VIGP Daily Hearing Summary For Wednesday, June 25
DAY 8
The day commenced with the Commission Chair proposing a schedule for written
argument at the end of the hearing. The proposed schedule would also see a
brief oral summary of argument. BC Hydro would file its argument on July 14,
intervenors would file argument on July 21 and BC Hydro would file a reply
on July 25, and then at that time the Commission Panel would advise as to
whether there would be on oral summary day on July 28. The Commission Panel
will make their final determination within the next few days on this
schedule.
Mr. McKechnie cross-examination of BC Hydro Panel No. 4:
Mr. McKechnie began his examination with questions concerning the gas price
model used by BC Hydro and the system simulation model that forecasts the
dispatch of BC Hydro resources. There was a query regarding what would
happen with an N-3 failure on Vancouver Island followed by questions
focusing on the ability to bring the transmission option to Vancouver Island
forward in its schedule. Mr. McKechnie also developed a Portfolio 5, which
was entered as an exhibit. His Portfolio 5 would see the 230 kV AC
transmission lines fast-tracked to 2006/07. In addition, as much on-island
green generation as possible would be developed, peak management techniques
would be used to reduce the peak demand and the committed VIGP components
would be relocated to the Burrard Thermal generating station. BC Hydro
commented that the advancement of the 230 kV line to 2006/07 would not be
possible, and in fact, BC Hydro would already face some difficulty in
meeting a possible 2007/08 date if the cable was to be installed as quickly
as possible. BC Hydro also stated that there was little use in relocating
the committed VIGP assets to Burrard Thermal.
Ms. Mary Rose cross-examination of Panel No. 4:
Ms. Rose had questions regarding the load/resource balance and short-term
risk that BC Hydro was facing. A discussion also was had between the panel
and Ms. Rose regarding the amount of voluntary reductions that are typically
seen under Power Smart programs and load reduction programs in other
jurisdictions.
Mr. James Campbell cross-examination of Panel No. 4:
Mr. Campbell entered a large number of exhibits for use in his cross. He
began with several questions concerning the consistency of amounts used in
the Application and exhibits. There then followed a long series of questions
regarding the Downstream Benefits ("DSB") and the ability of BC Hydro to
purchase and use the DSB's. Eventually the Chair interrupted and reminded
the hearing that there had already been a thorough discussion of the DSB's
through the examinations by several previous intervenors. He stated that
there was adequate information on the record regarding DSB's and did not see
the need for further investigation on the matter. There followed some
questions regarding the Port Alberni Aluminum Corporation and its plans for
a smelter in Port Alberni. Mr. Campbell completed his cross with some
questions on the natural gas price risk, the future price of natural gas and
its effect on the price of electricity.
JIESC cross-examination of Panel No. 4 (conducted by Mr. Charles Bois):
The JIESC had a lengthy cross-examination of the panel, which took up most
of the remainder of the day. The questions started with an examination of
gas utilization rates and the amount of gas consumed in electricity
production. There then followed a series of questions on congestion on
transmission lines, with a particular focus on the operation of the BC Hydro
system and constraints on the mainland export line to the U.S. There was
then a discussion regarding the scenarios for the dispatch of border gas
plants under various pricing scenarios, how the gas price is set by the
market and the relationship of the Alberta market to the rest of the western
gas markets. Further questions followed regarding the cost of electricity
and the impact on BC Hydro's portfolios, why more portfolios were not
developed in the application, and the extent to which other resources were
looked at (e.g. green, CBG, etc...).
Following the afternoon coffee break, the Chair had some further comments to
make regarding the receipt of argument by the Commission upon completion of
the hearing. The Chair is proposing that the there will be a written and
oral argument and that for the oral phase, only certain intervenors may be
invited to give oral argument and only a small range of issues will be the
subject of the oral argument.
Resumption of JIESC cross-examination of Panel No. 4:
The examination resumed with questions regarding the dispatch of the VIGP
and the price of gas. BC Hydro reiterated to the Commission and intervenors
that the VIGP should not be considered as a stand-alone facility, but as a
component of BC Hydro's integrated system. There followed a series of
questions dealing with comparisons between IPPs and VIGP, the dispatch of
VIGP if mid-C prices are below the unit cost of the plant, dispatching of
VIGP and the use of the simulation model to forecast the dispatch, further
questions regarding the transmission constraint across the Canada/U.S.
border and a series of questions regarding coal generation and coal
development in BC. The JIESC completed their cross with a long set of
questions testing, probing and challenging BC Hydro's three portfolios and a
request that BC Hydro run a series of alternate portfolios under differing
scenarios, such as repowering Burrard Thermal or only placing a peaking
facility on Vancouver Island.
Commission counsel cross-examination of Panel No. 4:
The bulk of the Commission counsel's questions concerned BC Hydro's
portfolio analysis and how that analysis was carried out. For the most part
the questions were seeking either confirmation or more information on the
assumptions used in the portfolios. There were also questions that dealt
with the cost of service of the VIGP and these were referred over to Panel
No. 6. BC Hydro was asked to provide the NPV and analysis of a "green"
portfolio. The day finished up with a series of questions on the Levelized
Unit Energy Cost and the Levelized Unit Capacity Cost of the VIGP and
various alternatives as requested in Commission information requests.
Day 9 began today with the continuation of the cross-examination of Panel
No. 4 by Commission Counsel. Panel No. 5 will begin after the completion of
Panel No. 4, which is expected to be mid-morning.