DELIVERING VALUE THROUGH
INNOVATION
A message from Scott Thon, President and Chief Executive Officer More than $500 million in savings for customers over the next three years AltaLink is committed to delivering value to our customers. With the support of our new owner, Berkshire Hathaway Energy, we have identified new opportunities to recapitalize our business and tax assets and pass all of those savings on to our customers. On June 1, 2015 we submitted an amendment to our 2015-2016 General Tariff Application to the Alberta Utilities Commission (AUC). This amendment includes reducing customer costs by more than $540 million between 2015-2017. We know that current oil prices are directly or indirectly impacting most Alberta businesses and residents. At the same time, we are sensitive to the impact of price increases our customers experience associated with the much needed expansion of Alberta’s transmission grid. We believe this is the right solution for our customers and all Albertans. The cost relief proposed in this amendment will help all of our customers navigate through this challenging economic time. As a fully regulated company, our proposed amendment requires the approval of the AUC through a public process. We expect the application to be reviewed by the AUC later in 2015. At AltaLink, we will continue to deliver value for our customers, while keeping the lights on safely and reliably for all Albertans.
Scott Thon, P.Eng President and CEO As Alberta’s largest transmission company, AltaLink owns more than half the provincial transmission system with a 212,000 square kilometre service area. Our network of more than 12,500 kilometres of transmission lines and 280 substations delivers electricity safely, reliably and efficiently from generators to industry and the electricity carriers, which power the homes, farms and businesses across central and southern Alberta.
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At AltaLink, our job is delivering value to our customers. We specialize in building, owning, operating and maintaining transmission facilities ranging from 69 to 500 kilovolts (kV). Using our state-of-the-art telecommunications network, our control centre helps us to monitor remotely and securely operate this extensive transmission system, ensuring safe and reliable electricity service. Our employees are transmission professionals with decades of experience. We are proud of our expertise and ability to blend the tried with the new in developing innovative cost-effective management of Alberta’s growing transmission network.
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In 2014, AltaLink was honoured to be the first electricity transmission company in Canada to receive the Canadian Electricity Association’s Sustainable Electricity Company designation. Sustainability is part of AltaLink’s overall business strategy that deliberately and collectively considers the environmental, social and economic aspects in our planning and decision-making. The designation is a reflection of our commitment to meeting the needs of our stakeholders, communities and employees through sustainable business practices. We were also named one of Canada’s 10 most admired corporate cultures of 2014 by Waterstone Human Capital, for having a culture that enhances performance and sustains a competitive advantage. Our ability to best serve our customers is tied to the engagement of our employees. We will continue to invest in building our culture and delivering results to our customers through the wellness, growth and safety of our employees. 2
SQUARE KILOMETRE
SERVICE AREA
KILOMETRES OF TRANSMISSION LINES
The value of transmission in Alberta Our transmission system is the essential link that connects Alberta’s diverse electricity generators and electricity carriers to homes, farms, businesses and industries across the province, delivering reliable and affordable electricity. Demand for electricity in Alberta continues to grow. This demand has been created by population and industrial growth, as well as the new technologies that are dependent on electricity. The enormous strain on Alberta’s electricity system is evidenced by the January 2015 peak electricity load of 11,229 megawatts, 15 years ahead of the Alberta Department of Energy’s 1994 forecast.
Our transmission system enables a more competitive and sustainable Alberta electricity market by connecting Albertans to diverse generation sources.
Alberta’s electricity industry met this demand by adding more than 7,000 megawatts of new generation; all without creating government debt. The increased demand for electricity and the new generation means that existing transmission facilities need to be reinforced and new facilities built to ensure the electricity will be there when Albertans need it. Our transmission system enables a more competitive and sustainable Alberta electricity market by connecting Albertans to diverse generation sources such as: natural gas, wind, coal, hydro, and biomass. In 2014: • the total generation capacity in Alberta increased 11 per cent to 16,115 megawatts. It was driven primarily by new gas and wind generation plants. • for the first time in Alberta, total installed capacity of gas-fired generation, including cogeneration, exceeded that of coal generation. • w ind generation comprised nine per cent of the total installed generation capacity in Alberta. The transmission grid is the backbone of Alberta’s electricity system. The total delivered cost of electricity has approximately matched the rate of inflation since 1999, and is forecasted to continue on this trend for the next few years.
Total cost of delivered electricity in 1999 dollars (1999 to 2016). $180
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$160 Generation
$140
Distribution
$120
Other Transmission
$100
1999 Price
$80 $60 $40 $20 $-
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: AltaLink internal analysis. 2015 Alberta electricity industry study, March 2015, EDC Associates Ltd.; AUC regulatory filings – Alberta transmission facility owners and distribution facility owners.
Investment in the transmission system significantly enables competitive energy supply in Alberta’s electricity market, reducing energy costs for all consumers.
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Excellence in action Through our Voice of the Customer program, we understand our customers demand a reliable, affordable and safe transmission system. This understanding drives us to continuously improve, by developing new programs and initiatives to benefit all electricity ratepayers.
Driving cost savings for customers through innovation
For a second year in a row, we realized $100M in cost savings through value engineering.
Our innovation is making a difference in how we build projects and operate our transmission system. We call it value engineering. For a second year in a row, we realized $100M in savings through value engineering. Recently, AltaLink identified an alternate connection configuration that eliminated the need for an entire substation, saving the customer over $20M. Another example of our value engineering are two projects that were energized with a modular substation, resulting in a 10-15 per cent cost savings over traditional substation designs.
Planning with a purpose Electricity outages cost our customers money. We are striving to improve our customers’ experience through a well-planned maintenance program for the life cycle of their transmission connections, to minimize required outages. Our maintenance program includes using a mobile substation during planned and unplanned outages. The mobile substation ensures minimal disruption of service to our customers.
Operating in the top decile AltaLink provides 25 to 30 per cent more reliable service than the average of our Canadian Electricity Association peer companies.
Using a modular substation resulted in a 10 to 15 per cent cost savings.
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)
25 to 30 per cent more reliable than the Canadian Electricity Association companies’ average.
AltaLink Reliability
SAIFI/SAIDI
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SAIFI* AltaLink CEA
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SAIDI** AltaLink CEA
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Zero indicates a perfect reliability record * Interruptions per delivery point ** Load interruption hours per delivery point Note: CEA results for 2014 not yet available AltaLink consistently delivers a more reliable transmission system compared to other Canadian operators.
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2010-2014
New ways of doing business AltaLink is making strides to improve the experience for new distribution, generation and industrial customer connections to the transmission system. We have worked with industry partners to provide our customers with schedule enhancement and service options to best serve their needs.
Reducing the time it takes to connect We have heard the concerns our customers have on the length of time it has been taking to connect to the grid. Over the last two years, AltaLink and our industry partners and regulators have worked together to make changes. Although some of these changes are in process, AltaLink has reduced the time to add a new connection for an existing substation by 37 per cent, and to build a brand new substation by 25 per cent, compared to 2012 averages. While we still have work to do, we are making progress in reducing the cycle times.
Since 2012, a 25 per cent reduction in the time to design, permit, build and energize a new substation for a connecting customer.
Brownfield vs. Greenfield year-over-year trend. 50
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Brownfield projected timelines Greenfield projected timelines 2014 - Target
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Linear (Brownfield projected timelines) Linear (Greenfield projected timelines)
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Providing options to our customers We understand that customers want choice. In 2014, a change to regulations was made that allows customers to choose whether their connection is planned, permitted and built by transmission facility owners such as AltaLink, or by themselves. AltaLink fully supports this customer choice, and works to ensure a smooth transition of these facilities for ongoing operations and maintenance. AltaLink also offers customers with connection options through the family of services we call MPower. For customers who want more collaboration on the schedule and approvals of their transmission connection project, we offer MPower Connect. The high degree of collaboration between the customer and AltaLink, especially in the early stages of a project, has proven to reduce time to energization. Whether it’s by reducing costs or creating a more reliable, efficient system, innovation during the construction, operation, and maintenance of our transmission facilities delivers benefits to all customers.
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Safety for all Safety is a core value at AltaLink. We are committed to the safety of our employees, the general public, and the electricity professionals at our customer sites. We provide training and share best practices with our employees and contractors. To keep our customers safe around AltaLink equipment, we host training seminars for our customers’ field employees on working around high voltage equipment and isolation practices. AltaLink is a member of the Joint Utility Safety Team (JUST) along with other Alberta utility companies and the Government of Alberta, to collectively affect change in public attitudes and behaviours toward power line safety. Our employees worked 2,899,341 hours without a lost time incident throughout 2013 and 2014. In November 2014, AltaLink received the bronze award for the Canadian Electricity Association’s Vice President’s Award of Excellence for Employee Safety for our 2013 safety record. Our safety performance continues to be better than the Canadian Electricity Association’s (CEA) national average for transmission company’s year-over-year.
*AIFR
AltaLink Safety 2.5 2 1.5 1 0.5 0
AIFR* AltaLink CEA national average
2009
2010
2011
2012
2013
2014
Zero indicates a perfect safety record. *A ll Injury Frequency Rate (AIFR) = number of lost time or medical aid incidents per 200,000 man hours worked by employees. Note: CEA results for 2014 not yet available.
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In 2014, there were only three public power line contacts on the AltaLink transmission system and no public injuries.
AltaLink employees worked 2,899,341 hours without a lost time incident throughout 2013 and 2014.
Berkshire Hathaway Energy’s commitment to excellence Berkshire Hathaway Energy is a global energy leader, with a vision to be the best energy company in serving customers, while delivering sustainable energy solutions. Berkshire Hathaway Energy has committed to reinvesting 100 per cent of AltaLink’s profits back into Alberta and Canada. Add to this their global best business practices and top-tier customer satisfaction ratings, and the result is a partnership that will benefit AltaLink’s customers and all Albertans. Berkshire Hathaway Energy companies, including AltaLink, share six core principles, which define our values and vision today and for the next 100 years.
We are focusing on delivering reliability, dependability, fair prices and exceptional service to our customers.
We equip employees with the resources and support they need to be successful. We encourage teamwork and provide a safe, rewarding work environment. We make no compromise when it comes to safety.
Natural resources are essential for the production of energy. We are committed to using these resources wisely and protecting our environment for the benefit of future generations.
We adhere to a policy of strict regulatory compliance and pursue frequent, open communication with regulators regarding our business performance.
Together with our employees, we pride ourselves on excellence in every aspect of our work. Our high standards for operations and system maintenance enable us to meet and exceed our customers’ expectations, perform our work safely, and preserve our assets.
We are excellent stewards of our substantial financial resources. Backed by Berkshire Hathaway, we invest in hard assets and focus on long-term opportunities that will contribute to the future strength of the company.
MidAmerican Energy Holdings Company ranks number 1 in the U.S. for overall customer satisfaction among large commercial and industrial customers of electric utility companies.
For nine consecutive years, Berkshire Hathaway Energy’s Northern Natural Gas and Kern River Gas Transmission have ranked first in customer satisfaction.
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2611 – 3RD AVENUE SE CALGARY, AB T2A 7W7 WWW.ALTALINK.CA 1-866-451-7817
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