[Scape]

B.C. parties square off over power production

$1:

Election sees heated debate as NDP opposes Liberal plan for privately owned and operated run-of-river and wind projects

DAVID EBNER

May 5, 2009

VANCOUVER -- When B.C. voters go to the polls next Tuesday, they will not only choose a new government, but also decide the fate of an entire industry in the province - private power production.

The New Democratic Party, running neck-and-neck with the incumbent Liberals, wants to return B.C.'s focus to public power and is vowing to slap a moratorium on private production, hitting developers working on wind power and run-of-river projects.

A Liberal win would spell a big victory for upstart power producers.

Last year, the government launched a call for green power through publicly owned British Columbia Hydro and Power Authority. The utility is planning deals for at least 3,000 gigawatt hours of power - enough electricity for about 300,000 homes and, all in, roughly $5-billion in construction if every project went ahead. Long-term contracts with private energy providers are to be awarded this summer and would be a significant step for small firms.

But a moratorium would cast a chill on an already uncertain industry, according to Cloudworks Energy Inc., which has nearly completed one project near Vancouver and has bid for two more.

"There would be no more growth story," said John Johnson, a principal at privately held Cloudworks in Vancouver. "We wouldn't find it that devastating but some of the guys have sold growth stories."

B.C. has some of the lowest electricity prices in North America because of abundant hydro resources developed in the 1960s and '70s. But in seven of the past eight years, the province imported electricity from the United States. The goal, by 2016, is to once more produce enough electricity to power the province - and it has to be eco-friendly, as B.C. chases some of the toughest goals anywhere for reducing greenhouse gas emissions.

Several dozen small run-of-river projects already generate electricity, providing less than 5 per cent of the provincial supply. The technology diverts water out of a river and carries it in a pipe, usually over several kilometres and, importantly, a vertical drop of several hundred metres. The rushing water goes through a turbine before re-entering the river.

Even if the Liberals win, however, financing remains a major issue given the recession. Most of the projects that have won power-purchase agreements have not been built, unable to make it past various permit processes - and failing to get the money to build.

"To finance $1-billion, it's just not there right now," said Mr. Johnson, describing the situation for private power developers. "If you tried to do something for $150-million or $200-million, it's probably there - it's just more expensive."

With the environment cemented as a top priority for voters, clashes on green issues are bringing together unlikely allies and breaking apart old alliances.

The NDP's stand against private power, including run-of-river projects, and its opposition to a tax on carbon has divided B.C. environmentalists, and drawn considerable backlash from some long-time supporters such as David Suzuki, who backs careful run-of-river development, and climate scientist Andrew Weaver at the University of Victoria.

"When you have that kind of support, it's hard [for opponents of such projects] to make it an issue," said analyst Tania Maciver of Haywood Securities Inc. "Everyone's waiting for the election to be finished and [BC Hydro's] call for power to be announced. It's a catalyst for the companies."

A moratorium on green power such as run-of-river would be foolish, scoring "cheap political points," said Prof. Weaver, who argues that reducing greenhouse gas emissions is of paramount importance.

"I hope the environmental movement sees the NDP for what it is - opportunistic," he added, noting that the export of green power from B.C. to displace the use of coal or other dirtier power elsewhere is a positive.

The NDP, which governed B.C. for a decade until 2001, has the support of many voters who don't want to see power projects in the province's rivers, especially if the goal is to export the resulting energy.

They say such projects would be unnecessary if conservation were the primary focus.

The most controversial run-of-river scheme is a $4-billion, 1,027-megawatt proposal by Plutonic Power Corp. PCC-T and General Electric Co. GE-N Located in the remote Bute Inlet north of Vancouver, it would include power installations on 17 streams and rivers.

"These are not micro, green hydro projects," argues opponent Vicky Husband, a veteran environmental activist.

Another critic accuses the B.C. government of paying too much for run-of-river power from private companies, creating an artificial market.

John Calvert, a political scientist at Simon Fraser University and author of Liquid Gold, a book that argues against the privatization of energy, says B.C. could end up with more power than it needs, costing citizens and companies who pay for the power in long-term deals through BC Hydro.

BC Hydro does have its own options to add electricity beyond private producers. It is expanding old dams and is considering a new dam in northeastern B.C., which could cost more than $6-billion and deliver more electricity than all the green power the utility is looking for from private projects.

Still, the province insists all the power is necessary.

Plutonic Power, co-developer of the massive Bute Inlet proposal, says the private power industry benefits smaller rural communities and native communities, providing jobs and training, as well as taxes to local governments.

"There's a huge opportunity for British Columbia to be a leader in renewables," said Donald McInnes, Plutonic's chief executive officer.

Meanwhile, the developers of what would be Canada's first offshore wind farm are busy obtaining environmental approvals, signing on a construction contractor and looking for another partner.

The $2-billion project in Hecate Strait, between Haida Gwaii and Prince Rupert, would include up to 110 turbines. It is being planned by NaiKun Wind Energy Group Inc. NKW-X and Enmax Corp., a utility owned by the City of Calgary.

"We do pay attention to the election," said NaiKun CEO Paul Taylor, "but it's something we can't control."

***

Publicly watching

Several public companies potentially affected by the election outcome:

Canadian Hydro Developers Inc. (KHD-TSX)

The Calgary hydro company has proposed three small projects in B.C., totalling 39 megawatts, which would cost $90-million. It is a small part of the company's broader portfolio.

Finavera Renewables Inc. (FVR-TSX Venture)

The Vancouver wind developer has proposed four projects totalling 295 megawatts, costing $800-million - backed by General Electric Co.

NaiKun Wind Development Inc. (NKW-TSX Venture)

The Vancouver wind developer has a large, 396 megawatt proposal with BC Hydro, which would be Canada's first offshore wind energy project, located near Haida Gwaii in B.C.

Plutonic Power Corp.

(PCC-TSX)

Based in Vancouver, the upstart power company has proposed a sprawling $4-billion, 1,027-megawatt run-of-river project in the Bute Inlet, financially backed by General Electric Co.

[Brenda]

Imo, if you privatize it, don't be involved as a government. Don't build the plants, don't subsidise. If you as a government wanted to invest in that, you could only do that if the money is there. It isn't now, so let the companies, who are going to make the profits anyway, build it themselves.

[ridenrain]

The NDP was promoting and approved run of river power back in the 90's so for them to now say this is bad is crass politics. It's just the same as James slagging the new Port Mann bridge then suddenly flip flopping during the debate.
BC politics..

[N_Fiddledog]

ridenrain ridenrain:

The NDP was promoting and approved run of river power back in the 90's so for them to now say this is bad is crass politics. It's just the same as James slagging the new Port Mann bridge then suddenly flip flopping during the debate.
BC politics..

Are you talking about that one the Kemano II issue spun out of, where Alcan snookered the government into letting them create hydro projects, supposedly to create smelting jobs, but then they simply slowed the mills down, and made easy money from the power sales? Didn't they start exporting that power to the US?

Montana had problems when they started privatizing electricity too. They totally sold out, lost control of a natural resource, and wound up with 20% hikes on their power bills.

I don't know man. On this issue I swing left. In fact this raging righty might swing left far enough to vote James this time. She's not the only one who can be hypocritical on this issue.

Besides, anything David Suzuki, and Andrew Weaver are for, I'm against.

[commanderkai]

Brenda Brenda:

Imo, if you privatize it, don't be involved as a government. Don't build the plants, don't subsidise. If you as a government wanted to invest in that, you could only do that if the money is there. It isn't now, so let the companies, who are going to make the profits anyway, build it themselves.

I'll agree with that. At the same time, the government shouldn't put too many unreasonable regulations upon the business to make it unprofitable as well.

[Sapio]

I almost do not need to respond to this question. I think that everyone knows what I'm going to say. Power is not the government job.

Hi, My name is Sapio and I'm a broke record.

[herbie]

commanderkai commanderkai:

Brenda Brenda:

Imo, if you privatize it, don't be involved as a government. Don't build the plants, don't subsidise. If you as a government wanted to invest in that, you could only do that if the money is there. It isn't now, so let the companies, who are going to make the profits anyway, build it themselves.

I'll agree with that. At the same time, the government shouldn't put too many unreasonable regulations upon the business to make it unprofitable as well.

Sure let's do that. Let's DROP the premium price BC Hydro will pay these guys for power production. Then they can build their own power lines to deliver it.
OH GEE... WAIT... we already SOLD the fucking power lines themselves. Guess they'll have to tell Hydro there's no more capacity to deliver power to Sapio's house because they get better rates delivering Plutonic's output to California! Then we'll all have to pony up to build new lines, of course not thru a Crown Corp as that would be unfair to the private business, but so they could make a profit building the lines and a profit delivering the power and on and on and on....

If your Liberal candidate won't swear to oppose the sale of Hydro, don't vote for him or her. And pin them on it at your town hall meeting, because they wouldn't ask that on the leader's debate!

[Scape]

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[commanderkai]

herbie herbie:

commanderkai commanderkai:

Brenda Brenda:

Imo, if you privatize it, don't be involved as a government. Don't build the plants, don't subsidise. If you as a government wanted to invest in that, you could only do that if the money is there. It isn't now, so let the companies, who are going to make the profits anyway, build it themselves.

I'll agree with that. At the same time, the government shouldn't put too many unreasonable regulations upon the business to make it unprofitable as well.

Sure let's do that. Let's DROP the premium price BC Hydro will pay these guys for power production. Then they can build their own power lines to deliver it.
OH GEE... WAIT... we already SOLD the fucking power lines themselves. Guess they'll have to tell Hydro there's no more capacity to deliver power to Sapio's house because they get better rates delivering Plutonic's output to California! Then we'll all have to pony up to build new lines, of course not thru a Crown Corp as that would be unfair to the private business, but so they could make a profit building the lines and a profit delivering the power and on and on and on....

If your Liberal candidate won't swear to oppose the sale of Hydro, don't vote for him or her. And pin them on it at your town hall meeting, because they wouldn't ask that on the leader's debate!

I was more hinting at not being ball breakers over things like building nuclear power plants, or added taxes due to NIMBY effects. I said unreasonable regulation, not "No regulation"

[Proculation]

When a project is public, you (the taxpayers) pay for it. It reminds me of the debate about Hydro Québec here. "If we privatize it, it will cost more !!". Yes, but if we privatize it, we won't have a debt anymore and we will get dozens of billions more every year to spend on our big nanny state.