Dear Editor,
I would like to respond to two letters from April 25.
To begin, I will address Nick Furguel’s questions, the first one asking who is paying for this Project. TC Energy and Saugeen Ojibway would share responsibility to build the Project and put it into operation. Once operating, the Project is expected to receive payments via a cost-of-service structure at the Ontario Energy Board (OEB), known as rate regulation. Rate regulation at the OEB is a proven, transparent, public process that ensures that electricity ratepayers’ interests are safeguarded and ensures a just and reasonable return to compensate for the cost of providing the capital to build and operate the facility.
Regarding Nick’s question about the destination for the material excavated for the reservoir, our objective is to balance material excavated with the material requirements of construction. Ideally, we would use as much of the excavated material as possible from the reservoir, underground powerhouse and tunnels for construction of the reservoir berm. Several factors contribute to this optimization including the design of the reservoir, size of the powerhouse and the underground tunnels and the quality of the excavated materials. Further information will be available following the completion of feasibility studies, and engineering design, all part of the upcoming assessment processes.
As for timelines, we anticipate that the Federal Impact Assessment and Provincial Environmental Assessment processes would begin later in 2024, taking approximately three years to complete. Should the Project receive the required approvals, construction would occur over a four-year period. We anticipate that commercial operation of the Project would begin in 2032.
With respect to the need for the Project – in March, the Independent Electricity System Operator’s (IESO) Annual Planning Outlook was released – this report forecasts Ontario’s electricity demand and capacity and energy needs, over the next 25 years. The forecast continues to show steady electricity demand growth year over year, with total demand increasing 60% over the next 25 years. The future needs of Ontario’s system are large and increasing – I would encourage your readers to read this report for themselves (available on the IESO website).
To provide further context, Ontario’s population grew by 450,000 people last year – that number is expected to continue to grow. Simultaneously, Ontario is electrifying – electric vehicles, heat pumps, electric transit, clean steel making, and new major manufacturing investments are all adding demand. Further, the Government of Canada is prioritizing efforts to combat climate change, with the goal of achieving a net-zero electricity grid by 2035. This will require Ontario to eventually close its gas fired generation and replace it with new clean electricity through sources like renewables, nuclear, and hydro. Ontario’s emissions-free electricity system will need significant amounts of long duration energy storage to deliver electricity during periods of peak demand.
I’d also like to respond to George Czerny’s letter. We appreciate your question regarding housing availability, and specifically the options for housing workers during the construction phase of the Project. This will be a major focus of future phases of the project development where we will comprehensively examine all aspects of workforce need and capacity, map anticipated travel for the construction workforce and the potential for associated accommodations. A recent study by Canadian Centre for Economic Analysis (CANCEA) reviewed the economic and social benefits of the Project and provides some sense of the overall employment impacts. The study is available at: www.ontariopumpedstorage.com.
Consistent with our hire and buy local objective, wherever possible, we will maximize local and regional workers, to lessen need for accommodation and will work closely with municipal governments, labour experts, and community service providers to accurately measure capacity and needs for potential housing arrangements.
I want to thank your readers for their continued interest. We welcome feedback and encourage anyone interested to reach out with their questions or visit our office.
Sincerely,
John Mikkelsen, TC Energy
