Island plant held up for private-sector input

Hydro will investigate alternatives to building major gas-fired Duke Point generator

Scott Simpson
Vancouver Sun
January 16, 2003

Saying it wants to investigate private-sector alternatives to address Vancouver Island's looming electricity shortfall, B.C. Hydro is deferring a proposal to locate a major new gas-fired generating plant at Nanaimo.

Hydro will defer its application to the B.C. Utilities Commission for a "certificate of public convenience and necessity" before it proceeds with the plant.

However, Hydro acknowledged the need to keep pace with Vancouver Island's population-driven requirement for additional electricity supply.

"There is a need for additional generation on Vancouver Island if our customers are to maintain the high reliability of supply they have enjoyed until now," Hydro said in a statement.

The announcement is the latest development in the tumultuous history of the Duke Point project, which was presented by Hydro in the late 1990s.

The plant has been mired in controversy that has had community, environmental and industry representatives expressing reservations about the way the project was being handled by government and by Hydro.

Potential adverse air-quality impacts were also cited by a federal joint review panel that delayed for a full year a public hearing examining both Duke Point and the proposed GSX Georgia Strait crossing project to build a gas pipeline to the Island.

That delay drew criticism from Hydro.

Only last spring, Hydro said the Island's energy needs were urgent enough for the 265-megawatt plant to be on-line by 2004, with the Crown corporation promising to soldier on after its private-sector partner Calpine pulled out.

In October, Energy and Mines Minister Richard Neufeld said Hydro would carry the project forward, but would then turn it over to a private operator in keeping with B.C.'s intention that future growth of electrical generation in the province be building major gas-fired met by private-sector initiative.

Now, Hydro isn't committing to a time for resuming the project and does not have anyone to take it on.

"This delay is required to allow assessment of opportunities involving customer generation that have recently been brought to B.C. Hydro's attention," said Hydro's senior distribution vice president Bev Van Ruyven.

She said Hydro is considering customer proposals that would provide new electricity supply or reduce consumption to a degree that would delay the need for new generation sources.

Van Ruyven said Hydro seeks proposals from customers every six weeks on a competitive basis and cited Wednesday's announcement of a $28-.milllon deal with Weyerhaeuser as an example of a project that will divert large volumes of electricity to other customers.

"Depending on the results of this analysis, these opportunities could affect the timing of [the] Vancouver Island project," it announced.

"We are mandated to get the lowest-cost resources possible, and customer generation is one of the ways we do that. There is no question Vancouver Island still needs the Duke Point plant. It is just a matter of when."

The announcement drew a mixed reaction from the GSX Concerned Citizens Coalition, which opposes the project based on air quality and other environmental impacts.

Coalition representative Arthur Caldicott worried Hydro may be looking for a way to circumvent the utilities commission process but he said there was reason for optimism as well.

"If BC Hydro is discovering sources of power that do not require a Vancouver Island generation project, this is probably a good thing," Caldicott said.

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