The VIGP hearing ended today. The morning was largely occupied with the ad-hoc-
scheduled Panel 7 of BC Hydro, consisting of Bob Elton, Mary Hemmingson and
Dawn Farrell. They responded to questions about the CFT (call for tenders)
proposal that BC Hydro put out yesterday.

Parties seem to continue to have similar concerns to those expressed before:
How can bidders have confidence that the process will be sufficiently open and
fair not to be a foregone conclusion in favour of BC Hydro's VIGP/GSX?


The Panel Chair, Robert Hobbs intervened with a suggestion that BC Hydro and
Terasen should combine their efforts to produce a model of the costs of the
Terasen upgrade alternative to GSX. This suggestion was endorsed by both VIEC
(Hydro) and Terasen, so we can expect to see, shortly, some narrowing in
positions of VIEC and Terasen as to the cost of the Terasen alternative
relative to GSX. This will likely help Norske (and possibly others?) to make
competing bids against GSX, based on supply by Terasen.

Apart from this issues, however, there remain many problems with Hydro's
proposed CFT process. Why, for example, should there be a cap on the profits of
an independent power producer? Will greenhouse gas liability be included as a
cost factor or simply be listed as a nice thing to think about?

The CFT process is going to undergo some refinement over the summer. Bidders
will start to get info on which they can start preparing bids in September (if
I recall correctly). The qualification, bidding and acceptance process will
continue through to March 2004, which is the last date at which BC Hydro can
delay ordering a turbine for their fallback position of doing VIGP. BC HYdro
will be the primary arbiter of the bids, with the "independent reviewer" having
a fairly limited role of monitoring that the process has been fairly carried
out. This situation wiht Hydro in control, annoying as it may seem, is probably
more or less necessary, given Hydro's basic obligation to ensure electricity
supply, which cannot be delegated.

I would suggest that this translates into a political thing for the public: get
those letters flowing to the Minister of Energy, the Premier and BC Hydro. If
Hydro thinks we've gotten tired and gone away, that will increase the chances
that none of the VIGP alternatives will be found to be acceptable. Remember,
from Hydro's point of view, building VIGP and GSX really would be a lot less
headaches.

This seems a good time to pay tribute those non-corporate participants who
stuck it out not only through the 2 weeks in Nanaimo but also the 4 days in
Vancouver. It's been a long haul, and a challenge to stay on top of things:

Jim Campbell, who has tirelessly promoted the down-stream benefits;
Dyane Brown for SPEC
Jim Parr
Michael Doherty for BCPIAC
Bill Andrews, counsel for GSXCCC
myself, Tom Hackney

Did I leave anybody out?
Tom Hackney