Hydro's Duke Point power deal on hold

Scott Simpson
Vancouver Sun
March 05, 2005

B.C. Hydro is delaying work on its controversial $285-million Duke Point power deal, with the public utility saying court injunctions from industry and environmentalists could even kill the project.

Hydro has secured an agreement with its private sector partner to delay work on the project while opponents go before the B.C. Court of Appeal in a bid to stop the Vancouver Island project.

Hydro announced the delay on Friday after filing a letter to the British Columbia Utilities Commission.

Hydro was supposed to collect $45 million from Duke Point Power on Friday as the first payment on a contract to operate a gas-fired generating plant near Nanaimo.

Hydro vice-president Bev Van Ruyven said that payment has been suspended, and would be forfeit if the deal is overturned in court.

Van Ruyven said that Hydro and Duke Point will also have to make penalty payments to contractors in the event that court proceedings delay the project past June 30, but said those costs would be relatively minor.

"We don't have any control over it, other than going and arguing at the appeal courts so, yes, we're very concerned," Van Ruyven said.

"Our concern is all about getting a project there that meets reliability standards, and getting it on time."

The BCUC approved the deal between Hydro and Duke Point Power in mid-February.

Hydro wants the gas-fired plant in operation by 2007 in order to head off an anticipated risk of rolling blackouts on the Island during periods of peak winter electricity demand. But industry and a coalition of citizen and environmental groups contend that the commission had predetermined the outcome of a hearing into the project's merits.

The Joint Industry Electricity Steering Committee, representing the province's largest industrial consumers of electricity, believes the project exposes all Hydro customers to what it describes as "unacceptable high levels of cost and financial risk."

The JIESC calculates that electricity rates will rise by more than two per cent and wants Hydro to find a less expensive solution.

The GSX Concerned Citizens Coalition and its affiliates are also seeking to overturn the BCUC's order on the grounds that the commission's decision was biased and should be overturned.

In a letter this week, the coalition said that BCUC panelists Robert Hobbs and Lori Boychuk acted "in a matter to create a reasonable apprehension of bias."

"Specifically, the commission panel held discussions with Hydro witnesses
that gave rise to the impression that the Panel had made up its mind about
the outcome of the review before all the parties had brought their evidence
and argued their cases."

© The Vancouver Sun 2005