August 31, 2010

Fortis to build $900-million hydroelectric dam in British Columbia

CASTLEGAR, B.C.

Canada’s largest private-sector power company plans to build a $900-million hydroelectric plant in southern British Columbia, with two provincial agencies as partners.

Fortis Inc. of St. John’s, N.L., will own 51 per cent of the hydro plant, known as the Waneta Expansion, that will supply BC Hydro and FortisBC, the electricity provider for the Southern Interior.

The project near Trail, B.C., is being led by Fortis in partnership with the B.C. government-owned Columbia Power Corporation and Columbia Basin Trust.

The project will bring about 400 jobs and $200 million in wages and benefits to the region, according to B.C. Energy Minister Bill Bennett, who represents a riding in the region.

“This is a good, cost-effective way to generate electricity,’’ he said in an interview.

“We’ve got this capacity, this water going over the existing dam that no one is currently paying for, no one is currently renting. It was an unexploited opportunity. It’s been on the drawing board for several years.’’

Other companies interested in the project will have until Sept. 13 to submit alternatives to the Fortis plan, through BC Bid.

Montreal-based engineering and construction services giant SNC Lavalin was chosen as the preferred candidate to be the project’s contractor in May 2009.

At the time, Waneta Expansion Power Corp. — a subsidiary of Columbia Power Corporation and Columbia Basin Trust — said construction could begin as early as last fall

But the project was put on hold in November, when the provincial agencies announced the power plant plan had to be restructured.

They said that SNC Lavalin continues to be the preferred construction contractor.

Fortis, which owns Newfoundland Power and other utilities in Ontario, British Columbia, Alberta and P.E.I., said that each of the expansion project’s partners will be responsible for funding their portion of the cost.

“Fortis is excited about this opportunity to grow our non-regulated hydroelectric generation business in British Columbia,’’ Fortis president and CEO Stan Marshall said in a statement.

Among Fortis’ customers are people in the Okanagan Valley, where searing hot summer temperatures mean few live without air conditioning.

“You’ve got all this demand in the summer time and you have to be able to meet that demand, your customers need it,’’ Bennett said.

The Waneta Expansion project is envisioned as a second powerhouse located at the Waneta Dam near Trail, B.C.. The current plant supplies power to the zinc smelter operation owned by Teck Resources, with surplus power sold.

In 1994, B.C. acquired expansion rights to the Waneta Dam from Teck. They were then transferred to Columbia Power, a Crown corporation with a mandate to invest in clean and renewable power projects in conjunction with the trust.

The expansion project is expected to generate 335 megawatts. That compares to the 900 megawatts that would be generated by the proposed Site C hydroelectric megaproject.

Last year, Teck sold a one-third interest in the Waneta Dam to BC Hydro, another provincial Crown corporation, for $825 million. That move was part of Teck’s efforts to reduce debt.

Canadian Press

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