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1 Decision Algar Lake Project Distribution System Exemption March 28, 2013

2 The Alberta Utilities Commission Decision : Algar Lake Project Distribution System Exemption Application No Proceeding ID No March 28, 2013 Published by The Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 The Alberta Utilities Commission Calgary, Alberta Decision Application No Algar Lake Project Distribution System Exemption Proceeding ID No Application 1. (GOS), by Application No , registered on March 8, 2013, filed a letter of enquiry with the Alberta Utilities Commission (AUC or the Commission) under Section 11 of the Hydro and Electric Energy Regulation. GOS requested that the previously granted exemption, pursuant to Section 24 the Hydro And Electric Energy Act, for its Algar Lake Steam Assisted Gravity Drainage (SAGD) Project site in the Fort McMurray area, be extended in scope to include the following: Extension and construction of a 4,160-volt (V) cable along the north perimeter of the main production facility (MPF). Relocation of a 4,160/600-V, 500-kilovolt-ampere (kva) transformer to the northeast corner of the MPF. 2 Background 2. GOS is in the process of developing the Algar Lake SAGD Project (the Algar project), located approximately 40 kilometres southwest of Fort McMurray. GOS has approval, by Approval No. U , 1 to construct and operate a 15-megawatt power cogeneration facility. The power will be used solely for the Algar project and an exemption was granted to GOS, in Decision , 2 to operate the associated 600-V distribution lines that will serve the electrical requirements both on-site and at four nearby well pads. 3. The decision specified the following details: The proposed power plant and the nearby off-site load are located on lands which GOS has been granted surface rights, under Miscellaneous Lease, thus showing tenancy within the lease area where distribution facilities will be located. 3 There are no dwellings within 2,500 metres of the proposed development. 4 The noise impact assessment was completed for the entire Algar project which included the proposed power plant and two backup diesel generators. Results indicated that the Power Plant Approval No. U , Application No , Proceeding ID No. 1870, August 31, Decision : Algar Lake 15-MW Cogeneration Power Plant, Application No , Proceeding ID No. 1870, August 31, Decision , paragraphs 10 and 26. Decision , paragraph 11. AUC Decision (March 28, 2013) 1

4 Algar Lake Project Distribution System Exemption projected noise levels will comply with the requirements of AUC Rule 012: Noise Control (AUC Rule 012). 5 The Commission accepted that the proposed development is expected to have minimal environmental impacts (as the gas turbines would be installed within the MPF buildings at the Algar project site) and will meet Alberta Ambient Air Quality Objectives. 6 The Commission found that GOS had provided information to indicate there is no public highway on the lands over which the electric energy will be distributed. 7 Exemption, pursuant to Section 24 of the Hydro and Electric Energy Act, was granted to GOS to own and operate the proposed 600-V distribution system. 8 3 Discussion 4. GOS stated that during the detailed engineering phase it was recognized that, by extending the MPF internal 4,160-V distribution system to a location immediately adjacent to the MPF and close to the well site loads, an improvement to the distribution system could be achieved. The improvement areas would be as follows: Reduced voltage drop on the system to the well pad sites. Reduced operating losses on the system to the well pad sites. Reduced voltage sag during motor start. 5. GOS submitted that the construction of the 4,160-V cable and the relocation of the transformer (the alterations) would occur within the originally approved site boundaries and would be installed in accordance with standard industry practice. Specifically, the proposed 4,160-V cable would be installed in a common tray with the already approved 600-V cable system and the 500-kVA transformer would be relocated adjacent to the MPF. 6. GOS also submitted that no incremental environmental impact will result from the proposed alterations as no new lands would be impacted. 7. The 500-kVA transformer which was originally proposed to be located within the MPF, was not identified as a major noise source in the noise impact assessment in the original application 9 and thus it is not considered a significant noise source within the approved project. The relocation of the transformer to its proposed location is therefore not expected to alter the predicted noise levels. 8. There is no change to the site location or the ownership of the land over which the electric energy will be distributed Decision , paragraph 17. Decision , paragraph 19. Decision , paragraph 27. Decision , paragraphs 28 and 30. Proceeding ID 1870, Exhibit AUC Decision (March 28, 2013)

5 Algar Lake Project Distribution System Exemption 4 Findings 9. Based on the information submitted by GOS, the Commission finds: No other persons would be directly affected by the proposed alterations as there are no dwellings within 2,500 metres of the Algar project site. The proposed alterations do not include additional sources of emissions and, therefore, will not alter the air quality assessment. The proposed alterations will not alter the predicted noise levels and, thus, the project remains in compliance with the requirements set out in AUC Rule 012. No adverse environmental impacts will be caused by the proposed alterations. 10. As there is no change to the site location or the ownership of the land over which the electric energy will be distributed, the exemption, pursuant to Section 24 of the Hydro and Electric Energy Act, granted to GOS in Decision , remains valid. 5 Decision 11. The Commission approves the application and grants the exemption, pursuant to Section 24 the Hydro And Electric Energy Act, which is extended in scope to include the 4,160-V electric distribution system. 12. The Commission may cancel or suspend this exemption, in whole or in part, in accordance with Section 41 of the Hydro and Electric Energy Act or may review this exemption, in whole or in part, upon its own motion or upon an application by an interested party, in accordance with Section 10 of the Alberta Utilities Commission Act. Dated on March 28, The Alberta Utilities Commission (original signed by) Tudor Beattie, Q.C. Commission Member AUC Decision (March 28, 2013) 3