Scrutiny attests to power project's value
Jeff Myers
Pristine Power
Special to Times Colonist
21 Feb 2005
COMMENT: Jeff Myers of Pristine Power has taken over from BC Hydro with "false-truths and misinformation" on the need for more power on Vancouver Island. The Duke Point project remains a long term, costly "solution" entirely inappropriate to the nominal "need", which is to bridge from 2007 to 2008 during the period when one set of cables gets derated, and before a new set of cables becomes operational. See the letter by Yakout Mansour of BC Transmission Corporation about BCTC's bridging options - which render Duke Point Power unnecessary.
As the new kid on the Vancouver Island energy block, Jeff Myers could be forgiven for not being entirely up to speed on the facts, especially as his job is to sell an electricity plant, not to address the optimum solution to the Island's energy needs and BC's needs beyond the present capacity issue. Other parties have been participating in regulatory reviews around this matter for the past five years and have had a chance to become more informed on the relevant -- sometimes difficult and technical -- evidence.
As an initial comment, there is no basis to consider the power blackouts back east as relevant to Vancouver Island -- the facts simple don't support the comparison - Thomas Hackney
The proposed power project at Duke Point has been the subject of a lengthy public hearing. After considering the evidence, the B.C. Utilities Commission approved the project last week.
However, despite the long-term benefits of the project, a few groups chose to condemn the project outside of the hearing, often with false arguments or misinformation.
Fortunately, a close read of the public record -- available on the Web at www.bcuc.com -- shows the evidence in support of the project to be most compelling, while answering two key questions in the affirmative.
Does Vancouver Island need a new source of long-term electrical generating capacity?
If so, is the proposed Duke Point power project the right resource to meet this need?
Vancouver Island faces a deficit of electrical generating capacity. The Island's need for new capacity is driven by increasing demand and the retirement of an undersea transmission cable. This "capacity deficit" means that growing demand for power may soon exceed supply during the colder winter months from October to March, when demand is greatest.
The capacity deficit became evident last month when electricity demand on the Island exceeded B.C. Hydro's forecasted demand for 2008, and some industrial customer's supply was curtailed.
The BCUC has been perfectly clear about the looming capacity deficit. The commission determined in 2003 that "there is a capacity shortfall on Vancouver Island, commencing in the winter of 2007/08," and that "the appropriate next resource addition should be on-island generation."
Why should Vancouver Islanders care if there is a capacity deficit? Having enough capacity means that as an essential service, electricity will be there when you need it, 24/7. The importance of reliable electricity and infrastructure was demonstrated during the eastern seaboard blackouts in 2002.
To solve the capacity problem, the BCUC encouraged B.C. Hydro to hold a competitive tendering process in 2003. Pristine Power became interested in Duke Point because B.C. Hydro's call for tenders seemed a competitive and fair opportunity.
We were also encouraged that BCUC oversight would free the process from the political interference that dogged energy decisions in the 1990s.
B.C. Hydro took two extraordinary measures to ensure the tender process was fair and would acquire the most cost effective resource.
First, it brought in an independent reviewer. PricewaterhouseCoopers found the call for tenders to be completely fair and appropriate. All 23 expressions of interest were treated equally with no bias, regardless of their technology, be it natural gas, coal, wind or wood waste and garbage-derived fuel.
Second, it ordered a "cost effectiveness analysis" of the leading bid. This extra due diligence involved a financial and technical evaluation of other options to ensure there were no reasons to reject the lead bid, and that its selection was in the best interest of B.C. Hydro's customers.
After such a rigorous process, Pristine Power is proud to have led the Duke Point Power consortium that was selected as the most cost-effective solution for ratepayers. Still, despite the evidence, other parties, many of whom were unsuccessful bidders, insist the Duke Point facility is not the answer and will cost too much.
Some critics claim the capacity shortfall can be fixed by replacing the transmission cable. To the contrary, the B.C. Transmission Corp. stated that a combination of new on-Island generation and transmission is the best option; the Island's capacity shortfall cannot be met by replacing the cable alone.
As for Norske's proposal, the BCTC stated that it is "unable to solve capacity deficits on Vancouver Island in 2007 and beyond."
Others argued for green and alternative energy projects, but resources such as wind or micro hydro are constrained by the elements and cannot provide the dependable capacity required by Island residents.
In terms of the environment, B.C.'s Environmental Assessment Office determined that Duke Point will not adversely affect air quality or human health.
Duke Point's economics are sound. Duke Point will only run when economic; its average cost of power is estimated to be $68 per MWh, making it the most cost-effective resource considered.
Other economic benefits of the project include a $50-million savings for B.C. Hydro by engaging a private partner to build the facility, more than $280 million in new investment and 200 construction and 16 new full-time jobs in Nanaimo.
The hearing's record shows the Duke Point power project, after undergoing extensive public scrutiny, to be good for Vancouver Island and cost effective for B.C.'s ratepayers. No substantive evidence indicated otherwise.
- Jeff Myers is president of Pristine Power Ltd.