Independent power producers hopeful

Vancouver Sun
Scott Simpson
October 27, 2004

COMMENT:With the Independent Power Producers, the Ministry of Energy and Mines, and BC Hydro all on side with opening up BC for IPP generation, watch out! IPP opportunities are just as attractive to the sharks, scam artists, stock promoters and general incompetents as are, well, classic mining as practiced for decades on the Vancouver Stock Exchange, or coalbed methane as it appears it is about to be practiced here in BC in places like Campbell River or Hudson's Hope.

We're not saying it's all bad. Small entrepreneurial companies have dollar-for-dollar, a gazillion times the creativity and entrepreneurial oomph of a Hydro technocrat or Ministerial bureaucrat. —Arthur Caldicott

Independent power producers are carrying high hopes for a surge in business opportunities into an annual conference that begins today in Vancouver.

Both Energy Minister Richard Neufeld and BC Hydro CEO Bob Elton have been making signals in recent days that indicate greater opportunities are looming for private-sector companies to join Hydro's grid.

Now, Independent Power Producers Association of B.C. president Steve Davis is hoping that those signals herald accelerated growth and a stable investment climate -- something that he said is lacking in the independent power sector.

Last Friday, Elton told the Vancouver Board of Trade that he wants B.C. to lessen its dependence on imported electricity -- with "more regular calls" to independent power producers (IPPs) to add new projects to the grid.

A day earlier, Neufeld said he wants to see opportunities open up that would build a strong IPP community in the province.

Davis said the IPP sector recently suggested that Hydro issue annual calls in the neighbourhood of 1,200 gigawatt hours.

In four years, he said, those annual calls would draw in enough new electricity generation to cover the amount of electricity that B.C. usually imports in a given year.

"Imports are pretty expensive and they're pretty comparable to the price of our power," Davis said. "When you net off the resource revenues and taxes that various levels of government collect from IPPs, we're significantly less expensive than imports."

Hydro officials address the conference on Thursday.

If they indicate that Hydro is prepared to commit to a regular call for tenders it will improve the ability of independent project developers to attract investment cash, Davis said.

Hydro has issued several calls for so-called green energy projects, but Davis said the sector is capable of providing far more energy than what Hydro has been seeking.

"By having an annual call that is quite likely and reliable, it allows all of the parties in the electricity industry to start to plan."

One prospective IPP project developer, Donald McInnes of Plutonic Power, said his company has an ambitious series of green energy projects -- but needs a signal from Hydro to take them to the next level.

"At this point our company doesn't have an energy purchase agreement in place," McInnes said. "We're waiting for Hydro to formally announce a call. And we're trying to influence Hydro directly, and through the MLAs and everybody else, on the size of the call."

Vancouver Sun