News coverage of Duke Point EPA approval
BC Hydro and its private-sector partner can proceed with plans to build the Duke Point electricity plant to serve Vancouver Island, the B.C. Utilities Commission (BCUC) ruled Thursday.
The commission approved Hydro's proposed 25-year purchase agreement with Duke Point Power, saying the project creates enough electricity capacity to stave off a projected shortfall and the threat of brownouts on the island in the winter of 2007-'08.
"We're pleased that the commission heard all the evidence and weighed it carefully, and has allowed this electricity purchase agreement, and sees it in the public interest," said Bev Van Ruyven, Hydro vice-president for distribution.
The 262-megawatt natural gas-fired plant will be built near Nanaimo at a cost of $285 million.
That cost will be borne by Duke Point Power, and does not include $120 million that Hydro itself invested in an earlier, failed attempt at the project.
Opponents of the plant include citizens' groups, pensioners, and B.C.'s main resource industries, which argued in a hearing before the commission that Hydro should seek less expensive alternatives.
The Joint Industry Electricity Steering Committee, representing forestry, mining and electro-chemical companies, estimates BC Hydro customers will pay out about $4.5 billion for Duke Point over the 25-year deal -- with the cost of natural gas representing the project's greatest expense.
The BCUC decision "is subjecting all BC Hydro customers to unacceptable high levels of cost and financial risk" according to the industry steering committee, which is concerned the adverse impact that rising gas prices could have on the province's biggest businesses.
The committee says Hydro's fixed costs will increase $60 million a year, boosting electricity rates for all customers by at least two per cent.
Representatives of GSX Concerned Citizens and the industry steering committee both indicated they will resort to the courts in a last-ditch attempt to derail the project, with both groups alleging that the BCUC decision was biased.
"We think the thing doesn't make any sense and we are planning to file an appeal as soon as we can get the paperwork together, which is probably next week," said JIESC executive director Dan Potts.
In 2003, the utilities commission had rejected a plan by BC Hydro to build and operate a plant that is virtually identical to the one it approved Thursday. However the earlier plan cast Hydro as the proponent, while the revised project will be carried out by an Alberta-based company.
In a news release, the commission said it "has a mandate to ensure cost-effective reliable electricity service on Vancouver Island." The commission did not release its reasons in support of the decision, saying those will follow "in a couple of weeks."
In an interview, BCUC executive director Bill Grant said the commission is moving quickly because it is mindful of Hydro's desire to have the plant in place well before the winter of 2007.
He noted that it would take a combination of unfortunate events, including a sustained cold spell, to precipitate a brownout in the 2007-'08 winter -- but said the commission is not willing to take that risk.
"The commission's focus on reliable supply to Vancouver Island was one of the key drivers in terms of promising to review, and determine whether it could approve or not the energy project agreement between the two parties," Grant said
By 2008, the B.C. Transmission Corp. is expected to replace the existing, aging lines, diminishing the risk.
Tom Hackney, president of GSX Concerned Citizens Coalition, found it ironic that Hydro and the BCUC committed B.C. to a project that will annually produce more than 900,000 tonnes of greenhouse gases the day after the world celebrated the Kyoto Accord to reduce greenhouse gas emissions.
Speaking for the Duke Point partnership, Pristine Power president Jeffry Myers said in a news release that the project is "the most cost-effective source of dependable capacity for Vancouver Island."
He said 200 jobs will be created in Nanaimo during construction of the facility, 16 permanent jobs, and $8 million in annual local spending.
Construction will also drive $40 million in new spending into the community, and more than $8 million in local spending every year.
DUKE POINT POWER PLANT:
Electricity capacity: 262 megawatts
Customers served: Duke Point meets 10 per cent of Vancouver Island electricity needs.
Cost of Duke Point plant: $285m
Impact on BC Hydro customers: electricity rates to rise two per cent by 2007
Length of deal: 25 years
Cost of plant over life of deal, estimated: $4.5 billion
Construction jobs: 200
Permanent jobs: 16
Source of natural gas for Duke Point: Terasen Gas
© The Vancouver Sun 2005
Andrew A. Duffy
The B.C. Utilities Commission Thursday gave life to the Duke Point Power Project in Nanaimo by approving an electricity purchase agreement between B.C. Hydro and Pristine Power, the company that will build the plant.
The commission approved a 25-year agreement that will see Hydro pay Pristine $45 million annually to provide electricity from the $280 million, 252-megawatt plant. It will be fuelled by natural gas.
"We're obviously pleased with the decision," said Bev Van Ruyven, senior vice president of distribution for Hydro.
"We felt we did a good job of presenting our evidence."
Hydro says the Duke Point project is the best way to provide customers with the reliable capacity required to meet Vancouver Island's anticipated supply shortfall in 2007 when some of the undersea electricity cables that run from the mainland and are deemed unreliable.
Pristine's project, which Hydro announced as the winning bid in its call for tender process in November, replaces the Vancouver Island Generation Project, a 265-megawatt plant Hydro intended to build on the same site at a cost of $370 million.
That project was originally rejected by the utilities commission as too large and costly a means of making up the Island's energy shortfall, prompting the call for tenders.
"We're thrilled the commission has ruled in favour of the project," said Harvie Campbell, vice-president of Pristine.
"We thought the evidence was more than just compelling."
But it still hasn't convinced opponents of the project who were lining up Thursday to file appeals.
"The decision is not a surprise but it is a disappointment, and the (Georgia Strait Crossing Concerned Citizens Coalition or GSXCCC) intends to instruct its counsel to proceed with an appeal to the B.C. Court of Appeal," said the organization's president Tom Hackney. He said they would appeal on the basis of apprehension of bias.
The coalition claims the Duke Point Project locks consumers into 25 years of expensive and polluting power, and the Island's needs can be met by upgrading existing transmission lines in combination with more careful management of industrial use of power.
During the hearings, the coalition sought to disqualify the utilities commission panel because of an in-camera discussion the panel had with B.C. Hydro representatives. According to the coalition, that meeting showed the panel prejudged the outcome of the hearing before receiving arguments and cross-examination from intervenors.
The motion was dismissed at the time.
"We think we have serious and substantive grounds for appeal," Hackney said Thursday.
Hard on their heels was the Joint Industry Electricity Steering Committee which made it clear their appeal will be filed next week.
"We are very disappointed by
the BCUC decision and we will be appealing the ruling to the appropriate court in the next several days," said
committee executive director Dan Potts. "Not only did the evidence fail to support the Duke Point project, the regulatory
proceeding lacked the required fair-
ness. The perception of bias and procedural unfairness, at this point, are the issues that form the legal basis of our appeal."
Hackney said when they file an appeal they are likely to ask for a stay of the electricity purchase agreement, meaning the plant would be in limbo until a decision is handed down.
Neither Hydro nor Pristine could say what an appeal would mean for the timeline of the project, though Van Ruyven said it would cause Hydro some concern.
"We hope it happens in an expedited way because it does raise some issues for us," she said. "The risk for us is reliability (of supply)."
Pristine could face more of the risk in an appeal as they are now under contract to deliver the plant in service by May 2007. That's a 24-month window, which the company has said provides some slack as it has built similar plants in 18 months.
"Right now we're not anticipating any impact in our schedule, but as with any kind of delay it may have an impact on our being able to nail the deadline and that could have an effect -- people will be without power," said Campbell.
At this point, Pristine expects work to start at the Duke Point site as early as this spring.
The chairman of the utilities commission panel, Robert Hobbs, did not provide reasons for the approval. They are expected to be released in the first week of March.
VANCOUVER – Plans for a controversial gas-fired power plant at Duke Point south of Nanaimo have passed its last major regulatory hurdle.
Hydro had planned to build its own plant at Duke Point. But the BCUC rejected that proposal and told Hydro to look to the private sector for a supplier instead.
Now the Commission has approved Hydro's plan to buy electricity from a plant to be built by Duke Point Power.
Hydro senior vice-president Bev van Ruyven says she knows there will be continued opposition to the public-private partnership project.
But she says Vancouver Island needs a new power plant to avoid a shortfall of electricity in 2007.
"We've got to keep the lights on on Vancouver Island, and we really are running out of time and butting up against that winter '07 date," she says.
The Utilities Commission had held hearings on the Duke Point proposal earlier this winter.
Opponents of the power plant are already planning to appeal the decision. Tom Hackney of the Georgia Strait Crossing Concerned Citizens Coalition says it's a mistake to build another plant that will add to greenhouse gas emissions.
"We're disappointed but not surprised. The GSX Concerned Citizens Coalition continues to believe this is the wrong project to meet Vancouver Island's needs," he says.
Hackney says short-term needs can be met by transmitting power over new lines being built from from the Lwer Mainland – and the long-term needs by developing alternative energy sources on the island.
The developers say they hope to break ground as early as next month.
VICTORIA (CP) -- A controversial proposal to build a gas-fired electricity plant at Duke Point, near Nanaimo, is one step closer to reality.
The B.C. Utilities Commission has approved a contract between B.C. Hydro and the Duke Point Power Limited Partnership.
The plan calls for a 262-megawatt power plant that would be in service by 2007.
Hydro says the natural gas-fired generator is needed to meet Vancouver Island's increasing demand for electricity.
A Hydro spokeswoman says the utility recognizes there are still risks and more hurdles, including a strong chance the utilities commission decision will be appealed.
But a coalition of industrial power users questions the decision to advance the project.
Building a gas-fired electrical generating plant on Vancouver Island defies logic, says the Joint Industry Electricity Steering Committee.
"We are very disappointed by the (commission) decision to grant approval to proceed with the Duke Point project and we will be appealing the ruling to the appropriate court in the next several days," executive director Dan Potts said in a news release.
"Not only did the evidence fail to support the Duke Point project, the regulatory proceeding lacked the required fairness. The perception of bias and procedural unfairness, at this point, are the issues that form the legal basis of our appeal."
The project puts Hydro customers at unacceptable risk of high levels of cost and financial risk, the lobby group said.
It will increase Hydro's annual fixed costs by about $60 million a year. Even before operating costs are included, customer's rates will increase by more than two per cent, the committee claimed.
The group argued that a planned new transmission line from the B.C. mainland, scheduled for completion in 2008, will address Vancouver Island's additional power needs in the short term and there are other options to meet future demands.
© Canadian Press 2005
It may seem odd that with gas prices sure to rise in future, and the same week that the Kyoto protocol came into effect, the construction of a 252-megawatt gas-fired plant to provide reliable energy to Vancouver Island should receive regulatory approval.
But what other choice is there? B.C. Hydro, which has made the agreement with the private partnership that will build the $280-million plant, says the Island's peak demand forecast for 2007 has already been reached.
Alternative energy sources such as wind, solar and micro-hydro production from waterfalls can't provide a dependable capacity. Burning wood waste would be a very bad choice environmentally.
The cables carrying power from the mainland are nearing the end of their life, and it's too risky to rely on customers to shift peak demand.
We don't have time to waste -- though appeals must be allowed to take their course. This is a 25-year deal. If by then we find a better way of meeting the Island's peak demand, we can look at it then.
We need Duke Point on line by May 2007 as promised, or winters are going to be awfully dark around here.
Posted by Arthur Caldicott on 18 Feb 2005