transmission developer is to be selected for a given expansion project. (See related article elsewhere in this issue of IPPSO FACTO.) The OEB document “Framework for Transmission Project Development Plans,” released August 26, is available at www.oeb.gov.on.ca/. There are also choices on the part of the project proponent, such as the possibility of paying for construction of enabler lines themselves. Consideration of such options may involve a dialogue with the generator.
Bob Chow notes that the Bruce to Milton line, the need for which was initially identified by the OPA and which is presently the only major work under way by Hydro One, is in many respects the progenitor of the present system. “There wasn’t any ECT process at the time, but if it were to be proposed today, the Bruce to Milton line would probably be subject to it. We didn’t realize it at the time, but it formed the pattern for future transmission expansion – it considered contracted and prospective needs; it enabled renewable resources; it assessed congestion versus cost of expanding infrastructure; it clarified the roles and responsibilities of the transmitter, OPA and the IESO in such projects; and it provided a rational process for advancing transmission projects,” Chow said.