Island power play on the line

Andrew A. Duffy
Times Colonist (Victoria)
13-Feb-2005

The predictions are in: the $250-million Duke Point power plant at Nanaimo will win approval this week from the B.C. Utilities Commission.

Both opponents and supporters agree, based on what they've seen and heard through two weeks of hearings, that on Thursday, the commission will give the go-ahead for an electricity purchase agreement that will lead to the construction of a 252-megawatt power plant fuelled by natural gas.

Some of that belief is resigned cynicism at a process many feel was weighted in favour of the proponents and some of it is optimism from those who want to see the project up and running.

"We believe the hearing of the evidence overwhelmingly supported the project and in that context we expect the decision to be favourable," said Harvie Campbell, vice-president of Pristine Power of Calgary. The company would build and operate the plant, and sell its output to B.C. Hydro.

The Georgia Strait Crossing Concerned Citizens Coalition is among several groups that appeared before the commission to oppose the power plant, citing concerns about high cost and greenhouse gas emissions that will harm the environment.

Arthur Caldicott, a coalition director, also believes the project will be approved -- and that will send out the wrong message in a week when the Kyoto protocol to limit greenhouses gases is being adopted as international law.

"This is Hydro's first major addition to its inventory in decades and it's not clean, it's greenhouse gas generating and right on the advent of Kyoto ... the timing is dreadful," he said.

Apart from environmental concerns, opponents have worried that the project will boost costs for consumers, and is based on electricity demand forecasts that are too high.

B.C. Hydro and Pristine Power insist the project is necessary because Vancouver Island clearly faces a power capacity shortfall, especially by 2007. Hydro officials say that in 2007, some of the undersea transmission cables that bring electricity from the mainland will be rated as unreliable because of their age.

Work is underway to replace those cables, but the planning, approval and construction process likely means new cables won't be ready until at least late 2008.

Even with new cables in place, B.C. Hydro and Pristine see a need for the Duke Plant to help ensure long-term electricity supply for Vancouver Island, as well as the entire Hydro system.

"The Duke Point Power Project is the best way to meet one of our top priorities, which is to provide our customers with the reliable capacity required to meet Vancouver Island's anticipated supply shortfall in 2007," Bev Van Ruyven, B.C. Hydro's senior vice-president distribution, said last year, in announcing an alliance with Pristine. "The new peak electricity demand set by Vancouver Island customers [on Jan. 5, 2004] demonstrated that we need more electricity than was previously thought and this project is the best way to ensure we meet those needs."

Campbell, the Pristine vice-president, said approval of the project means work at the Duke Point site, south of Nanaimo, could start by mid-year.

The plant is to be up and running by May 2007. There is slightly more than a 24-month window to build it, though Pristine has said it could be done in as little as 18 months.

"But there's always a little slack built into a schedule just in case," added Pristine president Jeff Myers.

The company may need it. A number of groups who intervened at the utilities commission hearings have said they are likely to appeal an approval decision.

"It's a serious possibility," said Tom Hackney, president of the Georgia Strait Crossing Concerned Citizens Coalition. "We have serious grounds on the basis of apprehension of bias."

The coalition sought to disqualify the commission panel during the hearings because of an in-camera discussion the panel had with B.C. Hydro representatives. That meeting showed the panel prejudged the outcome of the hearing before receiving arguments and cross-examination from intervenors, the coalition said at the time. The motion was dismissed, but Hackney said it could be used as grounds for appeal.

Hackney, who expects approval, said he can't be certain of how his group will proceed with an appeal. "But if we went to court it would certainly up the stakes in terms of Pristine's risk, and if we were successful it could potentially force a whole new review of the project and set aside" the electricity purchase agreement," he said.

Campbell dismisses that stance. "I believe the likelihood of appeal is way overblown," he said, noting the grounds for it were a very small part of the proceedings.

Gold River Mayor Dave Lewis is another project opponent. "They are going to approve Duke Point in my opinion," he said. The commission is moving through a process with blinders on -- looking solely at the purchase agreement issue rather than casting a wider net to see if there is a better way of making up electricity capacity, he said.

"Shouldn't the BCUC, instead of trying to follow through on a process started two years ago, look at what the best option is now?"

Lewis has his own idea of what that is. Before the hearings, he said if the utilities commission approves the deal it may kill plans to build a thermal generating power plant in Gold River and take away any economic certainty the village of 1,359 may have had.

The village has been pinning its hopes on a plan by Green Island Energy to build a biomass-burning plant (fuelled by wood, construction waste and pelleted garbage) on the site of an abandoned pulp mill.

When the mill closed in 1999 it put 300 people out of work. As a result, the village's annual budget was slashed to about $2 million from $6 million.

Lewis said he doesn't know what will happen to the project if Duke Point goes ahead. "(Green Island) are independent investors and they've been told by government and Hydro to follow a path and protocol and they feel screwed every way they've gone," said Lewis.