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B.C. Hydro's $710-million plan to keep the lights burning on Vancouver Island was dealt a major blow this week with credible private sector sources saying they can achieve the same goal in a faster, cheaper, and cleaner fashion.

In submissions of evidence to the B.C. Utilities Commission, NorskeCanada and Terasen Gas (formerly BC Gas) said they can meet the Island's looming electricity needs without either of the expensive and controversial projects proposed by Hydro.

Hydro proposes a $370-million, 265-megawatt gas-fired generation electrical plant at Nanaimo, fed by a $340-million gas pipeline across the Strait of Georgia.

The alternatives put forward by Terasen and Norske would be less dependent on natural gas, produce less greenhouse gas emissions than Hydro's scheme, and leave more room to explore green and alternative energy options in future.

Norske says it would provide more electrical capacity at a proportionately lower cost than Nanaimo by installing co-generation turbines at its three Vancouver Island pulp mills.

"We've put the challenge forward, saying 'Here's a suite of projects we could do, that are actually superior to the ones that are on the table,'" said Stu Clugson, NorskeCanada, vice-president of corporate affairs.

However, the real bombshell proposal came from Terasen, which challenges Hydro's plan for the controversial 137-kilometre Georgia Strait Crossing (GSX) gas pipeline between Washington state and the Island.

It says it can supply the Nanaimo plant with gas, simply by boosting compression in its existing gas line to the Island, at a cost that works out to be $179 million cheaper over 20 years --in today's dollars.

The BCUC's hearing of a Hydro application to build a gas-fired electrical generating plant at Nanaimo begins June 16, with the submissions from Norske and Terasen filed this week as evidence to be considered by the commission.

The GSX line is the subject of a separate federal proceeding. The hearing has concluded but a ruling is several months away.

Norske is B.C. Hydro's largest industrial customer while Terasen Gas has 850,000 residential, commercial and industrial customers in B.C.

As envisioned by Hydro the GSX line would be built in partnership with Oklahoma-based Williams Co., running from Sumas, Wash., to Cherry Point and across the Strait to Nanaimo, primarily to feed a generating plant at Duke Point but also available to other industrial consumers.

It has drawn strong opposition from environmental and community groups because of its air quality impacts, and its built-in intention to make future upgrades to the Island's electricity grid through increased dependence on gas-fired electrical generation.

Arthur Caldicott, a director of the GSX Concerned Citizens Coalition, wondered Tuesday why Hydro didn't consult with Norske or Terasen before it initiated the projects.

"It makes Hydro look incompetent, as if they didn't talk to anybody," said Caldicott.

"Terasen can do it themselves -- which begs the question: 'How did we get this far? Why weren't these guys talking to each other?"

Norske's evidence seems to confirm that concern -- it says it approached B.C. Hydro in 2001 but was unable to reach agreement on major projects "or in fact to develop a clear view of the economic requirements for a successful project."

Caldicott acknowledged that the Norske and Terasen proposals would boost greenhouse gas emissions on the Island but noted that they would be 20 per cent lower than what Hydro proposes.

He added that they would represent a good short-term solution to the Island's energy needs, allowing maturing green and alternative energy to "pick up the slack" in the future rather than building a major new gas line that would increase the Island's reliance on natural gas.

Terasen says it can deliver all the gas necessary to serve the ambitions of either Hydro or Norske.

"Over 20 years you would save $179 million," said Dave Bennett, manager of planning and business development for Terasen's Vancouver Island operation.

"It's lower cost now, and it's less risk. You're putting in smaller increments of capital that can be scaled back if forecasts change or the market changes.

"It always makes sense to expand things in a scalable way. Once you've put GSX in the ground you pretty well need a lot of new demand to make it economic."

Bennett said Terasen did not intervene in the GSX hearing, which wrapped up earlier this year, because the Vancouver-based company felt the B.C. Utilities Commission was a better forum for presenting its alternatives.

"This is a better forum to look at the issues of the power plant combined with the gas infrastructure.

"Under certain circumstances the GSX makes a lot of sense -- if you have a lot more load on the system, more plants being built on the Island or whatever.

"Given what's been proposed by Hydro we think that our proposal is a lower cost."

The B.C. government has already indicated a lack of enthusiasm for B.C. Hydro running the Nanaimo plant.

It has indicated it would prefer to turn it over to the private sector -- if the Utilities Commission allows it to proceed.

Norske made public last month at a BCUC workshop its proposal to use natural gas and biomass to drive new turbines at its three Vancouver Island pulp mills.

Those turbines would generate 364 megawatts at a cost of $450 million compared to 265-megawatts at the gas-fired plant Hydro proposes for Nanaimo.

"The workshop was to whet people's appetite for the notion," said NorskeCanada's Stu Clugston.

"Now we've gone ahead with a detailed confirmation of what the project would look like in engineering terms."

"It's really a challenge for Hydro to show that it's proceeding with the right project to address the energy needs of Vancouver Island."

Hydro media relations manager Elisha Moreno said the rules governing BCUC hearings limit what the Crown corporation can say about the competing proposals.

But Moreno did say that Hydro would welcome both projects as "complementary" to its own initiatives and hopes they will proceed irregardless of the outcome of the BCUC hearing.

She said Hydro's mandate compels it to make absolutely sure that the Island's electricity needs are met and the corporation is not willing to risk the possibility that those needs would be compromised.

"We need to guarantee that the electricity supply will be there. We can't jeopardize that," Moreno said.