sqwalk.com

Environmental Assessment for Duke Point Power

For people concerned about the Duke Point Power plant, winner of BC Hydro's CFT, it may be advisable to pursue the Environmental Assessment Office environmental certification process as well as the BCUC process:

The BC Utilities Commission is operating under a set of fairly legalistic rules, and they are supposed to be mainly concerned with parties who have shown that they have an "interest" in the project, i.e. who stand to be affected by the project. This means that if, as a ratepayer, you think this will result in your being overcharged for electricity, you have an interest. If you have environmental concerns, the BCUC may well say that that is not their area of concern (since the Environmental Assessment Office is responsible here). If you can argue that, as a ratepayer, your electricity rates are likely to go up as a result of Duke Point's liability for environmental harm, that would, technically engage the BCUC. (That said, the BCUC may have a certain amount of sensitivity to public calls for a conference or review in Nanaimo, so by all means ask for it.)

Regarding environmental concerns, I recommend writing to the Environmental Assessment Office and to the relevant Minister(s) (Sustainable Resource Management; Water, Lands and Air Protection; Energy and Mines) -- whichever are in charge of deciding whether the environmental certificate that was issued for the Vancouver Island Generation Project can be adapted and applied to the Duke Point Power Plant. This is quite a political issue, and enough public input could force a separate environmental review for the new plant.

Duke Point Power is probably writing to the EAO and the Minister right now, asking to have the VIGP certificate shifted to them. There is no mandated public process, no public notifications. So get your views in fast.

GSX Concerned Citizens Coalition

BC Hydro applies for EPA for Duke Point

First Nations report on BC's offshore moratorium

Rights, Risk and Respect
A First Nations Perspective on the Lifting of the Federal Moratorium on Offshore Oil & Gas Exploration in the Queen Charlotte Basin of British Columbia
[ Download PDF ] [ View Table of Contents ]

EXECUTIVE SUMMARY
The First Nations Engagement Process (FNEP) on the question of whether or not to lift the federal moratorium on offshore oil and gas exploration in the Queen Charlotte Basin of British Columbia’s coastal waters was announced by Minister Efford on February 18, 2004. Originally slated to end June 30, the information gathering phase was extended to September 3, 2004. By that time the Minister’s representative Cheryl Brooks and NRCAN’s Zoë Carlson had held
meetings and conversations with representatives of approximately seventy First Nations communities, including the majority of the communities directly adjacent to or near to the boundaries of the Queen Charlotte Basin. Other communities were from the Winona, Tofino and Georgia Basin areas and a few from inland British Columbia.

The numerous First Nations of the Northwest Coast and other coastal communities and inland communities of British Columbia who participated in the FNEP unanimously indicated that it is not in the best interests of their people to lift the oil and gas exploration moratorium in the Queen Charlotte Basin. A small number added the qualifier that “it should not be lifted at this time”.

There are two perspectives contributing to this conclusion. One view is that an
informed decision cannot be made on the basis of currently available information. The second view is that there is enough information available now to definitively conclede that the moratorium should absolutely not be lifted.

Though not one First Nation that met with FNEP endorsed the lifting of the
moratorium, many First Nations indicated a preparedness to more fully explore the issue of offshore oil and gas exploration provided they are adequately resourced and given enough time to do so.

"Priddle Report" on BC's offshore moratorium

Report of the Public Review Panel (the "Priddle Report") on the Government of Canada Moratorium on Offshore Oil and Gas Activities in the Queen Charlotte Region British Columbia
[ Download PDF ] [ View Table of Contents ]

The "Priddle" report fairly represents and summarizes the views presented to the panel. 75% of the public are opposed to lifting the moratorium. Significant knowledge gaps exist. The panel recommends four options to government, and gives no preference to any of them. The four options are:
1. retain the moratorium
2. retain the moratorium and fill the knowledge gaps
3. lift the moratorium, issue no exploration permits, fill the knowledge gaps
4. lift the moratorium

CONCLUSIONS PRESENTED
The Panel concludes in Section 5 that the strongly held and vigorously polarized
views it received do not provide a ready basis for any kind of public policy compromise at this time in regard to keeping or lifting the moratorium. It formed the impression that there had been little recent dialogue among stakeholders and that increasing this dialogue could be helpful. The need to address First Nations interests and concerns was the major area of near consensus. Ecosystem protection was a widely shared priority, but there is
fundamental disagreement on how it could best be achieved: by keeping the moratorium, or by lifting it and relying on a modern regulatory regime.

There was near consensus among participants that there are significant information gaps regarding biophysical data and environmental and socio-economic impacts information for the QCR, were oil and gas activities to proceed. However, participants wishing to keep the moratorium consider it unsafe to lift the moratorium prior to filling those gaps, while participants wishing to lift the moratorium are of the view that the only way to fill those gaps is to lift the moratorium. Information gathering and consensus building activities would serve to reduce areas of disagreement.

RECOMMENDATIONS
The Panel in Section 6 sets out for the Government of Canada’s consideration
options ranging from: keeping the moratorium (Option 1), which would be supported by 75% of those who took part in its process; to keeping the moratorium or deferring the decision on it while undertaking a suite of activities and taking a decision at a future time (Option 2); to lifting the moratorium and undertaking a suite of activities prior to accepting any oil and gas activity applications (Option 3); and to lifting the moratorium (Option 4) which would be supported by 23% of participants. The Panel had not specifically asked participants for views on Options 2 and 3, where the issues in regard to doing further work include: the activities to be pursued; the parties to be involved; and the process for that involvement. In addition to considering these options, the Panel considers that any further studies related to the moratorium should give particular attention to the following matters: environmental effects; fisheries; information issues; technology; hydrocarbon resources; regulatory regime; protected areas; alternative energy sources; the Kyoto Protocol; cultural values; and social and economic impacts. The need to address First Nations concerns is of central importance.

Reliable, cost-effective power for the Island

Bob Elton
Special to the Vancouver Sun
17 Nov 2004

COMMENT: BC Hydro CEO Bob Elton is using his office to help sweep his Call for Tenders (CFT) decision through the BCUC review process. He adds nothing to the discussion. He doesn't address any of the concerns with the Duke Point Project (DPP) that was selected as best-in-class from the CFT.

For example: the CFT was constructed to give DPP, and other proposals that resubmitted BC Hydro's failed VIGP back into the CFT, a $50 million bottom-line advantage. BC Hydro is still taking on all the gas price risk, in an era in which natural gas prices have been at record high levels and promise to go higher in the future.

As Elton presents it here, the BCUC and BC Hydro are working together to rush the DPP project through to a construction start. If the BCUC is to retain any credibility, it will respond positively to those interveners - as diverse as the GSX Concerned Citizens Coalition and the Joint Industry Electricity Steering Committee and conduct a full, open, oral hearing into BC Hydro's application for an Electricity Purchase Agreement

BC Hydro's recent announcement that Pristine Power was the successful proponent in the Vancouver Island Call for Tender (VICFT) process has generated a lot of attention.

And that is understandable -- we have been working on a solution to the Island's electricity problem for over a decade and there have been a vast array of opinions on the best way to do that.

I think that diversity of views has been very valuable, and BC Hydro has learned from it. And we look forward to continued discussion with all interested parties as part of the B.C. Utilities Commission's process to review the outcome of the VICFT, which begins on Nov. 29.

In advance of that process, I thought it might be useful to reiterate some of the principles that guided us through the VICFT.

The first was our primary goal -- to ensure the reliable supply of electricity to our customers on Vancouver Island after 2007. We cannot -- and will not -- compromise on that goal, as BC Hydro has an obligation to serve its customers.

We have known for some time now that obligation was threatened by the deteriorating undersea high voltage direct current transmission cables to the Island that we won't be able to count on after 2007. So we needed to find a solution that was guaranteed to work by that time.

We originally proposed our own solution -- the Vancouver Island Generation Plant. But last year the BCUC -- while agreeing with the problem and timing on Vancouver Island -- decided that ours was not the most cost-effective solution.

That was where the VICFT process came in.

We designed the VICFT based on the recommendations of the BCUC. That included using its determination of what the most "cost-effective" solution would be, as well as hiring an independent, third-party reviewer to ensure the process was fair and competitive.

For the latter, we selected PricewaterhouseCoopers, and it has monitored the process right from the beginning of the VICFT. I am pleased to say that at every step of the process PwC has confirmed the fairness and competitiveness of the VICFT. Its reports on this matter are listed on our website at www.bchydro.com.

It is Pristine Power, then, which has the successful proposal in the VICFT. It will be a 252-megawatt natural gas-fired generating station at Duke Point in Nanaimo that will be in place by 2007. We feel confident this will help ensure we can continue to provide the reliable, cost-effective power our customers need on Vancouver Island.

That is some of the background on our recent announcement. As I mentioned, we look forward to discussing this further with all interested parties as part of the BCUC process that begins on Nov. 29. Working together through this regulatory process will ensure we can continue to meet our obligation to keep the lights on for our customers on Vancouver Island.

Bob Elton is president and CEO of BC Hydro.

© The Vancouver Sun 2004

Nov 26 deadline for EPA review

Fri Nov 19 - BC Hydro expected to file application for EPA with BCUC
Fri Nov 26 - deadline for applications to attend Nov 29 Procedural Conference
Fri Nov 29 - Procedural Conference, 8:30 am, 4th floor, 855 Homer, Vancouver

Action item: write a letter to the BCUC. More info below.

We have just become aware that the BC Utilities Commission is already "expediting" its review of the Electricity Purchase Agreement (EPA) that it expects BC Hydro to file an application for on November 19. See Order G-99-04.

The EPA is the agreement between BC Hydro and Duke Point Power(DPP), the company that has successfully proposed to resurrect BC Hydro's Vancouver Island Generation Project (VIGP) at Duke Point. The BCUC review of the EPA will be the only regulatory process that the DPP project has to undergo - no environmental assessment, no review of the project, just the business agreement between BC Hydro and Duke Point Power Ltd.

When BCUC denied BC Hydro its permit for VIGP, and encouraged BC Hydro to proceed with the Call for Tenders (CFT), it said it would expedite the EPA review that would be the expected outcome of the CFT.

On November 29, in Vancouver, the BCUC will hold a Procedural Conference regarding the regulatory process for the EPA. Be there, or lobby like hell between now and then to have one held in Nanaimo.

Now is the time to write to the BCUC. Here are some worthy things to write about:

1. demand a Procedural Conference in Nanaimo, as well as or instead of Vancouver. Lots of good reasons for this. The Vancouver location is convenient only for the BCUC and the regular industry interveners (who have big expense accounts) whereas people from Vancouver Island have to personally cover travel costs to Vancouver.

2. apply as an intervener, or at least as an interested party, in the EPA review of DPP (no fancy language required. That sentence is just about all you require, though you might want to skip the abbreviations, explain why you are interested, and what your objectives are.

3. be critical of the obscurity of the notice of the registration deadline and date for the Procedural Conference. (That is, it was sent only to a selected list - interveners in BC Hydro's Revenue Requirement hearing - and buried in unfindable obscurity on the BCUC website.)

4. remind the BCUC that expediting doesn't mean short-circuiting due process, or the public's right to be made aware of and participate in the process.

5. ask why there were no ads in local papers. The BCUC was aware that in the VIGP review there wass a great deal of local concern and public concern that is not necessarily local, about gas-fired electricity generation projects on Vancouver Island. The BCUC must make efforts to be inclusive.

6. tell the BCUC that you want a full oral hearing for the DPP EPA.

THE DEADLINE IS FRIDAY, NOVEMBER 26 TO REGISTER TO HAVE ANY SAY IN WHAT HAPPENS NEXT.

THE HEARING IS NOVEMBER 29, 8:30 AM, 855 HOMER, VANCOUVER.

Write to:

Mr. Robert J. Pellatt
Commission Secretary
BC Utilities Commission
Sixth Floor, 900 Howe Street, Box 250
Vancouver, BC, V6Z 2N3
Fax: 604-660-1102
Email: commission.secretary@bcuc.com

Re: Order G-99-04, Review of Electricity Purchase Agreement

Thank-you
Steering Committee
GSX Concerned Citizens Coalition and
Nanaimo Citizens Organizing Committee

Coalition Against GSX Cites More Key Setbacks for Controversial Pipeline

For Immediate Release
16 Nov 2004

For more information, contact:
RE Sources for Sustainable Communities, Wendy Steffensen, (360) 733-8307, waters@re-sources.org
Fuel Safe Washington; Fred Felleman, (206)595-3825, felleman@comcast.net
Neighbors for Birch Point; Jo Slivinski, (360) 371-0301, josl@nas.com
Smart Growth Birch Bay; Alan Friedlob, (360) 371-3441, citizenscience@comcast.net
Friends of the San Juans; Stephanie Buffum, (360) 378-2319, Stephanie@sanjuans.org
North Cascades Audubon Society, Paul Woodcock, (360) 671-1537, paulwoodcock@earthlink.net
GSX Concerned Citizen Coalition of BC; Arthur Caldicott (250) 370-9930, x22, arthurcaldicott@sqwalk.com

On Tuesday, November 9, 2004, the San Juan Board of County Commissioners denied on appeal a Shoreline Substantial Development Permit applied for by GSX (Georgia Strait Crossing) Pipeline, LLC that would allow a massive natural gas pipeline to cross through San Juan County via the Strait of Georgia on its 84.5-mile crossing from Sumas through Whatcom County to Cherry Point and then on to Vancouver Island, BC. The U.S. portion of the pipeline is part of a larger project jointly sponsored by British Columbia Hydro and Power Authority (BC Hydro) and Williams Gas Pipeline Company (Williams). FRIENDS of the San Juans had challenged the San Juan County Hearing Examiner's earlier approval of the Shoreline Substantial Development Permit for the GSX permit.

On November 4, BC Hydro's Senior Vice President of Distribution, Bev Van Ruyven, stated, "We would go with the Terasen alternative [instead of GSX] if Terasen does get regulatory approval, and we can firm up costs." Terasen operates the existing pipeline to Vancouver Island and is currently seeking regulatory approval from the BC Utilities Commission to upgrade the system. Terasen claims, and BC Hydro concurs, that the upgrades will be cheaper than GSX. BC Hydro's statement was corroborated the same day by Richard Neufeld, Minister of Energy of Mines, who said that if the regulatory review of Terasen's application is successful, "then GSX would not be needed."

These developments underscore the fundamental reality that Williams' stated purpose for the pipeline-to transport natural gas from Canada through Whatcom and San Juan counties to Vancouver Island-is not viable. The project has no local support on either side of the border and no certain buyer for the gas it was designed to deliver. Also, in Whatcom County, the decision-making process has been slowed because Williams did not apply for a Substantial Development Permit, which the Whatcom County Council maintains is required.

Furthermore, according to Fred Felleman of Fuel Safe Washington, who is awaiting a decision from the 10th Circuit Court of Appeals on their challenge to FERC's {Federal Energy Regulatory Commission] authority to permit the project in the first place, "It is clear that Whatcom and San Juan Counties are being asked to shoulder the burden of an unneeded project. Unfortunately," continued Felleman, "the Department of Ecology's failure to respond to the applicant in a timely manner and the failure of the Washington Attorney General's office to defend the Counties' interests essentially leaves the protection of our increasingly imperiled waters in the hands of a Canadian business decision."

Yet Washington State, Whatcom and San Juan Counties are all on record as opposing the implementation of GSX, and now BC Hydro, the original sponsor for this project, is almost certain to withdraw its support. With BC Hydro's announcement and the reversal of the San Juan County decision, coalition organizations remain "cautiously optimistic" about these recent developments on both sides of the border, regarding the future of GSX.

Wendy Steffensen of RE Sources stated, "I am very pleased that BC Hydro has acknowledged that Terasen is the cheaper alternative. Environmental and neighborhood groups have been saying for years that they were cheaper alternatives to GSX. The destruction of farmland, and marine and riparian habitats for the GSX pipeline is absolutely unnecessary."

Our coalition of organizations expects that BC Hydro will choose Terasen over GSX and will force the withdrawal of this proposal by Williams. If Williams does not withdraw GSX, we will continue to actively fight the implementation of this pipeline project that provides so little benefit to Washington State relative to its formidable environmental and safety risks.

#

The flaws in the Duke Point deal

Dan Potts
Joint Industry Electricity Steering Committee
Special to the Vancouver Sun
16 Nov 2004

COMMENT: After BC Hydro was denied a permit in September 2003 for its gas-fired generation project at Duke Point, it began a year long process - the Call for Tenders (CFT) - to find the lowest cost generation solution to meet a 2007 shortfall on Vancouver Island.

Critics of the process ranged from environmentalists and community groups to industrial users. In a mini-hearing in late 2003, the BCUC said that the CFT could proceed, but that questions about the process and decision criteria in the CFT would be addressed in their review of any electricity purchase agreements applied for following the Call.

This opinion from the industrial users of electricity is a major shot across the bow of the EPA. - Arthur Caldicott

The proposed award of a power supply contract to Duke Point Power Limited Partnership raises important concerns.

The contract to build and operate a 252-megawatt gas-fired combined-cycle power plant at Duke Point, near Nanaimo, includes the provisions that the site and equipment BC Hydro has acquired at Duke Point will be sold to Duke Point Power for $50 million and, if the contract is approved by the B.C. Utilities Commission, the company will construct and operate the plant.

Total reported capital cost of the facility is $282 million. This leaves Hydro with a write-off of $70 million, which it also intends to collect from customers.

In proposing to proceed with the sale and power purchase agreement, BC Hydro is effectively reactivating the project previously rejected by the BCUC in late 2003. Just one year after that rejection we are right back where we started, proposing the same questionable project but with a different owner.

Ratepayers have serious reservations regarding the economics of this proposal. To attract proponents, BC Hydro has had to structure the bid solicitation very differently than would normally be the case when purchasing power from third parties.

Normally a contract with an independent power producer would involve the purchase of a certain quantity of electric power at an initial price plus some allowances for price increases related to inflation over time.

Once the contract is signed, the price and quantity of electric power can be estimated rather closely over the term of the contract.

Not so in this case. Here, the proposed contract includes annual payments to Duke Point Power for the fixed costs of supplying the capacity, and then an amount per kilowatt hour when the power is produced using natural gas paid for and delivered by BC Hydro.

To estimate the cost of the power you must estimate the cost of the gas for the length of the 25-year contract and also estimate the amount of time the plant will operate. Both estimates are subject to an extreme degree of uncertainty and will likely render the plant uneconomic for much of its useful life.

Market conditions for natural gas and electricity for 2004 up to November illustrate the problem. For a plant of the type proposed for Duke Point the price of importing power from the U.S. was less than the fuel cost for this plant for 80 per cent of the time.

Since power is available for import at lower costs than the fuel cost, the plant would operate economically for 20 per cent of the time and may also operate to alleviate transmission constraints during brief periods of extreme winter cold on Vancouver Island.

But under the proposed contract, the payments for capacity, sufficient to pay the fixed costs and provide a reasonable rate of return to investors, will continue. This raises the real possibility that high fuel costs and low utilization will make the power from this plant horrendously expensive.

BC Hydro is a regulated utility with a guaranteed rate of return of 13.91 per cent on equity. Rates are set by the BCUC to recover costs and provide that rate of return. Energy costs above projections flow into a deferral account for eventual payment by customers, and customers are the ones that will bear the full brunt of both the gas price and utilization risk associated with the proposed plant at Duke Point.

BC Hydro is expected to shortly make application to the BCUC for approval of the proposed contract. We would hope that the BCUC will require BC Hydro to provide some real alternatives for an economic comparison.

These alternatives could include increased maintenance for the existing transmission lines, management of industrial load to reduce peak power requirements, the possibility of expediting construction of additional transmission capacity to the Island and the alternative of generating power using available, lower-cost fuels.

Better options must be developed if BC Hydro is serious about supplying reliable low-cost power for generations.

Dan Potts is the executive director of the Joint Industry Electricity Steering Committee that represents the major industrial users of purchased electric power in B.C.'s pulp and paper, mining and mineral processing, and electro-chemical industries.

(c) The Vancouver Sun 2004

Alternative energy pathfinder: Who needs fossil fuel anyway?

Terence Chea
Associated Press Writer
Helena Independent Record
16 Nov 2004

Amory Lovins drives a hybrid that gets 64 miles per gallon and lives in a solar-powered house that is so energy-efficient he's able to grow bananas in an indoor jungle high in the Colorado Rockies.

Yet the 54-year-old renewable energy evangelist, who emerged as one of the most influential energy thinkers three decades ago during the last oil crisis, is no anti-establishment foe of the free market.

The United States can end its dependence on foreign oil and make money along the way, he argued at a recent environmental conference in San Rafael, Calif., with the salesman-like flair of a Fortune 500 chief preaching to a hall of shareholders.

Crude prices have hit record highs this year as haggard U.S. soldiers daily meet death in the country with the world's second-largest oil reserves, casualties in an expensive war Lovins would argue it's folly to fight if - as some Bush administration critics charge - it's really all about fossil fuel.

''The United States can get completely off oil and revitalize its economy led by business for profit,'' says Lovins, who runs the Rocky Mountain Institute in Snowmass, Colo. ''Saving and substituting for oil costs less than buying oil. Getting completely off oil makes sense and makes money.''

A new book by Lovins and his think-tank colleagues, ''Winning the Oil Endgame,'' offers a technology-driven blueprint to wean the country off petroleum within a few decades: first, double the fuel efficiency of cars, trucks and airplanes; then replace gasoline with alternative fuels such as ethanol and hydrogen.

The transition to a post-petroleum future will generate jobs, create new industries, reduce greenhouse gases and improve national security, he says.

For now, automakers and energy firms need to adopt new business strategies, and lawmakers need to craft policies that promote this oil-free future. By Lovins' estimates, it will require an investment of $180 billion over 10 years.

That's less than the U.S. involvement in Iraq will end up costing, and Lovins says it will save $70 billion a year by 2025.

''Right now, the world supply-demand balance for oil is so terribly tight that any little thing just throws the market into a tizzy,'' Lovins said in a recent interview. ''We're not going to drill our way out of this one.''

Many experts agree that the country's oil dependency is unsustainable and encourages economic volatility, global warming and geopolitical instability. Automakers are already developing more fuel-efficient vehicles that run on hybrid-electric engines, clean diesel, biofuels and hydrogen fuel cells.

But Lovins says the auto industry won't move fast enough without the guiding hand of federal authorities. To fuel a quicker transition to alternative fuels, Lovins says the government should spend more on research into fuel efficient technology, advanced materials and alternative fuels.

To pay for such programs, Lovins proposes fees on gas-guzzling vehicles and the opposite - rebates - for fuel-efficient vehicles. In addition, low-income Americans would be assisted financially to buy or lease efficient vehicles.

Lovins' message doesn't sit well with the auto industry.

It's consumers, not think tanks, who determine whether more energy-efficient technologies will succeed commercially, said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers.

''Consumers are in the driver's seat,'' she said. ''Many consumers don't want to sacrifice performance, passenger room, cargo space, safety and even towing ability for greater fuel efficiency.''

Other obstacles also block the road to an oil-free future - hydrogen- and biofuel-powered vehicles are years away from becoming mainstream.

Lovins acknowledges the challenges, but is convinced that good sense - along with environmental sustainability - are on his side.

He's certainly never been content to follow convention. Born in Washington, D.C., he studied physics at Harvard and Oxford universities, but dropped out of both to pursue his interest in energy policy.

''I realized that energy was at the root of many security, development and environment problems,'' says Lovins, who gained national attention in 1976 with his Foreign Affairs essay, ''Energy Strategy: The Road Not Taken.''

While most analysts were focused on how to secure more oil - what he calls the ''hard energy path'' - Lovins argued for the ''soft energy path'' of boosting fuel efficiency and developing alternative fuels.

Lovins has since authored more than two dozen books, founded the Rocky Mountain Institute in 1982 and advised governments and industries worldwide.

While other environmentalists argue about political approaches, Lovins crunches the numbers needed to win over business executives and policy-makers in Washington.

His plan in brief:

Oil consumption can be reduced by half by doubling fuel efficiency, mainly through ultralight vehicles with advanced materials such as carbon fiber that improve both safety and performance.

''We no longer have to choose between making cars light and safe,'' he says.

Meanwhile, the nation must transition to alternative fuels. Ethanol from corn is now sold in some Midwestern states but hasn't proven economical elsewhere. Lovins advocates making ethanol from plant waste, such as corn stalks, switchgrass and poplar trees.

Another alternative is hydrogen, often touted as the fuel of the future. Hydrogen fuel cells generate electricity through a chemical reaction between hydrogen and oxygen without harmful emissions. Lovins wants to boost the efficiency of natural gas and use the saved energy to produce the hydrogen.

If his ideas were widely adopted, Lovins calculates that the country could stop importing oil by 2040 and run without oil by 2050.

Long before then, fuel efficient cars and alternative fuels could become new growth industries for urban and rural America.

''We're in that period where one idea is dying and another is struggling to be born,'' Lovins says.

On the Net:

Rocky Mountain Institute: http://www.rmi.org

Winning the Oil Endgame www.oilendgame.org

Amory Lovins video clips

Winning the Oil Endgame presentation

Download Winning the Oil Endgame

Exploring Vancouver Island's Energy Future, a report commissioned by BC Hydro and prepared by Amory Lovins' Rocky Mountain Institute. This report shows a multitude of ways forward with pricing signals, sustainable energy, conservation, demand management. The workshop was held in July 2003, in the middle of regulatory hearings into GSX and VIGP. Only BC Hydro and a few industry and government cronies were present, that is, no-one from the progressive side of the energy debate. It was a day and US$47,000 spent with the leading visionaries in the energy sector.

Money wasted in this case. What has BC Hydro done with the report and its recommendations? Nothing.

Vision put forward of world without oil

Nanaimo News Bulletin
Melissa Fryer
13 Nov 2004

Eventually people will have to find a way to live without oil - sooner rather than later.

That's the message author and environmentalist Guy Dauncey brought in his address to a forum on the challenges and opportunities facing Nanaimo in a world without fossil fuels.

He said future historians will identify the current time period as the fossil fuel age. They will say that humans were either very sensible for switching to sustainable energy or that humans had failed, causing climate change and the death of millions of plants and animals.

"We are the people who are going to decide how that goes," Dauncey said.

Climate change, increased heat and dryness are directly related to our use of fossil fuels, said Dauncey.

Evidence comes from the B.C. forest fires and the melting ice in the Arctic.

"The Arctic is the canary in the coal mine for the world," Dauncey said.

"You cannot have polar bears and burn fossil fuels. Polar bears need ice; fossil fuels melt ice."

Dauncey points to initiatives in Europe, for examples, of sustainable energy use in homes and in vehicles.

Some housing developments include solar panels for heat and hot water. Budings are small, making them easier to heat, with stores close by to promote pedestrian trips.

Increasing walking, cycling and use of transit helps to cut down on fuel use. Car share programs allow members access to a range of vehicles, allowing people to choose the right car for their trip.

New vehicles that use fuel sources other than gasoline also help reduce dependence on fossil fuels, said Dauncey.

"We will have to. There won't be the oil and gas to heat ourselves," Dauncey said.

The City of Nanaimo's advisory committee on the environment sponsored the forum. Made up of councillors and members of the community, the committee advises city council and raises environmental concerns in the community.

Guy Dauncey is founding president of the BC Sustainable Energy Association, publisher of a number of books on the challenges of climate change, and publisher of EcoNews. You can reach Guy through BC-SEA or EarthFuture.

Private power plant approved for Nanaimo

Mark Lowey
Business Edge

Duke Point set for Vancouver Island community

Vancouver Island residents are going to get a new natural gas-fired power plant at Nanaimo after all – just not one built by BC Hydro.

Duke Point Power Limited Partnership is the successful bidder in BC Hydro’s call for private-sector bids to supply much-needed power to Islanders.

The Duke Point partnership is majority owned by Macquarie Essential Assets Partnership (MEAP), Pristine Power Inc. of Calgary and a group of private investors.

MEAP is part of the global Macquarie Group of companies, headquartered in Australia. Macquarie Bank established MEAP, an unlisted fund of $460 million, last May to offer investors the ability to invest – especially in deregulated power markets – in relatively low-risk essential infrastructure assets, including electricity transmission and distribution networks.

The Duke Point partnership successfully bid to build a 250-megawatt power plant in the Duke Point Industrial Park in Nanaimo.

It’s exactly the same place BC Hydro had planned to build its gas-fired power plant, before the BC Utilities Commission decided in September 2003 that Hydro’s $370-million plan was too expensive and ordered the Crown corporation to call for private- sector proposals.

Like the defunct Hydro power plant, the Duke Point partnership’s facility will use proven combined-cycle natural gas-fired turbine technology.

Pristine Power will be responsible for the day-to-day management.

The independent power firm estimates it will be able to build the power plant in 18 months for $280 million in “hard-capital costs” (excluding the cost of carrying interest on the debt during construction). That’s $90 million cheaper than what Hydro had in mind.

Pristine and its partners’ biggest hurdle now will not be getting through B.C.’s streamlined regulatory process.

The challenge will be convincing Nanaimo residents, many of whom don’t want the plant in their backyard, that it should be built there so all Islanders aren’t left in the dark.

BC Hydro spent $120 million developing its Duke Point power project, but will recover only $50 million of that amount in the deal announced with Pristine, according to a report.

So who’ll get stuck with the remaining $70-million tab? Ultimately, it will be B.C. taxpayers, either though higher electricity rates for all Hydro customers, a cut in Hydro’s dividend to taxpayers or a slash in the Crown corporation’s budget.

Jury still out on plant's savings

Editorial Board
Nanaimo News Bulletin
10 Nov 2004

Back in September, 2003 B.C. Hydro went before the B.C. Utilities Commission seeking permission to build a natural gas power plant at Duke Point.

The request was denied on the basis that B.C. Hydro had not demonstrated the power plant was the most cost-effective way to generate power.

As a result B.C. Hydro issued a call for tenders. A number of companies responded, with one - a proposal by Pristine Power Inc. - being chosen.

To no one's surprise, the proposal is for a natural gas power plant at Duke Point. So we're back to square one with a private company building it instead.

For anyone who believes that the private sector can do better than a government agency, here is an apples-to-apples comparison - except for the small print. The Pristine Power Inc. facility will indeed be cheaper to build, but that's thanks almost certainly to the groundwork already laid by B.C. Hydro.

The corporation was forced to write off considerable costs from the Duke Point project, including $50 million for environmental approval costs, $61 million for a gas and steam turbine and $9 million for the property at Duke Point.

If so, are the savings real? That is, will Vancouver Island be assured of electricity as cheap or cheaper than it would under the B.C. Hydro proposal?

Hopefully the utility commission that started this whole process will end it with good news for hydro customers - news that also takes into consideration the $120 million in writedowns. If not, there's a very real chance all the utilities commission did was create paperwork and put the future of the Island's electricity in private instead of public hands.

That's an odd directive of a commission that (to the best of our knowledge) was never given that mandate.

News Bulletin editorial board

---

San Juan County hearing examiner's decision on GSX overturned

Yesterday, San Juan County joined neighbouring Whatcom County and British Columbia, in reducing the likelihood that the GSX Pipeline will go ahead.

"Hearing examiner's decision on GSX overturned [by San Juan County Commissioners]", San Juan Islander, Nov 10, 2004 (link)

"they [Terasen] could put in enough storage for peak use and that will be reviewed by the BCUC and if that in fact is the case then GSX would not be needed." Richard Neufeld, Minister of Energy of Mines, CKNW Radio, Nov 4, 2004

"if they [Terasen] do get regulatory approval and we can firm up costs, we would go with the Terasen alternative" Bev van Ruyven, Vice-Pesident, BC Hydro, CBC Radio, Nov 4, 2004

"[Whatcom County] Council delays action on pipeline", John Stark, Bellingham Herald, Oct 28, 2004 (link)

from the San Juan Islander...

Hearing examiner's decision on GSX overturned

posted 11/10/04
In a two to one vote, San Juan County Board of County Commissioners overturned Hearing Examiner Wick Dufford's decision about a gas pipeline. He had approved a permit for the Georgia Strait Crossing Pipeline Project after listening to testimony in an April 9, 2004 hearing. The project includes a four-mile segment in county waters.

The Friends of the San Juans appealed the decision to the BOCC on the grounds Dufford erred when he approved the permit. "We believe the hearing examiner essentially rewrote San Juan County shoreline code," said FOSJ attorney John Karpinsky. Pipelines were only to be allowed if there were no feasible alternatives. Dufford interpreted feasible as preferable, Karpinsky said.

In order to be approved, the pipeline would have to be in the public interest. "The hearing examiner said because someone is going to make money, it is a benefit to the state. People can make money off prostitution," said Commissioner Rhea Miller said. "I don't see anyway this (the pipeline) promotes public interest."

Commissioner John Evans did not think there was an error of law and voted against overturning Dufford's decision. He also noted, "it is not a crime to make money."

Commissioner Darcie Nielsen believed Dufford made a stretch to approve the permit. She voted with Miller to overturn the decision and go back to the original staff recommendation to deny the permit.

Because federal agencies including the the Federal Energy Regulation Commission (FERC) are involved in permitting the project, it is unclear how much of an impact the county's decision will have. The next step in the permit process would be an appeal to the Shoreline Management Hearings Board if the pipeline company decides to appeal the BOCC decision.

This article is followed in the San Juan Islander with a series of articles on GSX going back to March 2000. You can obtain this article and the historical ones at:
http://www.sanjuanislander.com/county/permit_center/gsx_pipeline.shtml

More illumination is needed on Hydro's Duke Point deal

Editorial
Vancouver Sun
09 Nov 2004

The B.C. Utilities Commission created an awkward problem when it derailed the Vancouver Island Generation Project last year.

B.C. Hydro had already spent $120 million on the plan to build a gas-fired, 265-megawatt generation plant at Duke Point in Nanaimo and a related gas pipeline to Washington state.

The Utilities Commission, which was given regulatory control over the project following the change in government in 2001, said the plant was larger than needed and asked Hydro to consider private-sector alternatives.

In response, Hydro put out a call for tenders for the supply of power for Vancouver Island.

Hydro has now announced a winning project, but the details of that choice raise a number of troubling issues about how well ratepayers are being served by this whole exercise.

Hydro's plan for Duke Point had a projected cost of $370 million plus the cost of the gas pipeline -- another $340 million.

It's not at all clear that the proposal announced by Hydro last week will be any less expensive for electricity users; in fact, it might cost more over time.

The new plant will be built by Pristine Power, a Calgary-based company, which plans with its partners to pay Hydro $50 million for equipment already purchased and built and to operate a plant similar to the one Hydro was planning.

Pristine estimates it will spend at least $280 million in "hard costs." In addition, Pristine will face financing and other costs related to getting the plant up and running.

Hydro's construction budget had included $34 million to $41 million for interest cost during construction. There is no reason to assume Pristine's financing costs will be any less.

Hydro has not said what price it will be paying for power from the Duke Point plant, but we have to assume it will include a reasonable rate of return on the new company's investment.

On top of that, Hydro will have to eat $70 million in write-offs because its project and the associated gas pipeline are not proceeding.

So the B.C. Utilities Commission will have to explain to ratepayers how they are better off with what is essentially the same project proceeding under private ownership a year after they told Hydro to think again.

They will also have to explain to the other private-sector companies -- that spent time and money developing alternate proposals -- how this process has been fair to them.

Hydro has a clear conflict of interest in choosing a proposal here because of the carryover from its original project. Without the $50 million Pristine will pay for equipment already purchased for the Duke Point Plant, Hydro was looking at having to write off the entire $120 million.

British Columbians who buy their electricity from Hydro have a mixed interest here. On one hand, any losses suffered by the publicly owned utility will affect our power rates.

On the other, we have a long-term interest in attracting private power producers to the province.

If they cannot be assured they will be treated fairly, they will simply go elsewhere at a time when we need their investment and innovation here.

---

Island deal leaves Hydro on the hook for $70m

Customers or taxpayers likely 'options' to cover Nanaimo project costs

Scott Simpson
Vancouver Sun
04 Nov 2004

BC Hydro customers could be on the hook for $70 million in corporate writeoffs that were incurred during a controversial, drawn-out process to address a looming electricity shortfall on Vancouver Island.

Hydro distribution vice-president Bev Van Ruyven announced Wednesday in Nanaimo that Pristine Power of Calgary will build a 252-megawatt gas-fired generating plant at Duke Point to provide Island residents with a reliable electricity supply.

Hydro originally spent $120 million developing the project, but will recover only $50 million of that amount in the deal it announced with Pristine.

Van Ruyven said it's up to the B.C. Utilities Commission to decide how Hydro will make up the other $70 million it spent.

Options include higher electricity rates for all Hydro customers, a reduction in the dividend that Hydro pays to B.C. taxpayers as a Crown corporation, or Hydro may have to slash its budget to make up the $70 million, Van Ruyven said.

Hydro estimates that without the Duke Point plant, Island residents could be facing brownouts by 2007 due to constraints on supply and aging undersea transmission cables.

Pristine estimates hard capital costs of the project at $280 million -- $90 million less than what Hydro was planning to spend -- and expects it will take 18 months to put the plant into production, pending regulatory approval.

For its money, the Calgary-based company gets a brand new gas turbine at a steep discount and inherits a project that has already received all regulatory approvals necessary to proceed.

Hydro set out in 1999 to take on the project itself at an estimated cost of $370 million -- investing $120 million for equipment, permits and land.

However, with the $120 million already spent, the B.C. Utilities Commission (BCUC) in September 2003 rejected Hydro's application to proceed with the project.

The commission said Hydro's project was too expensive, and ordered the Crown corporation to find a private-sector partner in order to cut costs.

The cash crunch isn't entirely Hydro's fault.

The Vancouver Island generating project was underway before the B.C. Liberals took power in May 2001.

At the time, Hydro was not under the jurisdiction of the utilities commission.

But the Liberals put Hydro under BCUC control as part of a new provincial energy plan that called for the private sector to develop all new electricity supply for British Columbia's steadily growing demand.

Hydro decided to keep pushing the project ahead with a promise to find a private-sector buyer when it was finished.

But Hydro was brought up short when the BCUC sided with Hydro critics -- including the province's largest industrial customers -- who were concerned that the Island generating project wasn't the cheapest possible option.

Van Ruyven expects Hydro will be called before the BCUC some time next year to defend its actions and propose options for recovering the $70 million.

"We had been directed by the government," Van Ruyven said. "We will argue that we were headed down a path to build that ... gas-fired plant and we incurred those expenses prudently.

"Now we've got an opportunity with a private-sector partner coming in who says that they can build it and operate it for less than we said we could.

"They are going to write us a cheque for $50 million too. That's a good thing."

It's up to the utilities commission to decide how long it will deliberate over the proposed deal between Hydro and Pristine Power.

Van Ruyven said Hydro is hopeful that the commission will render a verdict in the deal in about three months.

"They did say they would make a decision on an expedited basis," Van Ruyven said. "We're obviously pretty anxious to get going on this and they completely agree with our issues on security of supply and the aging cables. So they know we're up against a crunch here."

Pristine president Jeffry Myers described the company as a group of "power industry veterans" who are confident that they can start delivering electricity 18 months after start of construction.

Again, it's up to the BCUC to decide when that construction will begin.

Myers provided some details about the deal, but would not disclose the full cost of the project nor the rate that Hydro will pay Pristine to purchase its electricity.

"Our hard capital costs will be around $280 million. Then there are some soft capital costs, like the cost of carrying the interest on the debt during construction," Myers said.

"Then we look at getting a return on our money to satisfy our investors over a 25 year term of the contract."

The process Hydro undertook in its Vancouver Island call for tenders was reviewed and pronounced sound by PricewaterhouseCoopers LP.

Hydro's original plan also called for construction of a $320 million gas pipeline from Washington State to Vancouver Island, across Georgia Strait, to feed the Duke Point plant.

Hydro already has regulatory approval from the National Energy Board to construct that pipeline in partnership with a U.S. energy company, Williams.

But Van Ruyven said that project may be unnecessary because Terasen Inc., is pursuing a project that would increase the capacity in its existing gas transmission lines to Vancouver Island.

Terasen is currently before the BCUC with that project.

"They have provided us with a new gas tooling price which is significantly less expensive than the Georgia Strait Crossing," Van Ruyven said.

"If they are able to get regulatory approval and firm up that tolling price to us, it wouldn't be prudent for us to refuse it."

The deal was criticized by GSX Concerned Citizens Coalition, a group of Vancouver Island who have argued that Hydro should seek environmentally friendly alternatives to a project that will diminish air quality in the Nanaimo area.

"Gas-generated electricity just keeps going up in price because gas keeps going up in price," said GSX director Arthur Caldicott.

We are disappointed because it locks Vancouver Island into a gas-fired electricity solution. But we are encouraged by the unofficial indicators we got on Georgia Strait Crossing that that pipeline probably won't get built."

BC Citizens for Public Power executive director Mark Veerkamp said Hydro's decision overrides the concerns of the community that must play host to the project.

"Here's a community in outrage over a gas plant in their area, the thing gets killed at the B.C. Utilities Commission, and it comes back as a private project with less public accountability.

"So I think it's a bit of a lose-lose situation for people on the Island.

"Hydro says the project is going to be cost effective, but we don't get a chance to see what rates are going to be charged back to BC Hydro.

"We don't know what BC Hydro is paying for the power."

© The Vancouver Sun 2004

http://www.canada.com/vancouver/vancouversun/index.html

Duke Point project to power Island

Andrew A. Duffy and Judith Lavoie
Times Colonist
Thursday, November 04, 2004

It may have a new name, new price tag and lower electrical output, but the Vancouver Island Generation Project appears to have risen from the dead.

B.C. Hydro announced Wednesday that Duke Point Power Ltd., a wholly owned subsidiary of Macquarie Essential Assets, Pristine Power and a group of private investors, is the successful bidder in the call for proposals to provide Vancouver Island with a new source of electricity.

The Duke Point Project, a 252 megawatt, gas-fired power plant to be built at Duke Point in Nanaimo at a cost of $280 million, replaces the supposedly dead-and-buried VIGP -- a 265-megawatt plant Hydro intended to build on the same site at a cost of $370 million.

That project was rejected by the B.C. Utilities Commission as a too large and costly way to make up the Island's energy shortfall, prompting the call for tenders.

"[This] is the best way to provide our customers with the reliable capacity required to meet Vancouver Island's anticipated supply shortfall in 2007," said Bev Van Ruyven, Hydro's vice-president of distribution, noting the undersea cables that run from the mainland and provide the Island with 80 per cent of its power are to be decommissioned that year.

"This is a private company and a less expensive option ... it was the most cost-effective means of getting the minimum required [electricity]. It could just as easily have been a number of smaller projects."

Reaction to the news ranged from relief at Nanaimo city hall to disappointment from some who opposed the original VIGP, and from the community of Gold River, which had pinned its hopes on a proposal for a thermal generating plant in the community's old pulp mill.

Nanaimo Mayor Gary Korpan called approval of Duke Point Power's proposal great news. "It ensures a stable, secure electrical supply for Vancouver Island," he said. "We've had brownouts twice in the last two winters and three years ago we had rolling blackouts -- our economic development plans aren't worth the paper they're printed on if we don't have power."

The economic impact on Nanaimo will be significant, with 200 jobs created during construction, not to mention services sold to the construction crews. The plant itself will provide 15-20 local jobs when it's running, along with more than $900,000 a year in municipal taxes.

Arthur Caldicott, director of the GSX Concerned Citizens Coalition, which has advocated replacement of the undersea cables as the top option, wasn't as enthused.

"Clearly VIGP wasn't [dead] and we didn't really expect it to be dead," Caldicott said. "Of course we're disappointed. We have been critical of the gas-fired strategy for Vancouver Island from the start."

Hydro maintains it's more cost-effective to build on-Island generation than to replace the decaying underwater cables.

Hydro has already invested $65 million in the VIGP on property, permits and turbines, but will recoup $50 million of that in the deal with Pristine.

The announcement that Duke Point Power was the successful bidder prompted accusations from furious Gold River residents that the tender process was skewed in favour of the company, because of the investment Hydro had already made on the Duke Point site. One of the rejected bids came from Green Island Energy Ltd., which planned a thermal generating plant at the former Bowater pulp mill in Gold River.

The village has asked for intervenor status at the utilities commission hearing into the decision and has invited Hydro and provincial government representatives to a public meeting in Gold River Nov. 15. The aim is to convince the commission that Duke Point Power got preferential treatment, and that Green Island can produce clean power more cheaply.

Green Island planned to produce power by burning "biomass": wood, construction waste and pelleted garbage barged in from California. Gold River council had expected the enterprise to be given the go-ahead in addition to the Duke Point project and was shocked to hear the project had been rejected.

"The heartlands of Vancouver Island are in cardiac arrest right now," said Mayor David Lewis. "This is not just a bad decision for Gold River -- it's horrendous for everyone on the Island."

The community has struggled to stay alive since the pulp mill closed six years ago, throwing 400 people out of work. Tax revenue from the mill site plummeted to $300,000 from $1.8 million and the population dropped to 1,400 from 2,000.

Hope appeared last year in the form of Green Island, a company partially owned by pop singer Jewel, which bought the mill site and came up with plans for the thermal generating plant. That spawned interest by other industries that wanted to utilize plant by-products.

Without Green Island, Gold River will have to look at closing facilities such as its pool or rink, Lewis said. "This is devastating. We're all in shock," said the mayor, vowing, however, not to let the community die.

"It may seem far-fetched, but B.C. Hydro has a monopoly and maybe we should look at forming our own Vancouver Island public utility."

Green Island vice-president Sean Ebnet said the company has not yet decided whether to take part in another province-wide B.C. Hydro call for proposals next May. "Right now we don't know whether we will participate in future calls or put up a for sale sign," he said. "We really geared everything to this proposal and we'd invested quite a bit. We were ready to start construction in 2005."

It's estimated Green Island has invested about $20 million in the site.

There was no official word Wednesday on how the gas-fired power plant at Duke Point would be fuelled, but Hydro says it's waiting to hear what happens during B.C. Utilities Commission hearings into Terasen Gas's plan to increase gas supply to the Island.

Van Ruyven says the Terasen project appears to be cheaper than Hydro's controversial $340-million Georgia Strait Crossing (GSX) pipeline.

"They are currently in the regulatory approval process but until such time as we have certainty, we have to keep GSX in the background," she said. "It wouldn't be prudent for us to approve a higher-cost project like that."

Hydro expects the commission's decision by the end of November, the same time the utility intends to file the outcome of the call-for-tender process with the commission.

The commission has said it would expedite its review of the Duke Point plan, meaning the go-ahead or start-over order could come in March.

"We expect mobilization in the spring," said Jeffry Myers, president of Pristine Power, though he said construction won't begin until next fall, with the facility to be operational by May 2007. "It's enough time, but we need to have the bulk of the construction done by late 2006 ... we have built plants of this size in 18 months."

© Times Colonist (Victoria) 2004

http://www.canada.com/victoria/timescolonist/index.html

BC Hydro picks gas-fired Duke Point Power; GSX remains undead

BC Hydro has announced its selection of "Duke Point Power LP", a 252 MW gas-fired electricity generation project for Nanaimo. Proposed by Pristine Power of Calgary, the project is the only one left standing following BC Hydro's year-long Call for Tenders (CFT) selection process.

Isn't this VIGP with a new name?
Yes. Duke Point Power is the Vancouver Island Generation Project (VIGP), this time privately owned and renamed. VIGP was originally sponsored by BC Hydro, and turned down by the BC Utilities Commission (BCUC) in September 2003 because BC Hydro had not demonstrated that VIGP was not the lowest-cost solution to meet an expected supply shortage in 2007.

If the Duke Point Power project is the same thing as VIGP, how can Pristine Power pitch it at a lower cost than BC Hydro was capable of doing?
Possible answers to that question are:

• A $50 million credit given by BC Hydro to companies wishing to acquire the assets of VIGP and resubmit them into the CFT process, which is what Pristine Power has done.
  
• $98 million "sunk" costs in VIGP were written down by BC Hydro earlier in 2004. Are these costs factored into the Pristine Power project costs? Or are they lost from view, but nevertheless borne by BC Hydro's ratepayers, or the taxpayers of BC?
  
• The relative appreciation in the Canadian dollar compared to the US dollar results in an apparent reduction in borrowing costs, since the debt and repayment currency is $US. This is a cheap and temporary trick, since exchange rates will fluctuate many times in the decades during which the project costs are being repaid.

Will the Duke Point Power project have to undergo a review by the Environmental Assessment Office or by the BC Utilities Commission?
Probably not. Unless the location or technology changes, the EA permit remains valid. And because the project is privately owned now, it is not subject to a review by BCUC.

BCUC has to review something, though. What is that?
BC Hydro will apply to BCUC for a review of the Electricity Purchase Agreement between BC Hydro and Pristine Power or Duke Point Power LP. The EPA is a commercial agreement, subject to confidentiality considerations. In the past, details within EPAs have not been disclosed, and this has been upheld by the Office of Information and Privacy Commissioner (OIPC). We should expect details of this EPA to be unavailable, as well. This becomes a case of "trust the regulator.", since the Commissioners will be given access to the full agreements. BC Hydro states that they will file this application by November 19.

Who is Pristine Power?
Pristine Power is a group of ex-Westcoast Energy people who were working for Westcoast and Fletcher Challenge and built the Island Cogeneration Project. They claim to have built a number of combined cycle generation plants in North Americal, although its website gives no indication as to what these are.

Is the GSX Pipeline still alive? Where will the Duke Point project get its fuel from?
Today's announcement deferred the GSX Pipeline decision until the BC Utilities Commission has completed its review of Terasen's Resource Plan. Indicators are that the GSX Pipeline is dead, although official statements won't go that far, leaving GSX among the "undead". Fuel supply to the new project remains undecided. Terasen filed evidence in the review of VIGP that it could provide the needed gas, at lower cost, with upgrades to its existing pipeline to Vancouver Island.

BC Hydro news release
BC Hydro Call for Tenders for more information
GSX Concerned Citizens Coalition media release

GSX Concerned Citizens Coalition
For Immediate Release: November 3, 2004

Energy “winner” makes Vancouver Island a loser

Nanaimo, BC – The Duke Point Power Limited Partnership project, winner of BC Hydro’s long-awaited Call For Tenders (CFT) for new energy generation, is not the least-cost option to meet Vancouver Island’s electricity needs, says the GSX Concerned Citizens Coalition (GSXCCC). The Coalition is calling on the BC Utilities Commission to ensure a full public review of the project.

“This result violates the terms of BC Hydro’s CFT and frustrates the Commission’s expectation of the lowest cost solution,” said Tom Hackney, GSXCCC president. “BC Hydro’s vision for Vancouver Island’s future energy is dirty, non-renewable and expensive. Vancouver Islanders must now insist on a thorough review of this inappropriate and costly project. All British Columbian ratepayers will pay for this wrong-headed energy plan.”

The CFT was issued to find the most cost-effective solution to an expected electricity shortfall on Vancouver Island resulting from the zero-rating of existing sub-sea transmission cables. “The real solution is to renew the sub-sea cables as soon as possible,” said Hackney.

In its 2003 review, the Commission found that BC Hydro had underestimated the risk of high gas prices, given the rapid depletion of conventional North American gas resources.

“Gas-generated electricity is no longer cheap,” said GSXCCC director Arthur Caldicott. “It’s time for the BC Transmission Corporation to renew the sub-sea cables, so that the Island will not be cut off from Mainland sources of electricity.”

The GSX Concerned Citizens Coalition has campaigned against BC Hydro’s Vancouver Island electricity strategy since 2000, bringing expert evidence to the National Energy Board review of the Georgia Strait Crossing (GSX) natural gas pipeline and to the BC Utilities Commission review of the Vancouver Island Generation Project, both in 2003. The Coalition has a hundred individual members and eight member groups, including the Sierra Club of Canada - BC Chapter, Georgia Strait Alliance; Council of Canadians – Victoria and Cowichan Chapters, Saturna Island Community Club, Pender Island Conservancy Association, Shawnigan Lake Watershed Watch and the Canadian Parks And Wilderness Society – BC.

- 30 -

For further information, contact:
Tom Hackney (250) 616-7895 cell or (250) 381-4463
Arthur Caldicott (250) 370-9930 x.22

Nov 2: 6.7 Quake off Vancouver Island

November 2 2:02 am PST: A series of earthquakes has occured west of Vancouver Island, B.C. The largest event at 02:02 PST (10:02 UTC) was a Mw=6.7 and was reported felt at Alert Bay, Port Alice and Bamfield, B.C. the largest aftershock in the series so far is a magnitude 5.0 earthquake at 09:23 am PST. Click here for a map. Click here to see the shaking.

Geological Survey of Canada
Recent Earthquake in Western Canada

United States Geological Service
Earthquake Hazards Program

Wind farm will sell power to B.C. Hydro

Times Colonist (Victoria)
Judith Lavoie
02-Nov-2004

The first wind-farm project in B.C. to be given a contract to sell power to B.C. Hydro has got the environmental go-ahead from the province.

The $100 million Holberg Wind Energy proposal, which envisages 37 to 45 wind turbines on the northern tip of Vancouver Island -- 60 kilometres west of Port Hardy -- could be providing power to B.C. Hydro by 2006, Dan Allard, president of Stothert Power Corp., said Monday.

Stothert, a Vancouver-based company, and Global Renewable Energy Partners Inc., a Danish-U.S. company, are partners in Holberg Wind Energy GP Inc.

Sea Breeze Energy Inc., was previously given environmental approval for a wind farm in the same area, but does not yet have a customer for the power or access to transmission lines.

Holberg has a 20-year contract with Hydro to take all the electricity it produces, which will probably be enough to power at least 17,000 households. The power will be transmitted over lines connecting to the grid at a Port Hardy substation.

"We hope to start construction after the wind studies are done in the spring and it will take between 12 and 18 months," Allard said.

The wind farm will mean about six permanent jobs for local residents and, during construction, there will be an estimated 100 person years of work, he said. "It's a big construction effort and then we'll be training people to operate the plant and do things like maintenance," he said. The turbines will be in an area which is not heavily populated and will not be visible from most of the water, Allard said.

The windmills are about 80 metres tall and blades are 40 metres wide and are more bird-friendly than the older lattice turbines, he said.

Both federal and provincial governments have concluded the project is not likely to cause significant adverse environmental effects.

Wind power remains more expensive to produce than hydro power, partly because the turbines are likely to be working for only about 35 per cent of the time. But Holberg will probably qualify for new federal money, amounting to one cent for every kilowatt hour, from the Wind Power Production Initiative.

"They cost a lot to build, but they don't cost much to operate and the fuel is free," Allard said.

The company has options on other land in the Holberg area and elsewhere in B.C., he said.

Energy and Mines Minister Richard Neufeld said there have been some teething problems as the province considered wind power projects.

"B.C. Hydro doesn't have experience with wind power and it's new for B.C. folks . . . They've all worked together very hard to make it work and we're pretty proud this is taking place," he said.

Hydro has another proposal call next May and it is likely other wind power proponents will step up to the plate, Neufeld said.

Sea Breeze was not selected to provide power for B.C. Hydro because it bid on the Vancouver Island proposal call, rather than the general proposal call, and Vancouver Island needs 24-hour capacity, which Sea Breeze could not provide, he said.

Paul Manson, Sea Breeze president, said the company is planning to go ahead with its project even though B.C. Hydro does not appear to be interested.

"There's a desperate need for this emission-free energy . . . We are about to see an explosive growth in the amount of wind energy being produced in Canada and B.C. is being left behind for reasons we don't understand," he said.

The company is looking at U.S. customers and, because of difficulty in gaining access to transmission lines, has applied for a cable to run from Victoria to Port Angeles, Manson said.

The province's energy plan says that 50 per cent of the province's new electricity should come from green projects such as wind power, small, run-of-the-river hydro projects or biomass energy, such as burning wood residue from sawmills.

Mark Jaccard, a Simon Fraser University ecological economist, said it is difficult for wind power to compete with other energy sources because most places in the province do not have a steady wind, but do have plentiful supplies of water running downhill.

However, there are locations where it would work, he said.

"I am not saying wind is uncompetitive, I am saying it has challenges," he said. "It appears as if the Holberg project has cleared many of the hurdles. It is extremely important that Hydro has accepted this."

jlavoie@tc.canwest.com