The Toronto Star
February 20, 2013
Toronto Hydro makes pitch for $272 million transformer project
A $272 million transformer project is needed in downtown Toronto to forestall the possibility of a months-long outage that would “impair the image of Toronto as a leading urban centre,” says Toronto Hydro.
But skeptics at an Ontario Energy Board hearing that opened Tuesday are questioning whether the company has justified the need for the expensive project. The hearing continues Wednesday.
Toronto Hydro says a new $195 million transformer station is needed on Bremner Blvd., near the Rogers Centre, to serve both immediate needs and allow for growth in the city core. An additional $77 million would need to be spent by 2030 to support the new station.
The energy board must approve the project before Toronto Hydro can build it and recover the cost from its customers through their electricity bills.
Toronto Hydro officials say that they need to start work immediately, because its aging Windsor transformer and switching station in the same area, built in 1950, badly needs an overhaul.
But right now there’s nothing to replace the Windsor station when it undergoes its lengthy overhaul. And there’s nothing to back up the Windsor station — which hydro officials say supplies power to nine of the 10 biggest buildings in the city core — if it suffers a big failure.
“Bremner is a core component of our plan to address aging critical infrastructure,” said Toronto Hydro’s Tom Odell.
A consultant’s report filed with the board says repairs of a major failure at the Windsor station could take months. “The time for removal, transport and reconnection of an extremely large and heavy transformer would be up to 90 days or longer,” says the report from Navigant Consulting.
A new transformer station would also allow Toronto Hydro to shift power between the east and west ends of the city, Toronto Hydro officials told the board. That would increase reliability for everyone.
In the meantime, growth in the downtown core, and the demand for new building connections, is growing relentlessly, Toronto Hydro’s Jack Simpson told the board. “There are approximately 189 towers under construction across Toronto currently, and that outpaces Manhattan two to one,” Simpson said.
Looking at the immediate downtown requirements and the long-term growth pattern, “Bremner is needed and it is the only option that makes sense,” he said.
Environmental Defence is questioning whether Toronto Hydro and the OPA have considered whether conservation programs and new clean generating stations inside the city could meet the downtown needs at a lower cost than the new transformer station.
Jack Gibbons, who is working with Environmental Defence, said in an interview that there’s “huge potential” for curbing demand and for adding local generation — if only the OPA will provide funding.
He noted that OPA officials had told the hearing that they would consider funding cost-effective measures.
Gibbons acknowledged that the equipment at the Windsor station must be replaced, and there’s currently no back-up supply to allow the work to proceed.
But he said back-up lines can be installed to other downtown transformer stations at a cost of about $22 million.
“They’re picking the option that is the most expensive,” he said.
He said there’s a financial incentive to do that: if Toronto Hydro spends $272 million, it will be allowed to earn a return of $9.8 million annually on the investment.
The Building Owners and Managers Association of Toronto is also asking questions of Toronto Hydro’s proposals.
The association realizes that a downtown power supply is essential, said Marion Fraser, a consultant working for BOMA and a former key energy advisor to the provincial Liberal government.
She said BOMA’s members aren’t satisfied to date that a sufficiently rigorous analysis has been done.
Building managers could offer much good advice in energy conservation, she said, if only they were asked.
“They would discover all sorts of additional things,” Fraser said in an interview. “Fifty per cent of the savings are in operations, and none of the OPA programs deal much with operations.”