January 30, 2005
Arctic ice cap 1979 vs 2003
RECENT WARMING OF ARCTIC MAY AFFECT WORLDWIDE CLIMATE
Side by side comparisons of Arctic sea ice from 1979 and 2003.
Click on image for larger version
Click here to go directly to images, animations and additional information
Recently observed change in Arctic temperatures and sea ice cover may be a harbinger of global climate changes to come, according to a recent NASA study. Satellite data -- the unique view from space -- are allowing researchers to more clearly see Arctic changes and develop an improved understanding of the possible effect on climate worldwide.
The Arctic warming study, appearing in the November 1 issue of the American Meteorological Society's Journal of Climate, shows that compared to the 1980s, most of the Arctic warmed significantly over the last decade, with the biggest temperature increases occurring over North America.
article continues NASA website
Thanks to Dr. Steven Searle of Malaspina University College who included these images in his presentation to Nanaimo City Council on January 24, in which he was raising the issue of Duke Point Power, greenhouse gases and global warming.
January 28, 2005
Hackney's Hearing Notes (Days 1-9)
Day 1, Jan 17, Monday
Day 2, Jan 18, Tuesday
Day 3, Jan 19, Wednesday
Day 3, Jan 19, Wednesday, in camera
Day 4, Jan 20, Thursday
Day 5, Jan 21, Friday
Day 6, Jan 22, Saturday
Day 9, Jan 27, Thursday
Duke Point Power VICFT-EPA Hearing Day 9 Jan 27, Thursday
Hi all,
It seems I forgot to issue reports on the progress of the hearing for a couple of days.
Monday, GSXCCC filed its motion that the BCUC review Panel, Robert Hobbs and Lori Boychuk, disqualify itself on the grounds of apprehension of bias, i.e. that a reasonable person, apprised of the panel's words and actions around the in camera session on Wednesday, would conclude that the panel had made up and closed its mind about the outcome of the review.
The JIESC witness panel was also heard. Sheldon Fulton, energy expert, analyzed BC Hydro's data and concluded that the Duke Point Power plant would be dispatched much less than BC Hydro claims, due to its being relatively expensive and uncompetitive to run, and thus it would be more costly to ratepayers. Fulton also has an interesting idea that BC Hydro (and others) ought not to rely on gas price forecasts; rather they should rely on forward prices generated by the futures market (because the market "never lies").
Monday was the deadline for intervenors to file motions on the bias topic, and GSXCCC's motion was the only one filed.
Tuesday, there was no hearing, as parties consulted with their clients and prepared their responses to the GSXCCC disqualification motion.
Also, Tuesday evening, people unable to attend the hearing had the chance to respond to the motion. Half a dozen or so wrote in support.
Wednesday was entirely taken up with GSXCCC making its motion orally, intervenors speaking in support (8 or so, including Joint Industry Electr9city Steering Committee and others); and those against, (BC Hydro, Duke Point Power, Terasen Gas, VI); followed finally by GSXCCC's rebuttal.
Thursday, proceedings reconvened at 1:30. At that time, the Panel dismissed the GSXCCC motion for disqualification, with reasons to follow. Mr. Andrews made a motion asking that Mary Hemingsen of BCH be recalled to testify regarding the in camera meeting, including to confirm if indeed BC Hydro thinks that the DPP project before the commission is really not the most cost effective project, as seems to be the case.
Commission Panel dismissed this motion, too.
Next, GSXCCC brought up its witness panel: Steve Miller and Dr. Mark Jaccard.
Both, IMHO, were brilliant. Steve demonstrated several shortcomings and inconsistencies in BC Hydro's forecasting methodology, leading to and over-stated forecast. Cross-examination by Sanderson of BC Hydro failed to move him. In fact, at one point, Sanderson had to take a break to consult with his supporters because he didn't have the statistical depth to understand what Steve said.
Dr. Jaccard testified that BC Hydro's and DPP's ploy to put greenhoue gas liability off the table by having DPP take it all on might not work because GHG liability might attach to the fuel source itself, which is BC Hydro's responsiblity. Keogh of DPP cross-examined Jaccard for quite a long time, apparently trying to find weaknesses in Jaccard's experience or methods. He made no progress, as Jaccard is impressively experienced in all aspects of this, and hightly qualified and expresses himself very cogently. Keogh tried to offhandedly say that Jaccard's opinion of China's GHG plans was just an opinion, and Jaccard responded in detail with he extensive interactions with the Chinese, who are apparently making significant efforts to curb GHG and develop policies, even though they are not yet signatories to the Kyoto Protocol.
BC Hydro's rebuttal panel was sworn. It includes Dr. Pickel -- a rematch of Pickel vs. Fulton is thus in the offing, as they both appeared that the VIGP review. BC Hydro also called the head of the company that has the Henwood model for modelling fuel and electricity prices. This seems to indicate that BC Hydro is calling out the very big guns to try to counter the claim that DPP would not be dispatched much and would thus be a white elephant.
This panel will continue tomorrow.
It is expected that the hearing portion will be over on Friday, maybe in the morning.
After that, BC Hydro will presumably be called on to file its written argument. Then the written argument of intervenors. Dates not yet set. Then BC Hydro's rebuttal argument. The panel's committed decision date of 17 February still stands.
Summary of the current situation re the case against DPP, as seen by GSXCCC, et
al:
Cost:
$35 m per year for 25 years, just to have DPP ready to dispatch. On top of that, BC Hydro would have to pay for gas and operating costs to run the plant.
BC Hydro's cost modelling has been shown to be not reliable, since they are now second-guessing their own cost model that showed DPP without duct firing to be the "lowest cost" winner of the Call For Tenders.
North American gas supplies are in crisis now as conventional supplies dry up. The proposals to build LNG facilities all over the NA coast is a measure of the desperation of the situation. Not a good time to be committing to more reliance on gas.
Urgency:
Yakout Mansour, head of BCTC has confirmed that the October in-service date for the new cables is confidently expected to be October 2008. He has a fair amount of comfort that the old cables will be able to deliver 200 MW after the zero-rating date of 2007.
Steve Miller has exposed and continues to expose BC Hydro's pattern of padding the load forecast. His more conservative approach has knocked 90 MW off the forecast. While we don't minimize the risk of under-supply, there is also a real risk and cost with over-supply.
GHG emissions:
The public has spoken loud and clear: they are concerned about greenhouse gas emissions and want BC Hydro to work to reduce them.
BC Hydro claims it has passed off all liability to Duke Point Power; however, this does not address the public concerns, as there is no reason to believe DPP will offset the emissions. At the same time, the legal evasion may not even work, according to Dr. Jaccard's testimony. Carbon liability may attach to the gas supply itself, which is BC Hydro's responsibility.
Bias:
GSXCCC believes that a reasonable person, apprised of the facts would conclude that the Panel Chair has made up his mind on the outcome of the project in advance of having heard all the evidence. In addition, by not immediately informing all parties of significant new information about BC Hydro's second-guessing of its own cost analysis, the Panel Chair deprived the intervenors of the chance to cross-examing BC Hydro witnesses on this information.
CFT fairness:
Information, partly still held confidential, reveals that BC Hydro no longer believes that the DPP winner of the Call For Tenders is the most cost-effective solution to the energy problem, even though its cost assessment model picked DPP without duct firing. Now, for reasons not revealed, Hydro thinks a non-winning variant of DPP is more cost effective than the winner, and they have had discussions with the BCUC about how to overturn the CFT results and have the with-duct-firing alternative win. This calls into question the integrity of the whole CFT process.
I'm not sure what to do with the last point, as we aren't bidders ...
Tom Hackney,
Vancouver
Duke Point Power VICFT-EPA Hearing Day 6 Jan 22, Saturday
The day started quietly enough with the witness panel for Green Island Energy taking its seat in the witness stand. There were few questions and I expected it to be quickly over; however, intervenor Keith Steves came forward and instead of beginning a cross examination, expressed his outrage to the panel over the in camera meeting transcript. He brought a motion for reconsideration regarding the matters discussed in camera (I would have to review the transcript to determine the exact nature of the motion =-- it may not have accorded with normal legal procedure).
There was a considerable amount of discussion following. Bill Andrews for GSXCCC, BC SEA and SPEC, stood and gave notice that he would file a motion regarding the in camera proceedings. Several intervenors said they needed to consult their clients. Several said they were not sure what motion was going to be considered. Panel called a brief break, during which time the intervenors adversed in interest to BC Hydro and Duke Point came together and worked out an orderly approach. Which was:
Steves withdrew his motion to reconsider. Bill Andrews made a formal motion for the panel to be dismissed due to a reasonable apprehension of bias, with written reasons to follow. He also made a subsidiary motion for the hearing of evidence to be suspended on the grounds that it would be inherently wasteful of time (i.e. if the panel gets disqualified, there will need to be a new panel to rehear the whole case). Also that the witnesses would feel uncomfortable giving evidence under the circumstances in which there is a motion suggesting that the panel is biased.
Result:
Bill will file the motion in writing with reasons, deadline 4:30 Monday. Others who want to file similar or related motions around the same material should do so at the same time.
Intervenors who can't come Wednesday to argue regarding the motion(s) can do so electronically by Tuesday 8 p.m.
Intervenors who can come will orally address the motion(s) on Wednesday morning.
The GSXCCC witness panel will not be called before Thursday a.m. However, the JIESC panel will go, as scheduled, on Monday, as will the Commercial Energy Consumer panel.
We live in exciting times.
Tom Hackney
Vancouver
Transcript: Jan 22, Saturday
TOP
Duke Point Power VICFT-EPA Hearing Day 5, Jan 21, Friday
Duke Point Power Project EPA review, Day 5, Friday, 21 January 2005
(some hot news!: see below)
Having disposed of the last of BC Hydro's four witness panels on Thursday, the BCUC Panel moved on to the evidence of the Duke Point Power witness panel. We finished the day with the BC Transmission Corporation witness panel and are now 1/2 day ahead of schedule. Because the intervenor witness panels were given over-generous time allotments, this means that we can expect the hearing to move substantially ahead of schedule. GSXCCC, et al's panel is quite likely to go on Monday, instead of starting Tuesday night. Witnesses, be ready.
Duke Point Power's witness panel consisted of Jeffry Myers of Calgary, former president of Westcoast Power, Inc.; Harvie Campell, of Calgary, former VP of Westcoast Power, also formerly VP of the ICP project in Campbell River; and Kenneth Spinner, former VP of New Ventures, Fletcher Challent Energy.
Some interesting points of testimony, larded with free enterprise comments designed to tell the BCUC panel that they were doing the right thing in supporting a CFT.
(a) Duke point power is not designed to take dual fuel (distillate), and it would be problematic for them to do so, technically and from the point of view of permits.
(b) Duke Point Power will have duct firing
capability, notwithstanding that the EPA has no contractual call for duct firing. Duct firing adds some 28 MW of capability to the plant, bringing it up to virtually the capacity of VIGP. In fact, from DPP's perspective, it is virtually the same project -- has to be because, as said yesterday, they anticipate using the same Environmental Certificate as the one granted for VIGP, and they anticipate only the formality of informing the government of a change of ownership, not a substantial change.
(c) BC Hydro scenarios for
supplying gas to DPP via barge, etc. were more or less confirmed to be theoretical, not plausible.
(d) DPP has consulted "extensively" with government
on the question of Greenhouse gas liability. We already knew DPP has assumed all the potential liability for this. This information on their research suggests that they were somewhat more prepared to face public discussion than was BC HYdro ; however the conclusion is problematic. GSXCCC cannot find any cost factor in the limited information available to us to indicate that any cost was assigned to potential GHG liability, and we think probably no cost was assigned. There is lots of political resistance to GHG liability at the federal level, with the government being extremely compliant to industry demands. Unfortunately, that means that industry can with some assurance ignore this issue. In the VIGP review, the BCUC commission had approved the notional amount of $3.60/MWh for GHG liabilty from gas fired generation, corresponding to $10/tonne CO2 offset cost. However, DPP was not even aware of this and did not consider it relevant to its cost calculations. Not only did DPP decline to say how much $ they had allowed for this, but they declined to indicate if they had allowed more or less than the BCUC had. And the COmmission chair backed up this confidentiality, refusing for the information even to be given to the BCUC in confidence. The policy implication is that the independent power producer's economic confidentiaily arguments will now become a screen to allow companies to completely ignore GHG issues, and the public will have no ability to discuss that potential downside to fossil fuel energy projects because BC Hydro will argue that they (and therefore the ratepayers) are off the hook for any liability.
In the break after DPP's panel, Chair Hobbs asked for some updates to BC Hydro's evidence that GSXCCC surmises indicates that he is working toward justifying a decision to approve the EPA. Specifically, he asked BC Hydro to update its various IR responses to take into account BC Hydro's version of the new Vancouver Island load balance, i.e. 284 MW in 2007/08. This is in advance of the GSXCCC expert testimony by Steve Miller on the appropriate load balance. In addition, as noted, Hobbs had declined to receive information about GHG potential cost, again in advance of GSXCCC's testimony by Dr. Jaccard on the subject. Not a good sign.
In the afternoon, BC Transmission Corporation brought its witness panel, consisting of Yakout Mansour, formerly of BC Hydro, now head of BCTC and another BCTC expert. The testimony was generally that the OCtober 2008 in-service date for the 230 kV cable system is confidently expected, and it could be earlier. This is considerably more optimistic than was testified to in the 2003 VIGP review. Similarly, Mansour is much more confident sounding about the longevity of the old HVDC system, coming much closer than before to saying that they could be relied on after 2007 (but he didn't go that far).
Duke Point Power spent a lot of time working to undermine the sense of certainty of the 230 kV cables. In my opinion they made little progress in this, and it became farily apparent that the 230 kV cables are progressing well. A possible exception is the development of opposition in Tsawassen, where people do not seem to be interested in an increased presence of high voltage lines crossing their community.
The most astonishing thing about the day was the circulation of the transcript of the "in camera" session of 19 January, i.e. Wednesday. This took place after the public testimony of BC Hydro panel 2.
The purpose of in camera proceedings, as I understand it, is to keep confidential certain commercially sensitive information of the EPA. The rationale (with which GSXCCC does not agree) is that the private interests must keep their critical pricing information secret in order to protect their competitiveness; however, the BCUC needs to review this in order to determine whether the public interest is served in approving the relevant contracts. That being the case, there is a need to receive some documents and information in confidence and, in some casese, there is a need to meet in camera to discuss that information.
But, there is still a commitment to let the public in on as much information as possible, so the approach taken in this case was for the meeting to happen in secret, but for a transcript to be published with the portions deleted that make reference to the commercially sensitive information.
What happened next was a comedy of errors. First, prior to going into to the "in camera" meeting, Chair Hobbs began discussing an issue with BC Hydro panel 2 in terms that did not allow other people in the room to know what they were talking about. However, Mary Hemingsen of BC Hydro dropped the phrase "you get 28 MW of capacity for a low price."
Then came the "in camera" session. Not really in camera, because the proceedings were published two days later; but a reading of that transcript quickly reveals two things: (a) at least some of the participants in the meeting are committing the theatrical error of forgetting that their remarks are on the record, and they speak as if the meeting is generally secret; (b) the purpose of the meeting is not at all to convey commercially sensitive information; rather it was used by Chair Hobbs as an opportunity to enter into a discussion -- almost a negotiation -- with BC Hydro counsel and BC Hydro panel 2 on how to arranged that a different project than the actual winner of the Call For Tenders should end up being approved.
To back up for a second, the terms of the Call For Tenders require that the portfolio that was assessed by the Quantitiaive Evaluaton Methodology to be the least cost must be called the winner, and must get the Electricity Purchase Agreement. The term "project" in this context means one of five "portfolios":
(i) Duke Point Power without duct firing; (ii) Duke point power with duct firing; (iii) some VIGP-like competitor without duct firing; (iv) same VIGP-like competitor with duct firing; (v) Duke point power assessed along with a small peaker project (if I recall correctly). The winner of the CFT is #(i), Duke point power without duct firing.
Now do some mental arithmetic. Duke Point Power Project without duct firing has won the CFT; however Duke Pont Power will build with duct firing capability. Mary Hemmingsen mentioed "you get 28 MW of capacity for a low price". The MW difference between Duke point with and without is 28 MW. There is no other capacity addition under discussion in this proceeding of 28 MW.
Now let's return to the subject matter under discussion in the "in camera" session, and recall that this was Wedneday, before all the BC Hydro evidence had been heard and before any intervenor panel had been heard. Recall also that JIESC planned to bring in an expert on gas and electricity prices, GSXCCC plans to bring evidence on the VI load gap and the liability of GHG emissions; etc.
Throw in a quote from Chair Hobbs at the beginninig of the "in camera" session: "So you know now what I want to try to do. I need your help in telling me how I can get there." (transcript 1742)
Tr. 1751 Hemingsen: "I agree that we all have a concern that it didn't produce the cost effective -- the most cost effective outcome in terms of what was bid in. That was a bit of a trade-off in the simplification of the mode."
Tr. 1753: The Chairman: "What occurs to me, Mr. Sanderson, that -- it may not be breaching confidence for the disclosure of the fact that there is a bid that is optimal for customers than [sic] the winning bid ..."
The "FACT" that there is a bid that is optimal -- i.e. the decision has been made in advance of all the relevant evidence.
At the least, this calls for some explanation.
It is not clear at the moment what GSXCCC or other intervenors will do in response. Expect more news later.
Tom Hackney
Vancouver
Duke Point Power VICFT-EPA Hearing Day 4, Jan 20, Thursday
Panel 4 addressed the BC Hydro load forecast and the cost effectiveness modelling.
Ken Tiedemann is BC Hydro's load forecaster. Mary Hemingsen led the panel, having had over-all responsiblity for the CFT and related matters.
JIESC cross examination started off trying to address why the relative cost of a power plant like Duke Point Power, whose cost has embedded in it a fixed cost of $35 million per year just to be available to provide capacity (before it even starts to run -- this comes to a net present value of $300 million or so for 25 years of this cost) should be so similar in BC Hydro's calculations to purchasing energy on the BC mainland for the same period with no capacity cost or using a combination of Green Island, a small 47 MW peaker and some Norske load shedding. There is a lot of mystery in BC Hydro's numbers, and, we suspect, a big fudge factor in the BC Hydro assumptions of what the price would be to buy energy from other sources instead of from DPP. Intuitively, it's very hard to see how a power plant whose rate structure is oriented toward addressing a capacity problem that only lasts a year or two (i.e. the sub-sea cable supply problem) could be cost competitive when 23 of its 25 year contract term requires energy rather than capacity. I do not believe the JIESC cross examination got to the bottom of this, as the BC Hydro witnesses had a great deal of complicated material to explain, thus allowing them wiggle room to not reveal the point. However, we can expect some smart, well-financed intervenors to come forward with some alternative cost calculations in the argument phase.
Green Island attempted to continue pursuing the question of the disqualification of the Elk Falls peaker bid, but with limited success because that issue was not seen by the Panel to be relevant to Panel 4.
All things considered, I did not think a lot was accomplished in terms of eliciting information useful to the intervenors -- but I may need to qualify this later, depending what use people make of the highly technical nature of some of the information. At the core is a highly complex issue of how and why BC Hydro did the cost analysis and what significance it will have in the review. BC Hydro started off saying that satisfying the terms of the CFT should be the only thing at issue. The Commission disagreed, saying that the BC Hydro cost analysis and the most cost effective alternative thereof was key. However, BC Hydro's cost effectiveness analysis was not designed or intended to be a real portfolio comparison and the alternatives to "Tier 1" (i.e. Duke Point Power) are relatively arbitrary selections from the bidders (Tier 2 has Green Island and a peaker plant, but not the disqualified peaker plant -- why?). The No Award alternative makes some sense: i.e. what happens if there is no award, but Tier 2 is very arbitrary. And there is some analysis of the use of portable peaker generators that are mounted on trucks -- not bid into the process or analyzed at all. Meanwhile, the methodology BC Hydro has used is, in Hydro's terms, intended to make a rough check in case there is some big, overarching issue to be addressed that was not captured in the CFT -- i.e. not meant to be a fine analysis of relative merits of different portfolios.
So part of the discussion is around picking holes in the BC Hydro methods and analysis, but part of it is going to be in asking the Commission to give more weight to this analysis than to the CFT result (which, after all, has produced a clearcut answer: Duke Point Power)
All the signs point to the hearing going more swiftly than expected. Panel 4 is set to be finished early, and people generally do not expect the intervenor panels to take nearly as long as they have been scheduled for, especially as we do not expect to be allowed "sweetheart" cross-examination, so there will only be BC Hydro and Duke Point and the Commission itself to cross a lot of the panels, and they may well, for strategic reasons, not want to ask much. GSXCCC was given an entire day for its two witnesses. (We see this as a strategem by Panel Chair Hobbs to crowd us in our cross-examination of the BC Hydro panels).
Tom Hackney
Vancouver
Transcript: Jan 20, Thursday
TOP
Duke Point Power VICFT-EPA Hearing Day 3 Jan 19, Wednesday, Redacted In Camera
Transcript: Jan 19, Wednesday - In Camera
Duke Point Power VICFT-EPA Hearing Day 3, Jan 19, Wednesday
Conclusion of the cross examination of panel 2. Cross examination of Panel 3 regarding mostly the integrity of the CFT process, as seen by the Price Waterhouse Cooper perspective.
From panel 2 was elicited the facts that: (a) to be dual fuel, the gas turbine has to be the right type -- not practical to modify the wrong type after the fact. It does not look as if DPP is for dual fuel or can easily be made so. It looks is if BC Hydro people made some ill considered IR responses suggesting that this might be employed in the event of trouble getting enough gas from Terasen. Similarly (b), it was testified that LNG could be supplied to DPP via a pipeline from a ship, not requiring a terminal. Not sure how often deliveries would have to happen or how much gas would end up in storage; nevertheless, BC Hydro claims it is a practical alternative to getting a deal with Terasen. More realistically, BC Hydro can go to the BCUC and virtually force a gas supply deal of some kind with Terasen.
Panel Member Boychuk asked about GHG liability and BC Hydro's pathetic ($0 Net Present Value) undertaking to offset half the GHG emissions to 2010.
Panel Chair Hobbs indulged in a freewheeling discusson with the panel about DPP's contribution to system-wide energy and capacity needs, which some took as an indication that he is thinking ahead to approval.
Gold River and Green Island and the Commercial Energy consumers spent a lot of time trying to show that the process was unfair. Evidence has shown that BC Hydro has indeed taken the fuel price risk on for gas projects, and that this is a benefit making it easier for gas projects to bid; however they staunchly maintain that this is not unfair. It's an okay "bias". Price Waterhouse Coopers agrees -- the point of the bidding process is not to level the playing field for all, but rather for the rules to be clear to all and followed through consistently.
Contrary to the direct testimony of Mary Hemingsen and Bev Van Ruyven, some evidence was brought out by counsel for GSXCCC et al, Bill Andrews, to the effect that BC Hydro had discretion to allow or reject the non-complying bid of the Calpine peaker plant at Elk Falls. This will doubless be confirmed or refuted or qualified in the next couple of days, with the arrival of further information as to how much BC Hydro really had in rejecting the Calpine bid. For now, it makes some of the BC Hydro testimony look bad. The significant implication is that BC Hydro may not have been compelled to reject the Calpine bid. If that bid had been accepted, the Ladysmith peaker and the Green Island project could have been aggregated with Calpine to form an acceptable portfolio, which might have competed with DPP. As it turned out, BC Hydro "was forced" to reject the Calpine bid for havng submitted a "conditional bid"; thus Green Island and Ladysmith peaker didn't get into a competing portfolio and were effectively eliminated from the race.
There was a credible buzz in the halls during one of the breaks today that there is recent political interest in being flexible on DPP, more than there was a month ago. Does this mean cabinet might step in and order BC Hydro to stop DPP, or for some subtle behind-the-scenes pressure on either BC Hydro or the BCUC? I don't really know how the policial sector would intervene, given the Liberal's frequent promise to put BC Hydro under the oversight of the BC Utilities Commission, but government is the boss, and it would find a way if it really wanted to. SO, keep up the letters to politicians.
Tom Hackney
Vancouver
Duke Point Power VICFT-EPA Hearing Day 2, Jan 18, Tuesday
This day was reserved for Panel 2, led by Mary Hemmingsen, with Rohan Soulsby, Steve Eckert, Graeme Simpson, Chris O'Riley.
The panel seemed very defensive, especially on a couple of issues: once again the question of whether DPPP is justifiable as a long-term contracted facility; and whether the VIGP bidders got a sweet deal with the $50m VIGP assets; also on whether the gas-fuelled bidders got a sweet deal with BC Hydro agreeing to allow the option to the bidder of whether or not to take the gas supply risk. It seems very obvious that BCH offering to do this constitutes a benefit to gas bidders, biases the process in their favour; however, Panel 2 was very unwilling to acknowledge it, even though they said the small peaker plants would not have been able to bid in without that clause.
Green Island and Gold River went after this point hard, and, I thought, really established how heavily this favoured gas-fired power, with the attendant risk going to BCH ratepayers (risk of long-term gas price increase, that is, shorter term price risk is, in principle, mitigated by the size of the BCH portfolio). They also spent a lot of time establishing that the Calpine peaker at Elk Falls was unfairly and inappropriately (in their view) eliminated from the process, and that their elimination caused the Green Island project not to be considered in a portfolio to meet the supply gap, thus effectively eliminating Green Island's bid.
Bill Andrews scored solidly on whether the $50 m VIGP assets deal was mischaracterized as market rate, when it should have been called sunk cost.
GSXCCC, et al. emphasized the $88m Net Present Value of GHG gas liability that is built into the VIGP benchmark -- but BC Hydro doesn't want to admit that lack of this factor in the DPP price might explain its relatively cheap stated cost.
GSXCCC also uncovered a significant fact on the Environmental Certificate:
DPP has no plans to transfer the Certificate from VIGP to DPPP because Duke Point Power expects, through the EPA terms, to purchase Vancouver Island Energy Corporation from BC Hydro. Thus, as I understand it, "Duke Point Power Project" is "Vancouver Island Generation Project" already, though not known by that name.
What this means is that there will be no transfer of the Certificate. However, we should be writing to the Minister and the EAO to inform them that we expect there to be significant change to the Certificate, and that we want input into it.
DPPP is not designed to be dual fuel, and some changes would be required to make it so. However, it looks as if it is to be dispatched differently, which should affect the air emissions. More starts and stops, which could lead to more bursts of start-up pollution. I don't know how significant this is. Overall, it looks as if our position on the Environmental Certificate is weaker.
Tom Hackney
rainy Vancouver
Duke Point Power VICFT-EPA Hearing Day 1, Jan 17, Monday
Report from the BCUC hearing room.
Today was the first day of the BCUC hearing into BC Hydro's electricity purchase agreement with Duke Point Power.
BC Hydro started off saying that they only expected the review to address the CFT terms, and that the BCUC has expanded that to consider comparative costs of DPP with "Tier 2" and No Award.
BC Hydro witnesses emphasized over and over again that there is a threat of a shortfall on the Island. Cross-examined on the long-term economics, they showed some slippage between the necessary capacity argument for DPP and the proposition that DPP is supposedly going to be a useful and economic addition.
Under cross by Green Island, they admitted that they might go before the Commission in the future to ask for a rate increase to cover GHG offsets (in line with CEO Bob Elton's remarks). However contradictorily they also say that DPP is responsible for GHG liability.
Hearings going each day this week and Saturday. Resuming for five days next week.
Hobbs still says he will issue a decision on the 17th.
Next ... Panel 2 continued.
Tom Hackney
January 27, 2005
BCUC commision denies motion to disqualify
It's 3:00 pm, Thursday.
Chairman Hobbs of the BC Utilities Commission has denied the GSX Concerned Citizens Coalition application for an order that the Commission disqualify itself on the grounds of a reasonable apprehension of bias and denial of procedural fairness and natural justice during the hearing.
The transcript isn't online yet, and no-one from within the hearing room has posted more information yet.
Does this decision cast doubts on the value of the rest of the hearing? You bet it does. When it is clear from the transcript of January 19 that the Chairman has already decided what outcome he wants, and it is evident from the fact that he met privately with BC Hydro to get their assistance in helping arrive at that outcome, one must question what value there is in continuing with the rest of the hearing, or charade.
No reasons have been issued.
More to come.
Arthur
January 26, 2005
City yanks support for Duke Point plant
Nanaimo Daily News
Wed. Jan. 26, 2005 (page 1)
In a close vote Monday, city council decided to pull its support from the controversial plan by Alberta-based Pristine Power to build a 252-megawatt power plant at Duke Point.
After a 5-4 vote in favour of a Norice of Motion brought forth by Coun. Diane Brennan Jan. 10 for council to withdraw its support of the $280 million proposal, council now has no position, for or against, the proposed plant that is currently before review by the B.C. Utilities Commission.
Council's support for the project was given when B.C. Hydro first proposed building a power plant at Duke Point three years ago, but Brennan successfully argued there are new issues, specifically around the growing cost of natural gas, if the plant proceeds, that weren't part of council's original deliberations on the subject.
(see EDITORIAL on page A6)
********************
EDITORIAL
Nanaimo Daily News
Wed. January 26, 2005
Duke Point support eroding
It is interesting to observe how support for the 252-megawatt power plant at Duke Point has eroded away in recent months.
It seems like only yesterday that support for the project far outweighed opposition, but slowly but surely that has turned.
Even our own City Council has pulled its backing for the plant, to be built by Alberta-based Pristine Power. While the Council vote was close, it nonetheless shut down Nanaimo's elected official stand, council now having no position, for or against.
A year or two back, industry too appeared to be in favour, but lately strong opposition has been heard from the major users of the prosed power. Earlier this month, and late last year, a committee representing the major industrial users of electricity on Vancouver Island stood firmly against the facility, saying costs would be too high, especially including the costs of the natural gas to feed to plant. Spokesperson for that group, Don [sic] Potts, said in a Daily News story recently, that nobody knows, with complete certainty, what the overall costs of the plant, over 25 years, would be. Naturally, Pristine and BC Hydro disagree.
Potts also took issue with claims by BC Hydro that the plant is necessary even though new cables to carry electricity to the Island, which will replace cables that will be decommissioned in 2007, are scheduled to be put in place in 2008.
Certainly, public opinion has carried some weight on this matter, too. Intelligent and straightforward letters to the editor have been in abundance calling for the BC Utilities Commission to nix the deal.
The entire matter has become a puzzler. BC Hydro says we have to gear up for power shortfalls and fears brownouts. Yet, the cables now carrying power will be fully replaced in 2008. This confuses people.
We find ourselves with doubts in recent months. While we initially supported the plant, and fully support the premise that Vancouver Island's power supply must be fully protected if the Island is to grow economically, we like so many others wonder if all the real facts are on the table.
BC Hydro has to accept a good deal of the responsibility for shattered faith. While the corporation had their information act together on this important topic at one point, they have been short in selling their message and more importantly, the right message, of late to help guide the public through this controversial process.
While some remain as strong backers of the plant, we see those numbers tumbling in rapid fashion. And, so they should. As Councillor Diane Brennan pointed out at council Monday evening, there are now new issues if the plant proceeds. Until those new issues are more clearly debated, it's understandable that support will continue to fall.
- Viewpoint by Managing Editor Peter Godfrey
Suggestion of bias puts power plant in jeopardy
Patrick Hrushowy
View from the right
Cowichan News-Leader
26 Jan 2005
COMMENT: Another unexpected column from the Cowichan Valley's resident right-winger (and proponent of one of the projects that did NOT make the cut in the call for tenders) Patrick Hrushowy. As we blushingly acknowledged the first time he did it, this recognition from Hrushowy feels pretty good.
The Pristine Power generating project proposed for Duke Point near Nanaimo may be on the verge of cratering thanks to a tenacious protest group that got its start in the Cowichan Valley - the GSX Concerned Citizens Coalition.
The group's lawyer, Bill Andrews, has filed a motion at the BC Utilities Commission (BCUC) alleging an "apprehended bias" and asks teh BCUC panel considering BC Hydro's preferred Duke Point project to disqualify themselves from the hearings.
In simple terms Andrews is alleging he has evidence that shows BCUC Chairman Robert Hobbs and Commissioner Lori Ann Boychuk - both sitting as a hearing panel considering the BC Hydro energy purchase agreement associated with the project - have their minds made up are are disregarding evidence.
Andrew's motion came Friday after the commission released an astonishing edited transcript of an in-camera private meeting last Wednesday between Hobbs, Boychuk and BC Hydro's Mary Hemmingsen, the senior executive responsible for Hydro's Vancouver Island call for tenders. The transcript calls Hobbs and Hemmingsen as agreeing Hydro's elaborate tender process did not produce the most cost-effective proposal, meaning they both believe there is a project that would be better for Hydro's customers than the one Hydro has submitted.
This is something that should have been dealt with publicly as soon as Hobbs and BCUC staff became aware of it. It will be argued Hobbs was derelict in his duty by his failure to disclose it in a timely manner.
The transcript also indicates Hobbs told Hemmingsen what he wants to approve.
"So you know now what I want to try to do. I need your help in telling me how I can get there," the transcript has Hobbs saying.
This means, it will be argued, that his mind was made up less than half way through the hearings and before evidence from project opponents had been presented to the hearings.
It will also be argued that since Hobbs and Hemmingsen agree that Hydro's process did not generate the most cost-effective project, and since Hobbs is prepared to approve something other than what came out of the process, other proponents should have an oportunity to have another go at it.
Whatever the outcome today when the BCUC is scheduled to consider the disqualification motion, the Duke Point project is likely to be tied up for weeks or even months in the courts by appeals on several grounds.
There are huge political implications. The BC Liberals have argued they have put BC Hydro back under the independent regulation of the BCUC. But opposition politicians will now charge Hobbs, who was appointed by the Campbell government, is simply doing Campbell's bidding and that the whole BCUC process is a sham.
Firm action by the government may be required to maintain public confidence in the BCUC.
Got a tip or comment? E-mail me at phrushowy@shaw.ca.
January 25, 2005
Utilities panel accused of bias
Andrew A. Duffy
Times Colonist
January 25, 2005
COMMENT: Andrew Duffy's article reprinted here contains two factual errors, I believe, that I think it important to correct.
He is correct that cable systems deliver most of the power used on Vancouver Island, although it is always variable, the mix between on-island power from hydroelectric generating facilities on the island and Island Cogeneration, the existing gas-fired plant at Elk Falls.
Duffy says that all of that cable capacity will be gone in 2007, when BC Hydro "decommissions" the cable systems.
This statement is completely incorrect.
First, we have two sets of cable systems coming to Vancouver Island:
- the 500 kV, or Cheekye-Dunsmuir system, comes from Squamish, across the Sunshine Coast, over Texada Island, to Qualicum. This is the reliable backbone of mainland power that serves the island. It is not under discussion, not being taken out of service, certainly not for many years after 2007. Capacity on this system is rated at 1300 megawatts (MW)
- the HVDC systems, which are in question, leave the mainland south of Vancouver, and cross Galiano and Salt Spring Islands, coming ashore just north of Duncan. Originally, these were rated at a capacity above 600 MW. Today, because they are aging, they have been "de-rated" to 240 MW. By 2007, BC Hydro will de-rate them to zero.
An important point is that although the HVDC systems have been "de-rated" they are still capable of great capacity. On not infrequent occasions, the HVDC have been utilized at over 500 MW, especially on one prolonged instance in December 2003 when the 500 kV system was out of service.
Likewise, in 2007, the HVDC will be de-rated to zero, but will still be serviceable, and will still be able to deliver energy to the island. This is quite different than a hard decommissioning, in which the system is bang, gone.
By 2008, BC Transmission Corp plans to replace the HVDC with a new cable system with greatly increased capacity.
Our consistent argument has been that the Duke Point Power project, with a 25 year service agreement with BC Hydro, is a profoundly inappropriate "solution" to this very short term bridging requirement, when the HVDC is de-rated (once again, NOT of no further use), and before the new cable system is in place. - Arthur Caldicott
Power project opponents claim outcome of B.C. Hydro contract hearing has already been decided
A B.C. Utilities Commission panel was under fire Monday on charges of bias and the appearance it has already made up its mind on a contract B.C. Hydro has signed with Pristine Power to build a $280-million gas-fired generation plant on Vancouver Island.
The Georgia Strait Crossing Concerned Citizens Coalition (GSXCCC) filed a motion to disqualify the panel as a result of an in-camera discussion the panel had with B.C. Hydro representatives. That meeting shows the panel has prejudged the outcome of the hearing before receiving arguments and cross-examination from intervenors, the coalition says.
"The panel can not know the best option until it has heard the evidence and considered the options before it," said Tom Hackney, president of the umbrella organization of environmental groups and individuals opposed to the project. "The panel has made a decision and that is not proper. That is why we are asking that they disqualify themselves."
B.C. Hydro has said the plant is needed to meet Vancouver Island's increasing electricity needs. It will be especially necessary when undersea cables, carrying power from the mainland, are decommissioned in 2007 because of their age. Those cables provide about 80 per cent of Island needs.
The coalition is worried about pollution from the Duke Point project, and says more cost-effective ways of making up the electricity shortfall are available, such as conservation programs, replacing the undersea power cables, and renewable sources of energy.
"This is an application for an order that the commission panel disqualify itself on the grounds of a reasonable apprehension of bias and denial of procedural fairness and natural justice during the hearing," wrote coalition lawyer William Andrews in his application.
A transcript of the in-camera session shows panel chairman Robert Hobbs telling B.C. Hydro representatives he understood that while Hydro chose Pristine's project, they would have preferred to choose a slightly different Pristine option but the cost constraints of the call for tender process prohibited them.
And during a back-and-forth discussion, Hobbs suggests that value could be added for Hydro ratepayers by "moving us into the outcome that's in the customer's best interest. So you know what I want to try to do. I need your help in telling me how I can get there."
The coalition is arguing in its motion that, to the exclusion of other parties, the panel and Hydro have discussed how to approve a different option -- a variation of Pristine's Duke Point project -- even though it was not the winner of the call for tender process.
"It seems clear cut," said Peter Ronald, a coalition spokesman. "It appears the fix is in."
David Lewis, mayor of Gold River, said the actions of the panel and the fact it appears the commission has already made up its mind to approve the electricity purchase agreement between Hydro and Pristine, have him shaking his head.
"What you can't do as a chairperson is go in with a closed mind ... otherwise what the hell is the point of going (to a hearing)," he said.
The utilities commission hearings have adjourned until Wednesday morning in Vancouver to allow intervenors time to prepare arguments on the application for the disqualification of the commission panel. It is expected a ruling on that application will be issued the following day.
Hobbs could recuse himself leaving the commission panel with Lori Ann Boychuk as its lone remaining member; commission panelist Murray Birch recused himself Dec. 22 after the coalition suggested there was a possibility of bias because he was the acting president of Alliance Pipeline, a major natural gas transporter. Hobbs may also choose to dissolve the panel or rule there was no impropriety and continue.
If the hearings proceed they are likely to wrap up by the end of this week and a ruling on the electricity purchase agreement issued Feb. 17.
The counsel for the utilities commission panel did not return phone calls Monday, and B.C. Hydro was keeping its comments to itself.
"Just because they issue a press release doesn't mean we have to step up to the plate and debate it," said Hydro spokeswoman Elisha Moreno.
--
January 24, 2005
GSXCCC files motion to disqualify BCUC panel
GSX Concerned Citizens Coalition
304 - 733 Johnson Street, Victoria, BC, V8W 3C7
Telephone (250) 381-4463
Email: thackney@island.net Website: www.sqwalk.com
For Immediate Release: January 24, 2005
GSXCCC files motion to disqualify BCUC panel
Vancouver, BC-The GSX Concerned Citizens Coalition (GSXCCC) today filed a motion to disqualify the BC Utilities Commission panel presiding over the Duke Point Power hearing based on an apprehension of bias and the denial of procedural fairness.
The challenge to the panel's fairness is a result of "in camera" discussions between the Commission panel and BC Hydro representatives that show the panel has prejudged the outcome of its hearing before receiving arguments and cross-examination from intervenors.
"The panel can not know the best option until it has heard the evidence and considered the options before it," Tom Hackney, GSXCCC president. "This panel clearly has already made a decision and that is not proper. That is why we are asking that they disqualify themselves."
The panel is tasked with reviewing the electricity price agreement BC Hydro contracted with Calgary's Pristine Power for the proposed Duke Point Power (DPP) natural gas-fired electricity generation project. DPP was selected as the most cost-effective proposal during a protracted BC Hydro Call for Tenders (CFT) process.
To the exclusion of other parties involved in the hearing, the Commission panel and BC Hydro discussed how the Commission could approve a different option, a variation of the DPP project, even though it did not win the CFT contest, and is not the subject of the current proceeding.
"A person informed of these developments would reasonably conclude that this panel can not decide this proceeding fairly," said Hackney. "On the basis of this test for bias, we are asking the panel to disqualify itself immediately. "
Oral submissions on the GSXCCC motion will be heard on Wednesday.
- 30 -
For more information contact:
Peter Ronald: (250) 381-8321
Arthur Caldicott: (250) 370-9930 x.22
GSXCCC motion to disqualify
All transcripts, including Jan 24 revised in-camera and the Jan 24 hearing, are available at www.sqwalk.com/home.shtml
BCUC Panel decides before hearing all evidence
GSX Concerned Citizens Coalition
304 - 733 Johnson Street, Victoria, BC, V8W 3C7
Telephone (250) 381-4463
Email: thackney@island.net Website: www.sqwalk.com
For Immediate Release: January 24, 2005
BCUC Panel decides before hearing all evidence
Vancouver - The BC Utilities Commission panel reviewing BC Hydro's electricity purchase agreement with Duke Point Power LP has indicated on the record that it has already decided the outcome it wants, in advance of having heard all the evidence due to be given.
Public transcripts released on Friday give a partially censored account of an "in camera" meeting held two days previous between the two-member Commission panel and one of BC Hydro's witness panels. Commission Chair Robert Hobbs tells the BC Hydro witnesses that a project different than the winner of BC Hydro's Call For Tenders (CFT) should receive the Panel's approval.
Hobbs then says, "You know now what I want to try to do. I need your help in telling me how I can get there." (Transcript, p.1742) Mr. Hobbs then asks BC Hydro's for suggestions on how the Commission can approve the desired project even though it was not the winner of the CFT process. GSX Concerned Citizens Coalition and all other intervenors in the hearing were not allowed to attend the Commission's "in camera" session with BC Hydro.
"This is outrageous and clearly presents a reasonable apprehension of bias," said GSXCCC president Tom Hackney, "We and other intervenors have expert witnesses lined up to testify. We have a strong case against the Duke Point proposal. How can anyone now believe we will be heard?"
The transcript shows the Commission Panel chair openly asking BC Hydro to help subvert the outcome of the CFT and hand pick who should win the contract.
"There must be integrity in both the tendering and regulatory review processes," Hackney insisted. "How can power project bidders or the public have any faith in the fairness of this hearing?"
- 30 -
The revised "in camera" transcript released on Monday, January 24, is online at:
www.sqwalk.com/20050119ric(revised20050124).pdf
The transcript from Monday, January 24, is online at:
www.sqwalk.com/20050124.pdf
For further information, contact:
Steve Miller, GSXCCC Director, (250) 743-7055
Peter Ronald, GSXCCC Director, (250) 616-7895
January 24, 2005 - BCUC Panel decides before hearing all evidence
Backgrounder
Since 2000, BC Hydro has been trying to build natural gas-fired generation on Vancouver Island, first with the Port Alberni Cogeneration, then Port Alberni Generation projects. In 2003, BC Hydro proposed the Vancouver Island Generation Project (VIGP) for Duke Point, near Nanaimo. In September 2003, the BC Utilities Commission refused permission for that project but encouraged BC Hydro to hold a "call for tenders".
In the fall of 2003, BC Hydro initiated the Vancouver Island Call For Tenders (CFT) for power generation projects on Vancouver Island. Some 11 bidders with 23 projects prequalified for the main round of bidding. BC Hydro hired PricewaterhouseCoopers as the independent reviewer for the CFT, monitoring and reporting on fairness and BC Hydro's adherence to the CFT.
After initial screening, the CFT process assembled the projects into "portfolios" that could meet the Island's projected energy demand. Of the five portfolios assembled, the eventual winner was the Duke Point Power LP project (DPP), without duct firing. A competing proposal, the DPP project with duct firing was unsuccessful in winning the CFT contest.
Transcripts of an "in camera" meeting on January 19, 2005, indicate Panel Chair Hobbs and a BC Hydro witness panel agree that DPP with duct firing is actually more cost effective. Their discussions appear to effectively circumvent the CFT decision process as evidenced in the transcript when Hydro witness Mary Hemmingsen openly acknowledges that the Duke Point Power project, without duct firing, is not the most cost-effective project, despite having the lowest price tag.
On November 3, 2004, BC Hydro announced that DPP, a project of Calgary-based Pristine Power, was the CFT winner. The current hearing is reviewing the electricity price agreement BC Hydro entered into in awarding the CFT to DPP. The BCUC hearing began on January 17 and is expected to continue for another week.
On December 20, 2004, a key part of BC Hydro's natural gas strategy for Vancouver Island, the GSX Pipeline project was cancelled. On December 22, Commission panelist Murray Birch recused himself from the review panel in response to GSXCCC's submission that a reasonable apprehension of bias existed as Mr. Birch is the acting president of Alliance Pipeline, a major natural gas transporter.
BC Hydro's rationale for urgently building on-Island generation is a worst-case, theoretical power shortfall, caused by a planning assumption that “zero-rates” in 2007, a set of existing, aging, sub-sea transmission cables that bring hydroelectric power from the mainland.
BC Transmission Corporation now plans to replace the cables, and projects an in-service date for the replacement sub-sea transmission system by October 2008.
The agreement between BC Hydro and DPP, which will cost BC electricity users hundreds of millions of dollars over its 25 year term, is a grossly misplaced “solution” to a short –term bridging problem between 2007 and 2008.
For more information on DPP, VIGP, GSX or related topics, visit www.sqwalk.com
or contact:
Steve Miller, GSXCCC Director, (250) 743-7055
Peter Ronald, GSXCCC Director, (250) 381-8321
January 18, 2005
Hydro's gas-fired fiasco
Brian Lewis
The Province
January 9, 2005
COMMENT: The Province's business editor Brian Lewis has been writing, once or twice a year, about GSX and BC Hydro's Vancouver Island mega-projects, since 2000. This article gets it marvellously right (I agree with him) on a number of points, and dreadfully wrong, on at least one big one.
Lewis is the first major media commentator outside of intervenors like the GSX Concerned Citizens Coalition, to suggest that government should get involved in what BC Hydro is up to, giving direction. With an entire electricity policy department watching what's going on, and putting its oar in the water late at night when no-one can see the effect, the Ministry of Energy and Mines has been involved. No matter what they say. But Minister Richard Neufeld has been all to ready to say that the government's hands are off, that oversight of BC Hydro is up to the BC Utilities Commission. But that's Neufeld's Believe It Or Not.
The BC Utilities Commission let BC Hydro run wild with the Call for Tenders, even after they'd been roundly browbeaten in December 2003 with the concerns that various intervenors had with the CFT. The BCUC wimped out. Lewis says that was the time for the government to step in. It's a bold statement for a journalist to make.
But when Brian Lewis suggests that a solution to island energy supply challenges is coal, he's dead wrong. The BC government wants to encourage coal fired generation, and it's a disappointment to find Lewis taking a pro-coal position. First of all, coal simply cannot be burned as "cleanly" as natural gas, in contradiction to Lewis' statement. And second, the cost of the scrubbing technologies that clean up coal emissions, are prohibitively expensive. If all of them were to be mandated, the economics of coal-fired generation, relative to natural gas, would collapse. Coal is a cheap fuel, but "clean coal" generation is damn expensive. The Nanaimo coal is likely to stay in the ground for a long long time.
Lewis' last call is for leadership from government. Given that two governments and many years have not resulted in anything other than furtive promotion by government of these misguided natural gas schemes for Vancouver Island, we can reasonably expect government to avoid wading directly into the Duke Point Power cesspit. - Arthur Caldicott
DUKE POINT: Electrical plant may burn Liberal gov't
There may be another "Fast Ferries" style project on the drawing board, one that has the potential for putting the governing Liberals in the hot seat as they ramp up for May's provincial election.
Unlike the previous NDP regime's $400-million aluminum ferry fiasco, this one doesn't involve building ships to move people to and from Vancouver Island, but it does centre on providing electricity to B.C. Hydro ratepayers on the Island.
Hydro and private sector partner Pristine Power of Calgary will be making their case before the B.C. Utilities Commission next week to build a 252-megawatt natural gas-fed power plant at Duke Point near Nanaimo at a cost of $282 million. The Calgary company will sell the power to Hydro under a 25-year contract and was selected by Hydro to build the facility following a call for tenders from the Crown-owned utility last year.
On the surface, it all looks copacetic but, as they say, the devil is in the details.
This is Hydro's second shot at trying to push its Duke Point project through the regulatory approval process.
The first application was turned down by the BCUC in September 2003 following a lengthy public hearing during which it became painfully obvious that the project was an uneconomic pig-in-a-poke.
That was the project Hydro had tied to the Georgia Strait Pipeline proposal which would have carried natural gas from the Mainland to feed the Duke Point Plant.
Not surprisingly, the GSX was also tossed aside as another of Hydro's poorly planned projects. In its September 2003 decision, the Utilities Commission ordered Hydro to issue a call for tenders.
But the way the call was structured meant that, basically, only proposals calling for a gas-fired plant at Duke Point would be considered.
Alternatives such as using on-Island available fuels like coal or wastewood to generate power, or utilizing energy savings from industry were never considered.
That's the point where the current Duke Point proposal left the tracks.
It's also the point where the Gordon Campbell government should have shown leadership and stepped in. It didn't.
Not surprisingly, critics such as Hydro's industrial and commercial customers will be hammering their tables at next week's BCUC hearing that if approved, the Duke Point plant locks Hydro and all its ratepayers into a plant fed by natural gas from the northeast corner of the province, gas that has increased roughly three-fold since Duke Point was first proposed.
That has led the Joint Industry Electrical Steering Committee, which represents Hydro's industrial customers, to warn that this project could trigger electricity rate increases of three per cent -- or more -- for everyone in B.C.
But hold on, it gets better, or worse, depending on your point-of-view.
The Duke Point plant will only be used during peak periods of Island electricity demand when or if it begins operation a few years from now.
At the same time Hydro is planning to build a new transmission line over to Vancouver Island which is expected to be in service by 2008 -- about one year after Duke Point's scheduled opening.
"In our view there's got to be a way of bridging that gap without spending $280 million on Duke Point," says Dan Potts, executive director of the industrial group. Penny Cochrane of the Commercial Energy Producers of B.C. puts it this way: "It seems Hydro wants to build a truck when a bicycle might do the job."
The critics also make an excellent point when they say shipping natural gas all the way from northeastern B.C. to Vancouver Island to generate electricity doesn't make sense -- especially when you consider that the Nanaimo region still has ample supplies of coal.
And these days coal-burning technologies make the fuel as clean as natural gas.
However, the Duke Point issue arose as a direct result of poor planning and neglect by Hydro for more than the past decade which has resulted in B.C. importing ever-increasing amounts of higher-cost electricity.
It's time for this foolishness to stop. It's time for leadership --but so far no one in Victoria seems to care.
-------------------------------
Brian Lewis is the Province's business editor. He can be reached at blewis@png.canwest.com.
© The Vancouver Province 2005
Green Party letter to Utilities Commission on Duke Point
Tuesday January 18, 2005
BC Utilities Commission
Rob Pellatt, Commission Secretary
Sent by email: commission.secretary@bcuc.com
Dear Mr. Pellatt,
As leader of the Green Party of British Columbia, I want to reiterate my party’s strong opposition to the proposed Duke Point Power gas-fired power plant.
Approval of this fossil fuel-burning mega-plant is unconscionable when there are economically feasible, renewable energy-based alternatives that can produce the needed electricity without increasing our output of greenhouse gasses.
Wind, solar, tidal and small-scale in-stream hydro projects are half the answer to meeting Vancouver Island’s energy needs. The other half of the solution is conservation of energy which is now wastefully being squandered and the use of “green” heating technologies like solar hot water and geo-exchange systems. These conservation and renewable energy-based alternatives are more economically viable, environmentally responsible and sustainable over the long term.
Canada has signed on to the international Kyoto Accord, committing Canadians to reduce the level of C02 emissions to 10 percent below our 1990 levels. We are already 30 percent above this level.
We will never reach the Kyoto goal, nor slow global warming, if the BC Utilities Commission caves into the pressure from BC Hydro to approve this project.
You have a moral obligation, if not a legal one, to take steps to meet Canada commitment to reduce the use of fossil fuels and help curb global warming.
I implore you to do the right thing and reject this project again. Future generations are counting on you.
Sincerely,
Adriane Carr
Leader of the Green Party of BC
cc: Premier Gordon Campbell, gordon.campbell.mla@leg.bc.ca
Richard Neufeld, Minister of Energy and Mines, richard.neufeld.mla@leg.bc.ca
Mike Hunter, MLA for Nanaimo, mike.hunter.mla@leg.bc.ca
Green Party release
Hydro defends Duke Point power plan
Scott Simpson
CanWest News Service
Tuesday, January 18, 2005
Residents of Vancouver Island will face an "unacceptable risk" of blackouts unless B.C. Hydro gets permission to proceed with plans for the Duke Point power project, a British Columbia Utilities Commission panel heard Monday in Vancouver.
The plant would serve about 10 per cent of Vancouver Island's electricity needs and carries fixed costs of $1.1 billion -- plus natural-gas requirements that could bring the total cost of the project to $4.5 billion over 25 years.
Hydro wants to develop the plant in partnership with a Calgary-based private company, Pristine Power.
At the opening of a BCUC hearing into Hydro's plans for a gas-fired generating plant to be located at Duke Point near Nanaimo, Hydro executive Bev Van Ruyven said the plant guarantees the Island a secure energy supply at a reasonable cost.
"Our foremost concern in this proceeding remains reliability of supply," Van Ruyven told a BCUC panel during a Hydro presentation.
She noted that Island residents set a record for electricity consumption last Friday -- many residents use electricity to heat their homes due to limited access to natural gas.
In addition, some high-voltage cables that carry electricity from the Mainland to Island residents will reach the end of their useful life in 2007 -- although replacements will not be available until 2008.
"We at B.C. Hydro are obligated to serve our customers. On Friday, we hit a new peak for Vancouver Island. At just under 2300 megawatts, this peak is higher than we were forecasting for 2008.
"A solution has been sought for Vancouver Island for over 10 years. We have studied and analysed the problem, and now is the time to act," Van Ruyven said.
Opponents have been questioning Hydro's assertions, saying that cheaper alternatives such as lowered industrial electricity consumption during times of peak residential demand would have the same impact for much less money.
The Joint Industry Electricity Steering Committee and other groups oppose the project, saying it's too costly to justify against the slight possibility of a blackout on a single cold day prior to the installation of new cables.
January 17, 2005
Hydro customers could pay $4.5b for new plant
Scott Simpson
Vancouver Sun
17 Jan 2005
BC Hydro customers will pay an estimated $4.5 billion over 25 years for a new gas-fired electricity plant that is being proposed to the B.C. Utilities Commission as the answer to Vancouver Island's looming energy crunch.
Hydro will go before the commission today with a proposal to partner with a Calgary company, Pristine Power, to develop a 252-megawatt plant at Nanaimo's Duke Point.
Total costs associated with the project have yet to be disclosed, although both Hydro and Pristine have begun to openly discuss fixed expenditures in recent days.
The Joint Industry Electricity Steering Committee, which opposes the project, has been furiously crunching numbers in preparation for Monday's hearing, and came up with the $4.5-billion figure this week after adding up fixed costs and making long-term projections on the price of natural gas.
The number is stated in a letter sent to the utilities commission by the committee.
Hydro has already spent $170 million over the past four years, but will recover only $50 million, leaving its customers -- the taxpayers of B.C. -- on the hook for the remaining $120 million.
But those costs pale in comparison to the amounts Hydro is prepared to pay out over the next quarter century -- although Hydro says the per-unit cost of energy from Duke Point is comparable to what it will pay for other private-sector operators, roughly $65 per megawatt for secure, high-grade electricity.
Pristine will invest about $285 million to build the plant, and will receive fixed monthly payments of $2.9 million for 25 years, according to Pristine president Jeff Meyers.
That adds up to a return on investment of $870 million over the life of the deal.
Meyers said Terasen Pipelines is guaranteed $9.6 million per year for gas delivery services in support of the plant -- $240 million over the life of the deal.
Meanwhile, the Joint Industry Electricity Steering Committee said the biggest single cost of Duke Point will be the gas that is necessary to run it.
It pegged the total, 25-year cost of the project at $4.5 billion, including gas purchases at present market prices, if the plant runs 80 per cent of the time as Hydro expects.
All of those costs will be borne by Hydro customers.
Hydro power planning manager Mary Hemmingsen says the facility is necessary to meet peak electricity demand on Vancouver Island, which hit a record for hourly electricity consumption on Friday morning.
Hemmingsen said Hydro expects that demand will continue to escalate amid solid economic and population growth.
She said the situation is so urgent on Vancouver Island that without Duke Point, Hydro may have to consider measures that could include a fleet of barges housing diesel-fuelled 23-megawatt generators.
Hydro would rely on a scheme involving power consumption curtailment by Norske Canada, and the barges, until BC Transmission Corporation can set down new high-voltage cables to the Island in 2008.
Hemmingsen said the existing cables will reach the end of their useful life in 2007 and Hydro would prefer to have Duke Point operational by that point to avoid a potential power crisis.
The Duke Point project has attracted opposition from virtually every stakeholder group in the province, who believe it is too costly a solution to the Island's growing energy needs.
The industry steering committee calculates that the net cost of electricity from Duke Point would be $200 per megawatt hour because the plant would only operate about 20 per cent of the time.
Those calculations were rejected this week by senior executives of Pristine, in a meeting with The Vancouver Sun.
"We think their numbers are just wrong," said Pristine president Jeff Meyers, adding that the true cost was $65 per megawatt -- given Hydro's expectation the plant will be in operation 80 per cent of the time.
Hydro says Duke will produce electricity for about the same price as other, smaller-scale, private sector projects that have recently been awarded power-supply contracts from the crown corporation.
The BCUC hearing will determine whether or not the project is a cost-effective solution to the Island's needs, but will not consider whether other cheaper options are available.
In 2003, the commission rejected Hydro's attempt to self-operate a Duke Point plant -- even though Hydro had already spent $170 million including $120 million for turbine equipment and $50 million in development costs for a gas pipeline project that was abandoned last month.
Hydro is coming back before the BCUC with a deal that would revive the 252-megawatt project with Pristine as developer.
"The important thing to understand in this bid is that the Island needs electrical capacity. It doesn't necessarily need electrical generation that runs on every hour," Meyers said.
Meyers said Duke Point was a better option for the Island.
"You have a wire serving the Island that is to be retired in 2007. That's a firm date. BC Hydro has an obligation to serve and they need to have reliable capacity."
He noted that Pristine supports alternative forms of electricity generation, such as run of river hydro, but says those technologies cannot deliver the same measure of security or steady output as a gas-fired generation plant.
"When everything starts to come on in the morning, Hydro needs resources they can absolutely switch on. You can't get that from wind, you can't get that from small hydro or a number of the alternatives."
© The Vancouver Sun 2005
January 15, 2005
Huge crowd decries Duke Point gas plant proposal
GSX Concerned Citizens Coalition
304 - 733 Johnson Street, Victoria, BC, V8W 3C7
Telephone (250) 381-4463
Email: thackney@island.net Website: www.sqwalk.com
For Immediate Release: January 15, 2005
Huge crowd decries Duke Point gas plant proposal
Nanaimo, BC-More than a hundred people turned out to a BC Utilities Commission (BCUC) "town hall" meeting today to express their resolute objection to BC Hydro's plan to build a 252MW gas-fired electrical power plant at the Duke Point industrial park near Nanaimo.
Speaker after speaker decried the gas plant plan on a variety of grounds, including the increasingly high cost of its fuel, damage to local air quality and increased greenhouse gas emissions. Natural gas (methane) and carbon dioxide are two important human produced pollutants that are driving climate change.
"The Duke Point power plant is unnecessary and will leave a legacy of expensive and polluting energy on Vancouver Island," said Norm Abbey of the Society Promoting Environmental Conservation (SPEC). "BC Hydro is mortgaging our economic and environmental future," said Abbey.
Only two presenters spoke in favour of the proposal at the special day-long forum. Giant puppets and drummers joined the huge crowd at a noon-hour rally, sending a clear message to the BCUC, BC Hydro and politicians that residents want a different solution to Vancouver Island's long- and short-term energy challenge. A combination of conservation, industrial demand curtailment and replacement of the existing transmission cables can bridge a theoretical, short-term, worst-case supply gap that BC Hydro has used to justify the $280 million project.
"In the long term clean, renewable energy, such as wind, solar, and micro-hydro will be the foundation of Vancouver Island's energy future," said energy and climate change expert Guy Dauncey, president of the BC Sustainable Energy Association (BCSEA). "At this critical turning point, we should embrace clean, sustainable energy."
SPEC and BCSEA are two of 12 groups that have joined the Georgia Strait Crossing Concerned Citizens Coalition's (GSXCCC) legal intervention at BCUC hearings that begin Monday in Vancouver. The BCUC will consider the Electricity Price Agreement (EPA) between BC Hydro and Pristine Power, the Calgary-based company chosen by BC Hydro to build the plant.
BC Hydro originally proposed three large gas plants and the GSX pipeline to address the alleged energy supply gap. The GSXCCC and its allies have brought evidence in several federal, provincial and municipal hearings, and similar power plants in Port Alberni, North Cowichan and Nanaimo have been rejected. The GSX pipeline project was cancelled last month when BC Hydro conceded it was unnecessary.
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For further information, contact:
Tom Hackney (250) 381-4463
Peter Ronald (250) 616-7895
Finally, progress in the energy crunch
Les Leyne
Times Colonist (Victoria)
15 Jan 2005
Vancouver Island faces the remarkable prospect in the next few months of actually seeing some tangible progress when it comes to doing something about the looming energy crunch.
The new year marks the 10th anniversary of the first concerted effort to get more power on the Island. It's been a decade of studies, arguments, hearings and false starts. After all that time, there is a chance of a construction start this March on a big gas-fired generating plant at Duke Point near Nanaimo.
But first, there will be an open house today in Nanaimo. That will be followed by another round of arguments starting Monday in front of the B.C. Utilities Commission.
A number of intervenors, some of them potential customers, will press the case that the latest greatest plan to keep the lights on is the wrong way to go.
Opposition is based partly on the premise that it represents a big gamble, in that B.C. Hydro would be committing for the next 25 years to natural gas, which is an uncertain commodity with a mercurial track record in terms of price.
There is a chance the project could once again slip sideways and bring the Island closer to the point where an energy crunch becomes quite real.
But the BCUC hearings centre on a deal -- the electricity purchase agreement between Hydro and the company building the plant -- that the commission indirectly had a hand in bringing about.
So upsetting the applecart and starting over again, for the second time in a year, is viewed as an unlikely prospect.
Which means Duke Point Power could have shovels in the ground at the Nanaimo industrial park by March, although I'd have to see it to actually believe it.
The company was put together by an Australian firm that creates investment partnerships.
The operating people are from Pristine Power, a Calgary-based outfit created by people who had a hand in building the Island's first gas-fired plant, near Campbell River.
They won the dogfight that broke out after the utilities commission looked at Hydro's plan to build the Nanaimo plant and said: "Try again."
Almost two dozen companies piled into the breach created when that huge project was derailed.
A half-dozen made it to a short list and Duke Point Power won the day late last year.
If all goes according to plan, it will built the plant for $280 million and sell the power to Hydro for at least 25 years. (It's worth noting that nothing associated with this idea in the past decade has gone according to plan.)
The big difference between the private firm's gas plant and the gas plant envisioned by B.C. Hydro is that there is no new pipeline supplying it with natural gas.
In one of the more remarkable developments in this long saga, the $340-million pipeline vanished over the Christmas holidays.
Hydro teamed up with a private pipeline partner, spent about $50 million on preparations to build a pipeline under Georgia Strait and endured a National Energy Board hearing that stretched an incredible three years.
But GSX, as it was known, started to look sketchy when the utilities commission called for second thoughts.
Designed when the price of gas was about 30 per cent what it is now, and predicated on the assumption it would serve two or three big generating plants, it was formally buried last month, with Island critics cheering its demise. RIP GSX.
The new plan is to rely on the existing Terasen pipeline to supply the two big generating plants (Campbell River and Duke Point) and add new transmission lines, as well.
It's transmission lines that have been driving all these developments for years.
The big existing ones reach the end of their useful life in 2007 and with tougher national standards following the eastern blackout two years ago, that deadline is considered final.
Gas critics have argued all along that the lines should just be replaced, but that doesn't create any more power, it just gives the Island the luxury of enjoying more electricity without having to put up with actually creating it. And B.C. has been a net importer lately.
Pumped up by their success in getting the GSX cancelled, those same social, environmental and energy critics still have their sights set on the Duke Point plant.
So will the big industrial users, who are worried about price and supply. Critics certainly helped bring down the Hydro version of this project. Next week will be the last gasp effort do the same for this version, but time is short and the chances are slim.
Just So You Know: B.C. Hydro had to swallow all the sunk costs incurred by the Hydro-Williams partnership that went into the GSX project. That amounts to $50 million.
And the sunk costs that went into the Duke Point project amount to $70 million. But $50 million of those costs are recoverable from the company that wants to take over the project. So Hydro will be out a total of about $70 million before this project even gets started.
Trivia buffs will recall that was the original per-ship estimate of the cost of the fast ferries.
'Expert' opinions strangely divergent
John Kimantas
Assistant editor
Nanaimo News Bulletin
15 January 2004
A case can be made for almost anything by lining up statistics the right way, and this is painfully obvious in the debate for the proposed gas plant at Duke Point.
The B.C. Utility Commission begins its hearing today (Jan. 15) at the Coast Bastion Inn, and I'm sure the BCUC will be inundated with people citing the 2002 analysis by an environmental coalition stating the Duke Point thermal generator project will dump as much pollution into the Earth's atmosphere as all the vehicles currently in use on Vancouver Island.
That sure sounds bad.
Well, the 2002 Environmental Assessment Office report on the Vancouver Island Generation Project saw it differently. It concluded the project as presented would meet all applicable levels of pollution standards.
Now you'd think the EAO would be the objective body in all this, and so would be best suited to decide the health risk. But if so, why are there so many other official viewpoints on the same project?
For instance, Environment Canada was critical of the projected pollution levels because Harmac's contributions weren't included in the calculations. Why? Permit values apparently overstate the actual emissions.
The problem is, Harmac could increase its emission levels in the future, as it is entitled. So out the window goes the argument the emission analysis is conservative.
Health Canada was also of the view that levels may be underestimated.
Why? The Vancouver Island Energy Corporation (VIEC) estimated emissions by its own formula instead of using the emission rates specified by the turbine manufacturer General Electric.
So VIEC knows better than the product manufacturer? Wow.
Health Canada also questioned VIEC's analysis emissions from "cold starts" throughout the year.
Meanwhile, we've got the Vancouver Island Health Authority giving the project a thumb's up, stating the VIPG wouldn't have a measurable impact on air quality.
That's great, except I have to wonder who at the health authority is qualified to do more than rubber-stamp the figures presented by VIEC.
And if they aren't, what are they doing contributing to the conclusion?
In the end, I suspect the EAO is probably correct - a gas plant at Duke Point won't kill us. In 2004, though, I'm not sure that's the way we should be looking at pollution levels. We should be looking at cumulative effects and improving our well-being, not eroding it, and that seems to be where the environmental assessment analysis falls suspiciously short.
Do I feel protected by the EAO assessment? Not a bit. I'm not an expert to assess the risk, but if I can find holes in the methodology the experts are using, I get worried.
For my $280 million, I'd be more confident with a very aggressive energy-saving appliance and light bulb replacement program and a few green energy projects to fill the gaps.
It may not solve all our problems, but at least it won't create more. Naturally, the experts disagree.
- John Kimantas is assistant editor at the News Bulletin.
January 12, 2005
BC-SEA Watt's Happening, Jan 2005
BC SEA
Watt's Happening?
January 2005
A Monthly Letter from the BC Sustainable Energy Association
Dear Friends and Fellow BC SEA'ers,
We've got an exciting and a critical few days coming up, when the future of our electricity supply for Vancouver Island will be decided.
And we need your help!
The Duke Point Follies
At issue is BC Hydro's determination to build a 252 MW gas-fired power plant at Duke Point, in Nanaimo. I won't go into the details, as they're laid out on our website at http://www.bcsea.org, and in EcoNews at http://www.earthfuture.com/econews. There are also many good stories at http://www.sqwalk.com/home.shtml.
In a nutshell, the project is going to cost $280 million in hard cash, plus $2.5 billion in additional costs for natural gas, since price inflation is guaranteed. All this, just to bridge a possible peak power gap that may arise on a few cold days in the winter of 2007/8, since BC Hydro is choosing to zero-rate the subsea cable to the mainland 8 months before its replacement can be installed.
It just doesn't make sense. If the BCUC rules in favour of the plant at the Hearing in Vancouver, starting January 17th, it will set back the possibilities for green, sustainable energy on the Island for many years. And, gosh darn, that just don't seem right!
There is some hope that we might just win this battle if people speak up. We understand that the BC politicians and bureaucrats are very worried about the project, and likely to be swayed by public opinion. It's got "Fast Cat Ferries" written all over it.
So can you help, by adding your shoulder to the shove?
1. If you live on the South Island, there is still time to ask to speak at the Nanaimo Town Hall Meeting scheduled for this Saturday at the Coast Bastion Hotel, Malaspina Room. You must register by this Tuesday 11th by phoning Gordon Fulton (604) 687-6789 or emailing gfulton@boughton.ca. Don't say you represent the BC SEA, because the BCUC is taking the line that since we are an Intervenor, we've had our chance to speak.
2. If you live on the South Island and don't want to speak, you could still come to Nanaimo this Saturday to join the audience in the Coast Bastion, and the creative protest that will be happening outside the Hotel from 12-1pm, with hand-drummers, and three of the Gabriola Island Positive Energy Quilts. If you'd like to share a ride from Victoria, call Bill Pearce at 250-595-4994.
3. We need a deluge of letters, phone calls, and emails pointing out how ridiculous this is, sent to the BCUC, with copies to politicians and the media. The contact details are below. So read the articles, put your brain in gear, and enjoy yourself! As I said, we need all the help we can get.
More news soon! Watch our website at http://www.bcsea. And now: please get those letters and emails flowing!
With best wishes,
Guy Dauncey
President, BC SEA
http://www.bcsea.org
Duke Point: Please write to:
BC Utilities Commission:
Mr. Robert J Pellatt, Commission Secretary
BC Utilities Commission, Sixth Floor, 900 Howe Street, Box 250, Vancouver V6Z 2N3
Email: commission.secretary@bcuc.com
Gordon Campbell, Premier:
gordon.campbell.mla@leg.bc.ca
c/o Legislative Assembly, Victoria V8V 1X4
George Abbott, Minister of Sustainable Resource Management
Phone 250-356-9076
P.O. Box 9054 Stn Prov Govt, Victoria V8W 9E2
George.Abbott.MLA@leg.bc.ca
Richard Neufeld, Minister of Energy & Mines
richard.neufeld.mla@leg.bc.ca
c/o Legislative Assembly, Victoria V8V 1X4
Mike Hunter, MLA
Mike.Hunter.MLA@leg.bc.ca
c/o Legislative Assembly, Victoria V8V 1X4
Bill Barisoff, Minister of Water, Land and Air Protection,
bill.barisoff.mla@leg.bc.ca
PO Box 9047, Stn Prov Gov't, Victoria V8W 9E2
Honourable Joy McPhail
joy.macphail.office@leg.bc.ca
Room 104, Parliament Buildings, Victoria V8V 1X4
Letters to The Editor, Please!
Gabriola Sounder
Editor: Sue deCarteret
sounder@island.net
Harbour City Star
Editor: Terry Denomme
citystar@island.net
Nanaimo News Bulletin
Editor: Kevin Laird
edit@nanaimo.vinewsgroup.com
Nanaimo Daily News
Editor: Peter Godfrey
dnews@island.net
Times Colonist
Letters to the Editor
letters@tc.canwest.com
Vancouver Sun
Letters to the Editor sunletters@png.canwest.com
CBC RADIO
The Early Edition
earlyed@vancouver.cbc.ca
On the Island
victoria@cbc.ca 250-360-2227
BC Almanac
almanac@vancouver.cbc.ca
--
BC Sustainable Energy Association
395 Conway Rd, Victoria B.C. V9E 2B9
(250) 881-1304
http://www.bcsea.org
SPEC joins GSXCCC in opposing Duke Point Power
Immediate Release: Jan. 11, 2005
SPEC joins GSX Coalition in opposing Duke Point power plant.
The Society Promoting Environmental Conservation (SPEC) is joining the Georgia Strait Crossing Concerned Citizen’s Coalition (GSXCCC) in opposing a second attempt by BC Hydro and its private partner Pristine Power Corporation to build a 252 mw gas-fired power plant at Duke Point near Nanaimo.
“It was due to GSXCCC and thousands of Vancouver Island residents that BCHydro’s first attempt at constructing a fossil-fuel power plant at Duke Point was rejected by the BCUC (BC Utilities Commission) in 2003,” said SPEC President Gerry Thorne. “And the way Duke Point will finally be put to rest is by again working together to demonstrate the potential harm that would result if Duke Point were constructed.”
An independent analysis conducted in 2002 by SENES consultants for SPEC, GSXCCC and the David Suzuki Foundation, found that Duke Point would pump dangerous amounts of nitrous oxide, sulphur dioxide, fine particulate matter and other harmful air pollutants into the Nanaimo and Georgia Basin airshed.
“Duke Point would, moreover, emit more than 900,000 tonnes of greenhouse gases annually,” said Thorne. “This is ironic given that just last month the Provincial Government released its Climate Change Plan that calls for a reduction in greenhouse gas emissions in BC.”
In the 1970s SPEC was part of a province-wide coalition that prevented former Social Credit Premier WAC Bennett from building nuclear power plants on Vancouver Island. SPEC is also an intervenor in the process that has so far prevented a US corporation from building a gas power plant at Sumas that would adversely affect the air quality in Abbotsford and the Lower Fraser Valley.
The BC Utilities Commission will begin public hearings on Duke Point on January 17 in Vancouver.
Information: SPEC 604-736-7732 www.spec.bc.ca
Is BC Hydro “jamming” the Commission?
BC Hydro is stonewalling intervenors seeking information in advance of the DPP hearing which will begin in Vancouver on January 17. The BCUC itself has committed to a decision on February 17. It's a situation ripe for the botching - rushed, things done by halves, arguments formed without necessary information.
The BC Public Interest Advocacy Centre may have assessed the situation best in its letter dated January 11, 2005, to the BCUC Panel, filed as C3-10.
An extract:
Re: British Columbia Hydro and Power Authority - Project No. 3698354 Call for Tenders for Capacity on Vancouver Island Review of Electricity Purchase Agreement
These are the comments of BCOPAO et al. in response to Exhibit B-40, concerning BC Hydro’s procedural proposals in this matter.
As I warned the Panel at the Pre-Hearing Conference on December 17, it appears that BC Hydro is attempting to “jam” the Commission and produce a pre-ordained end result in these proceedings. A key element of this apparent strategy has been to hold a concocted deadline like a sword over the Commission’s head. The implied threat is that the slightest delay or extension of the hearing, and ultimately of the operation of the VIGP plant, will result in the lights going out on Vancouver Island on November 1, 2007. With inadequate time available prior to the posited deadline to conduct a proper exploration of the public interest, the remedy advocated by BC Hydro is to truncate the proceedings by narrowing the issues and hog-tying the participants.
Hydro’s way of minimizing the options before the Commission, and impelling the process toward approval of its pet project, has been to restrict the agenda to the limited menu of specific “solutions” selected by Hydro itself. This very constricted stance is itself a retreat from Hydro’s initial position, that the only issue before the Commission is whether the Call of Tenders procedure was conducted fairly!
BC Hydro has compounded the pressure on the Commission and hearing participants through an obstructionist approach toward information-disclosure: from one side of its mouth, it says that time-pressures require drastic and arbitrary limits to parties’ time for cross-examination; from the Robert J. Pellatt Commission Secretary January 11, 2005 other, its response to every request for pre-hearing disclosures is that parties may cross examine panels, using scarce hearing-time, to obtain more information. Hydro holds fast to this stance
even where disclosure would be a quick and simple way to reduce the pressure on hearing time.
On the subject of making efficient use of hearing time, Exhibit B-40 indicates that Hydro knows what witness panels it will produce; however, it has not seen fit to share this information with participants, to assist them to prepare for the hearing. Furthermore, we now are left playing yet another game of “blind man’s buff,” compelled to comment on our right of cross-examination but denied any inkling of the line-up of witness panels to assist us to evaluate these issues
concretely.
We ask that BC Hydro immediately advise participants which witness panels it intends to produce, and in what order, or that the Commission order Hydro to do so by the close of business today.
If ever there were a case before the Commission that cried out for “getting it done right” rather than plowing through a hasty process, this is it. This reincarnation of the VIGP has a long prehistory, whose genesis lay deep in the political arena. It now has all the hallmarks of a hobbyhorse driven by internal politics and turf.
If the Duke Point proposal is approved, it will have large and long-term ramifications for ratepayers. As things stand now, we would be strongly disinclined to recommend to our clients that they support it; we suggest to Hydro that it would be in its interests (assuming that the proposal is actually aligned with them) to afford us and other participants a full opportunity to be
convinced that the project makes more sense than is apparent now.
The Reasons for Decision for Order G-119-04 concludes, at page 4, that the effect of Policy Action #13 of the Provincial Government’s Energy Plan is “to establish competitive bidding processes as an important means to secure future supply.” All the more important that, in this first proposed major implementation of that Policy, the Commission get it right.
Read the entire letter here: C3-10
January 11, 2005
A 'BC Hydra' project that just won't die
Mark Jaccard
Vancouver Sun
11-Jan-2005
Hydra was a monster in Greek mythology that Hercules had difficulty slaying because each time he severed its head, one or two replacements popped out.
For citizens resisting BC Hydro's efforts to build an electricity plant fuelled by natural gas on Vancouver Island, the company's name has changed to BC Hydra.
Last month, after four years of struggle, including major public hearings before the National Energy Board and the B.C. Utilities Commission, BC Hydro cancelled the Georgia Strait crossing, a pipeline to ship gas to its proposed generation plant at Duke Point near Nanaimo.
But opponents of the pipeline and plant had no time to celebrate because Hydro simultaneously announced an agreement to sell the site to a private company, Duke Point Power, which will build the 250-megawatt plant and sell the power back to Hydro. The plant will be fuelled by natural gas from the existing Terasen Gas pipeline across the strait.
Opponents of generating electricity by burning natural gas, which emits local air pollutants and greenhouse gases, thought they had defeated the project when they convinced the B.C. Utilities Commission to reject Hydro's proposed plant in 2003.
But Hydra's (I mean Hydro's) pet project has popped back out, so they must battle again this month before the commission in a hearing to approve Hydro's electricity purchase agreement with Duke Point Power.
Ironically, the plant may not be needed. The B.C. Transmission Corp., now a separate company from Hydro, intends to replace some of the aging undersea cables supplying the Island with higher-capacity ones.
NorskeCanada, the largest consumer of electricity on the Island, has offered to shift operation of its pulp mills so that peak electricity demand can be met until the new cables are operating in 2008.
At the same time, BC Hydro is launching a province-wide electricity planning process that could lead to rejection of any natural gas plants for a decade or more because of the fear of rising natural gas prices and B.C.'s wealth of economical, environmentally friendly alternatives. These include more efficiency from Hydro's Power Smart program, combusting wood waste from pulp mills, small hydro and wind projects, cogeneration at industrial plants and large buildings, and perhaps large hydro.
A second irony is that while the provincial government and BC Hydro talk environmental stewardship, rejecting this natural gas plant is in fact the province's lowest-cost option for reducing greenhouse gas emissions that threaten climate change.
For the past 15 years, my research group at Simon Fraser University has been estimating for government, industry and non-government organizations the cost of alternative actions to reduce greenhouse gas emissions. It doesn't get any cheaper than this. Indeed, if natural gas prices continue their upward trend, we would reduce both our electricity bills and greenhouse gas emissions by cancelling the contract in favour of our other electricity options.
How did we get into this mess? BC Hydro's natural gas strategy is a legacy of the NDP government, abetted by Glen Clark's use of Hydro for political purposes, which included removing it from utilities commission oversight.
Once real dollars are spent on site acquisition, equipment and regulatory processes, it takes effort and time to turn the ship around.
The Liberal government, led by ministers Richard Neufeld and Joyce Murray, did the right thing in putting Hydro back under regulation. The commission, led by Robert Hobbs, did the right thing in rejecting the Duke Point project in 2003.
Even Hydro, under Larry Bell and Bob Elton, is now doing the right thing in launching a major electricity planning process to get the views of customers and other stakeholders.
But in a calamity of unintended consequences, the Duke Point project has re-emerged. There are many opportunities to play Hercules, but will any of the key players show leadership?
The government can tell its Crown corporation to drop the project for environmental reasons. When in opposition, Gordon Campbell called for cabinet rejection of the Kemano Completion Project for this very reason.
BC Hydro management can cancel the contract because of the gas cost risk and in the process give some credence to all those ads lauding its environmental image.
The utilities commission can reject the electricity supply agreement because of the gas cost risks.
What can you do? You might show up at the hearing. If you don't have time, you could at least write a letter to the premier and your MLA. Their ears function quite well in the months before an election.
You might even try writing BC Hydra. But Hercules would suggest caution.
Professor Mark Jaccard is with the school of resource and environmental management at Simon Fraser University.
BCTC seeks environmental assessment for new 230 kV cable system
On November 10, 2004, BC Transmission Corp filed an application with the Environmental Assessment Office requesting that the EAO voluntarily designate the Vancouver Island Transmission Reinforcement Project (VITRP) as a reviewable project.
On January 11, 2005, the EAO saw fit to post the letter of application and the EAO's order, to the website: www.eao.gov.bc.ca
The project is a new cable system from BC Hydro's Arnott Substation in Delta to the Vancouver Island Terminal Substation in Duncan. Its route is roughly - through Tsawassen, under the Strait of Georgia except where it crosses Galiano Island and Salt Spring Island, terminating just north of Duncan.
In service date is stated to be October 31, 2008.
The VITRP has been long sought by the GSX Concerned Citizens Coalition, and is believed to have been the solution preferred within BC Hydro to replace the aging HVDC cable system that follows the same route.
It is in the context of the Duke Point Power Proposal, for which the BCUC is conducting a hearing in January 2005 with a decision expected on February 17, 2005 (the VICFT-EPA proceeding, more about which is on www.sqwalk.com and at the BCUC website), that the VITRP is particularly of interest.
Since the HVDC are expected to be derated (note: not taken out of service) in March 2007, there is only an eighteen month gap during which Vancouver Island will be in supply deficit.
During this relatively brief interval, Norske Canada has made a Demand Management Proposal (NCDMP), to shift or curtail demand for between 30 and 210 MW at peak load periods. The BC Transmission Corp review of the NCDMP concluded:
"BCTC believes that NorskeCanada’s proposal, in combination with other stopgap measures, could help resolve the forecast short-term capacity shortfalls prior to the installation of the proposed Vancouver Island Transmission Reinforcement Project. (link)
For this reason, we and other intervenors in the VICFT-EPA review are strongly of the opinion that the Duke Point Power gas-fired project, costing at least $280 million before we even begin to tally up the cost of fuel for 25 years, is a badly misguided and inappropriate "solution" to a short term bridging problem.
Much as the GSX Pipeline triggered a lot of local concerns, so too is the VITRP. Of note, residents of Tsawassen are justifiably concerned that this brand new cable system is passing right through town and residential areas, above ground, with new unsightly towers, electromagnetic health impacts, etc. Moving it north, along the highway may be a better solution, as may be moving it underground.
For more information:
- keep tabs on www.sqwalk.com
- the Environmental Assessment at www.eao.gov.bc.ca
- BC Transmission Corp project site www.bctc.com
- BC Utilities Commission review of the Vancouver Island Call for Tenders - Electricity Purchase Agreement between BC Hydro and Duke Point Power: www.bcuc.com
January 04, 2005
Hydro rate increase looms
Scott Simpson
Vancouver Sun
03 Jan 2004
Three-per-cent hike predicted to help pay for new Island power plant
BC Hydro customers should learn in a few days the full cost they will pay for a new Vancouver Island electricity supply after the B.C. Utilities Commission ruled Hydro cannot keep secret the details of a $280 million deal with a private sector power company.
Industry stakeholders and other Hydro watchdog groups began this week to pore over financial details of a contract between Hydro and Pristine Power, and their preliminary estimates suggest a new gas-fired generating plant on the Island will boost electricity costs for all Hydro customers by about three per cent.
Hydro's own estimate, based on information provided to the B.C. Old Age Pensioners Association, is that consumer prices would have to rise 2.2 per cent in the first year of operation.
Hydro is seeking a secure supply of electricity for the Island and announced in November a deal with Pristine to buy electricity from a 252-megawatt gas-fired generating plant to be built at Duke Point, near Nanaimo.
Hydro and Pristine had sought to keep certain details of the deal confidential, particularly those that set out the price Hydro will pay for electricity from the plant, for what are described as competitive reasons.
But the BCUC rejected that stance in late December and critics of the project are now examining documents that set out, in complex fashion, the pricing formulas that will apply to Pristine's electricity sales to Hydro.
Hydro power planning manager Mary Hemmingson declined to comment on the commission's decision, saying the appropriate forum is before the BCUC.
A public hearing on Hydro's selection of Duke Point is scheduled for Jan. 17 in Vancouver. The deadline for interveners to file written evidence on the project is Thursday.
"We are still committed to the fact that the Duke Point award is the most cost-effective solution to meet the needs on Vancouver Island," Hemmingson said on Monday.
She said other options don't offer the same standard of reliability as Duke Point.
The Joint Industry Electricity Steering Committee, which represents Hydro's major industrial customers, expects it will take a few days to calculate the actual cost to consumers.
Dan Potts, the steering committee's executive director, said recently that Hydro customers should "brace themselves for higher prices" if the utilities commission approves the Duke Point plant.
Hydro plans to use Duke Point only on a part-time basis, to bump up electricity production when demand is strongest.
Potts says the net effect of that plan will push the production cost of Duke Point electricity to $200 per megawatt hour -- more than three times the amount Hydro residential customers now pay for electricity.
"We were frustrated that we didn't have access to the kinds of details that we think the public deserves to see," said steering committee spokesman Brian Battison.
"The public can only make informed decisions or comment if they have all of the facts. Those facts were not forthcoming, and so we welcome the utilities commission's decision to make the details of that contract public.
"With that information we can now make a determination on the cost impact for all electricity consumers in the province, from the VIGP project."
Meanwhile, the industry steering committee and other groups continue to express concern about Hydro's selection of a project relying on natural gas as fuel.
Natural gas has tripled in price since the Duke Point project was first announced in 2000, and there is a strong belief among market watchers that gas is no longer a cost-effective fuel for electricity generation.
The National Energy Board has been warning for two years that the maturation of the nation's gas patch, the Western Canada Sedimentary Basin means a permanent tightening of North American gas supplies.
In November, the Canadian Energy Research Institute described natural gas as "an unattractive option for baseload power" if gas prices remain high -- a scenario it portrayed as likely.
"That is consistent with our concern with respect to this project -- the vulnerability that ratepayers have in terms of their exposure to gas prices," Battison said.
JIESC wants the utilities commission to reject Duke Point.
© The Vancouver Sun 2005