City’s south-end substation locations rejected by AUC

Posted on June 22, 2023 by Ryan Dahlman

By Collin Gallant
Southern Alberta Newspapers

Regulators have denied both a preferred and alternate location for a substation that the City of Medicine Hat needs to better regulate and expand power delivery to the south end of town.

An Alberta Utilities Commission panel sided with Cypress County residents who had mounted opposition arguing the “industrial” nature of the substation would detract from property value while the city hadn’t proved the need or fully considered other locations.

The result of the hearing, released last week, puts the $24-million project on hold, though city officials say they will “aggressively recommence” the application process.

“Continued growth and development on the south side of our city requires a substation in this area,” said Coun. Alison Van Dyke, chair of the energy and infrastructure committee. “We understand the concerns and disappointment that will arise because of this decision. We will be aggressively recommencing the process in order to meet the needs of our community.”

City manager Ann Mitchell said, “Our next step is to thoroughly review the decision report and consider our next steps.”

The city had begun formally planning for the substation in 2019, eventually narrowing down two sites from eight potential locations between the city’s river valley power plant and lines connecting the south end along S. Boundary Road.

That led to controversy, disagreement and behind-the-scenes lobbying between groups of county residents, Cypress County, the city’s electric distribution department and elected officials.

The city formally applied for approval in June 2022 stating the new equipment at the southwest corner would boost capacity in the area. It would also prevent the need to route power through other areas, thereby improving reliability throughout most of the city.

The preferred site was located off a service road that forms the city limits near the Highway 3 entrance to Medicine Hat.

The alternate site was in a hay field owned by Hatview Dairy north of S. Boundary Road, near the corner of Range Road 61A, which provides access to the county subdivision of Desert Blume.

Some Desert Blume owners were granted standing at the hearing along with alternate site owner Hatview Dairy.

Cypress County as well presented at the hearings.

Jim Jackson, who lives across the road from the preferred Highway 3 site, led a group of neighbours in opposition. He purchased the lot for the potential site during the city’s consultation process with the stated goal of developing the triangular lot as a county-style subdivision.

That occurred during negotiations to purchase the plot between the former owner and the city. Legal representatives for the city implied that was likely done to scuttle the site considering the city’s standing policy to work with owners on infrastructure siting. Shortly thereafter the city made its application to the AUC.

“The city’s site selection methodology, in particular the availability of an owner willing to sell, was disregarded and inconsistently applied to the two proposed sites,” read the decision. “Further, based on the information provided by the city with respect to its siting criteria and methodology, it is unclear to the commission that other sites, including those considered and eliminated by the city, would not represent a lower overall impact.”

City officials also said that needs assessments in the department were scheduled on a rolling basis and the MHS11 was next in the queue, and the area was subject to increased “commercial, industrial and residential” development inquiries in the south end.

The AUC agreed with intervenors argument that city plans to meet power needs were unclear and the need for the facility hadn’t been proven because the pace of development was in the hands of the private sector and the outlook was subject to market forces.

Since there were “no commercial agreements in place … (and) it is clear from the evidence provided at the hearing that the growth in the southwestern portion of the Medicine Hat is not imminent,” read the decision.

The city disagreed with that ruling, stating the rejection could now hamper development.

“The decision will significantly delay the ability to increase a secure power supply in the city’s south, where electricity constraints may impede development,” reads a statement from the city. “Development applications will be evaluated on a first-come-first-served basis and the city will continue to work collaboratively with the development community to minimize the impacts of the decision.”

The city’s electric department had budgeted $24 million to complete the substation. That is equal to cost estimates at the alternate site, which were about $2 million more than the preferred site due to road access and other issues.