U.S. Bank Makes Bid For Alberta Power

The energy-trading wing of Morgan Stanley Dean Witter & Co., an enormous New York-based investment bank, has applied to export as much as 2.3 million megawatt-hours of electricity annually from Alberta.

"Morgan Stanley (Capital Group Inc.) proposes to export electricity from the province of Alberta to the province of British Columbia, and then export electricity from (B.C.) to the United States," the company said in its May 3 application to the Canadian National Energy Board.

The trading house would buy power from Alberta generating units, especially from low-cost coal-fired plants. That prospect angers some environmentalists.

Morgan Stanley spokeswoman Judy Hitchen declined to give the names of its U.S. electricity buyers, but they are likely to be in energy-starved California, Oregon and Washington.

If approved, the licence would be good for 20 years. Alberta's maximum power generation capacity is about 72 million megawatt-hours per year, making the Morgan Stanley portion about three per cent of the total. The company may export less than the licensed amount.

Alberta regulatory rules allow for electricity exports from the province only when there is a surplus, usually in non-peak hours. Nevertheless, there will be multiple repercussions, said Brian Staszenski of the Environmental Resources Centre in Edmonton.

"It means digging up our farmlands and giving us the emissions" from coal-fired plants, Staszenski said.

The province's transmission administrator, ESBI Alberta Ltd., is also studying ways to increase the number of export-driven high-tension lines.

Staszenski and others are meeting with lawyers Monday to plan a strategy of opposition. "This should go to the public in a big way," he said. "It's all being put together piecemeal."

A public review must gauge Alberta's real needs, as well, Staszenski said. Both Epcor and TransAlta, for example, propose major additions to their Lake Wabumun coal-fired plants. If they are being built solely to feed export markets, that should be aired, he said.

Morgan Stanley will not be alone in the business of exporting.

There are more than 10 licensed exporters already, said Eugene Choonen, market analyst for the National Energy Board. They include Alberta firms like Atco Electric, TransAlta Inc., TransCanada Power, Enmax Energy and Engage Energy.

But others are Canadian subsidiaries of large U.S. brokers: Enron, Duke, Aquila (UtiliCorp), Mirant (Southern) and Dynergy.

Last week, a coalition of three firms -- Siemens, Bechtel and AEP -- confirmed plans for two new 150-megawatt export-import links to Saskatchewan.

Choonen said it will take about three months for the NEB to review Morgan Stanley's application, its first foray into Canadian electricity exports.

The trading firm is preparing for future contracts, Hitchen said.