Hydro silent on payments to Island power producer

Scott Simpson
Vancouver Sun
14 Dec 2004

Pristine Power is to build a power generation plant near Nanaimo

BC Hydro is coming under heavy criticism for its secrecy about the price it will pay for electricity from a proposed power generating facility on Vancouver Island.

Stakeholders expect the gas-fired plant near Nanaimo to drive up electricity prices for all Hydro customers in B.C. -- but said on Monday that it's impossible to fairly evaluate the project when a key piece of information is missing.

The Pristine Power project is planned to undergo a hearing in front of the British Columbia Utilities Commisson next month.

"This is a 25-year-minimum project, and we have no idea what we are getting into," said Jim Quail, legal counsel for the B.C. Public Interest Advocacy Centre, on Monday.

"It might be a great price. It might be a terrible price. Either way, it's going to have an impact on the rate that we all pay for our electricity, possibly for a long time to come."

Hydro announced on November 3 that it had selected Pristine Power to carry forward a minimum $280 million project to build a generating plant at Duke Point near Nanaimo in an effort to address a looming electricity shortfall on Vancouver Island.

Neither Hydro nor Pristine would disclose how much Pristine will be paid for its electricity.

Later that month the British Columbia Utilities Commission (BCUC) appeared to agree that the details should remain secret -- disappointing Hydro watchdog groups that represent industry as well as ordinary consumers.

Hydro maintains that price information must remain confidential, in order to protect bidders' competitive interests -- particularly as future opportunities emerge for private sector companies to join the province's electricity grid.

"It's purely for competitive reasons and bidders have reinforced to us that it's critically important for them to participate in these types of processes that maintain confidential their bid information," said Mary Hemmingson, Hydro's power planning manager.

Hemmingson said Hydro has received 500 information requests from stakeholders in advance of next month's hearing and said those requests will be met by a BCUC-imposed deadline of this Friday.

"The one piece we don't feel is appropriate to release -- because it could compromise the competitive process -- is the specific price information for either the successful bidders or the unsuccessful bidders," Hemmingson said.

She added that the BCUC has endorsed Hydro's request for confidentiality on the Pristine bid -- and noted that the commission will itself review the price information and make its own determination about whether the cost of the project is appropriate.

The price of Duke Point energy is partially contingent on the price of natural gas -- and will assuredly be more expensive than what consumers now pay for a system that is dominated by low-cost hydroelectric generating facilities.

The project has also attracted controversy because it resurrects a BC Hydro Vancouver Island energy plan that the utilities commission decided last year was too expensive.

The rewritten plan requires Hydro to book $70 million in corporate writeoffs which will ultimately be borne by the province's taxpayers, based on costs already incurred by Hydro in its own, earlier, efforts to carry the project forward.

© The Vancouver Sun 2004