Island Cogen ownership change won't affect plant

Ownership change won't affect cogen plant

Grant Warkentin
Campbell River Mirror
20 August 2004

The cogeneration plant north of town won't be affected by an $806
million deal between Calpine and PrimeWest.

"We're business as usual," said Susan Dowse, Calpine Canada's public
affairs manager. "Our core business - being a power generation
business in Canada - is unaffected."

On Monday, the Calgary-based PrimeWest Energy Trust announced it was
going to buy all of the petroleum and natural gas assets owned by the
California-based Calpine. Its Canadian operations are also based in
Calgary and, through the Calpine Power Income Fund, the company owns
the natural gas cogeneration plant north of Campbell River beside the
Elk Falls paper mill.

The deal, which will see PrimeWest take ownership of all of Calpine's
petroleum and natural gas revenues, is worth about $806 million.

However, Dowse said, nothing will change at the Campbell River
cogeneration plant.

The plant recently underwent a $20 million upgrade which allows it to
produce a total of about 250 megawatts of electricity. The plant is
also looking at another upgrade that could allow it to generate an
additional 49 megawatts of electricity. The project is on BC Hydro's
shortlist of power generation projects it is considering for Vancouver
Island.

The project proposes to build an additional, smaller natural gas-fired
turbine to the plant, which will be able to produce up to 49
additional megawatts of electricity. The plant's current total
capacity is 230 megawatts and is undergoing an upgrade to allow it to
produce 20 more. If the addition is approved by BC Hydro, the plant
will be able to produce about 300 megawatts of power in total, about
enough to power NorskeCanada's Elk Falls paper mill as well as the
rest of Campbell River.

The upgrade will also allow the plant to produce more steam, which it
provides to NorskeCanada's Elk Falls mill to use in its papermaking
process.

The new addition, if approved, would cost about $1 million per
megawatt to build, a total cost of about $49 million. Judging by how
many contractors a $20 million upgrade brought to Campbell River
earlier this year - about 150 per day - plant manager Curtis Mahoney
said the project would be good for the local economy.

"That will be a big project for here," he said.

However, he added, it wouldn't create any new jobs.

Campbell River Mirror