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IN HIS July 3 column "Island Hydro project on the fast track?" Les Leyne wondered if the provincial government would break its election promises by approving B.C. Hydro's Nanaimo gas plant without allowing a review by the B.C. Utilities Commission.

Good question.

In the mid-1990s, the province's new environmental assessment was designed to mesh with the review process of the commission for energy projects. The commission would review project justification, comparing for example the current natural gas strategy of B.C. Hydro with alternatives in terms of their financial, environmental and social qualities.

For major projects, the commission would hold a public hearing and then decide whether or not to issue a certificate of public convenience and necessity (CPCN). This option was followed for B.C. Gas's southern crossing pipeline in 1999.

An alternative would be to have the commission publicly review the project and then make recommendations to government for its final decision. This option was followed with the Site C dam in 1981, B.C. Hydro's export certificate in 1992 and the Kemano II project in 1994.

With a CPCN from government or the commission, an applicant would then proceed to the Environmental Assessment Office for the review of detailed environmental impacts in hopes of final approval, as occurred with B.C. Gas's pipeline, which was the first significant energy test of the new process.

This process reflects the approach of most jurisdictions in industrialized countries. It reduces the risks of making big mistakes by subjecting proposals to outside scrutiny, allowing different interests to be heard. It also minimizes the regulatory burden; the environmental review is limited to project improvement once a project has been approved by the commission.

Why would British Columbia not follow this process for B.C. Hydro's plan to build a natural gas pipeline to Vancouver Island and one or more natural gas plants to generate electricity?

With the pipeline at $260 million, the Nanaimo plant at $370 million, and at least one more plant, the total investment will exceed $1 billion, most of it public money.

There are capital cost risks; the last pipeline ran 100 per cent over budget. There are energy cost risks; recent projections by the Canadian Association of Petroleum Producers suggest natural gas prices could be higher than forecast by Hydro.

And evidence from other jurisdictions indicates that alternatives to Hydro's approach may incur less financial risk and less environmental impact.

Why would a government that campaigned so ardently against risking public money on megaprojects not pause long enough for an open public review of a $1-billion risk that is comparable in size to the fast ferries fiasco it criticized so harshly? Why would it instead use a loophole created by former premier Glen Clark to exempt Hydro from commission oversight?

I don't know. But Hydro argues that we don't have time, that the Nanaimo plant is needed by 2004 to prevent brownouts during peak demand periods.

Because of all the uncertainties, the cost of Hydro's approach to meeting the Island's peak demand is difficult to estimate. The cost depends on how often the plant runs, because the capital costs of the pipeline and plant are only recovered by the throughput of natural gas and the output of electricity.

The plant may not run often because the existing electricity sources for the Island have lower operating costs: 240 megawatts from the co-generation plant in Campbell River, 450 MW of on-Island hydropower and 1,200 MW of mainland supply from the undersea 500 kilovolt lines, which will be low-cost hydropower under normal and high water conditions. If the plant only runs 25 per cent of the time -- to meet peak demand -- its electricity could cost well over 12 cents per kilowatt hour.

If the government shares Hydro's concern about brownouts, but also wants to keep its election promise, it can require Hydro to put out a request for proposals tomorrow for short-term peaking help on the island, and offer to pay up to the cost of peaking power from the Nanaimo plant.

The response, which will be large, will include co-generation by gas consumers (hospitals, universities, commercial buildings, small industry) whose gas consumption conveniently matches the electricity peak, offers to interrupt peak electricity or natural gas use (freeing up peak gas for the Campbell River plant), peak electricity efficiency, peak electricity load shifting, and any alternative energy that can guarantee peak output (some small hydro and perhaps wood waste).

A strong response will allow time for a proper review and save money by delaying the plant with lower cost alternatives.

If government decides to go ahead with this $1-billion investment, without even a public review and without testing the alternatives, it might at least stick to its new spirit of accountability by making the politicians personally liable for cost overruns.

Perhaps some of the fast ferry costs, too.

Mark Jaccard is a professor in the school of resource and environmental management at Simon Fraser University. From 1992-1997 he was chairman of the B.C. Utilities Commission.