AltaGas short-circuits BC Hydro
By Scott Simpson
Proponents of independent power project in B.C.’s northwest have quit Hydro’s bidding process
Proponents of a major independent power project in northwest British Columbia have quit BC Hydro’s bidding process in favour of cutting a power sales deal directly with the provincial government, documents show.
And it appears the negotiations are tied into a deal to kick-start construction of the oft-proposed $400-million Northwest Transmission Line.
AltaGas Income Fund is proposing a near-doubling of the generating capacity it originally envisioned from the Forrest Kerr hydro project on the Iskut River — one of a trio of projects the company has in the area, according to recent filings with the B.C. Environmental Assessment Office.
The Forrest Kerr project was approved in 2003 but never built.
AltaGas submitted the project as part of Hydro’s 2008 call for new sources of renewable electricity.
Based on the company’s successful completion this month of the Bear Mountain wind park at Dawson Creek, it looked like a safe bet for Forrest Kerr to be selected.
AltaGas is now seeking an amendment to the project’s EAO certificate that would allow it to divert 70 per cent more water from the Iskut River and increase generating capacity at Forrest Kerr from 115 megawatts to 195.
More power from Forrest Kerr would mean more revenue for AltaGas. But it would also enable the company to help fund a new transmission line that has been stalled since November 2007 when NovaGold and Teck Mining pulled out of a commitment to invest $158 million.
Finance Minister Colin Hansen said in September that as much as $90 million could be coming in private sector investment for the northwest line.
Both the independent power sector and the mining sector have indicated the line is vital to development of the northwest.
The provincial government has announced on several occasions its intention to build transmission into the area, but the project languished until September 2009 when Prime Minister Stephen Harper announced in Washington, D.C, that the federal government would contribute $130 million to the line.
“Having considered the implications of these developments, AltaGas has decided to withdraw its proposals for the [northwest] projects from the clean power call,” AltaGas said in a Nov. 5 filing to stock market regulators.
“Since withdrawing, AltaGas has sought and obtained the Province of British Columbia’s agreement to engage in negotiations with the Province of British Columbia with a view to finding a mutually beneficial outcome regarding the [northwest hydro] projects and the NTL (northwest transmission line).”
In an email, AltaGas Income Trust chairman and CEO David Cornhill confirmed discussions are underway but declined to elaborate.
“As with all commercial discussions, we are not in a position to comment further,” he wrote.
BC Hydro referred questions about the negotiations to the provincial government.
Blair Lekstrom, Minister of Energy, Mines and Petroleum Resources, declined to comment on the details of discussions with AltaGas, noting that Hydro and BC Transmission Corp. are also involved.
“We’ve always said we wanted to speak with any individuals that are interested in a partnership on the northwest transmission line if they wanted to come to the table,” Lekstrom said in an interview.
“If we were to ever reach an agreement I will be the first to be out there because it’s something we’ve said we want to do. If we are successful in that type of negotiation I think it’s good news for everybody.
“The other thing is, for anybody that would utilize that line, the reality is that you pay at the front end or you pay at the back. If the opportunity is there to have a good negotiation at the front end of that and allow these projects to proceed ... I’m hopeful, but I can’t add a lot more.”
© Copyright (c) The Vancouver SunPosted by Arthur Caldicott on 14 Nov 2009