$4 billion power project announced

By Paul Rudan

Published: November 25, 2008 3:00 PM
Updated: November 25, 2008 4:20 PM

Plutonic Power Corporation and GE Energy Financial Services have submitted an unprecedented $4 billion plan to BC Hydro to build run-of-the-river power projects on the mainland coast east of Campbell River.

Plutonic announced the initiative Tuesday, calling it the largest single private sector hydroelectric generation investment in Canadian history.

"Today's submission is the culmination of four years of planning, engineering, consultation, permitting and licensing," said Plutonic Vice-Chair and CEO Donald McInnes in a news release. "We are grateful to our First Nations partners, and the cities of Powell River and Campbell River for supporting our bids."

The bid is in response to BC Hydro's "Clean Power Call" in June. Hydro wants 5,000 gigawatt hours of electricity per year in order to help make B.C. electricity self-sufficient by 2016.

This must also be accomplished using 90 per cent clean domestic generation sources.

Plutonic and GE Financial have already teamed up to build the $600 million run-of-the-river power project in Toba Inlet, along East Toba River and Montrose Creek.

The power plants and lines are presently under construction and are expected to begin delivering 196 megawatts of electricity to the BC Hydro grid by mid-2010.

The new projects, proposed in the bid, would be situated in the Upper Toba Valley and in Bute Inlet, and would cost an estimated $4 billion. Once completed, they would produce 1,200 megawatts of electricity – enough energy to power 330,000 homes.

Funding for the project would come from GE Financial, an American-based firm which could also secure loans for financing. Both Plutonic (PCC: TSX) and GE (NYSE: GE) are publicly traded companies.

BC Hydro is expected to announce the winning bids between next April and June.

Plutonic is currently in negotiations with the Campbell River-based Homalco Indian Band whose traditional territory lies within Bute Inlet. An agreement would be required to move ahead with the projects in Bute Inlet.

The company has already signed working and financial benefit agreements with three other First Nations bands for the projects in Toba Inlet.

"These projects will provide long-term economic and social benefits to these First Nations and communities in addition to providing BC Hydro with clean electricity," said McInnes.


The Upper Toba Valley Hydroelectric Project


The Upper Toba Valley Hydroelectric Project, with a generation capacity of approximately 166 megawatts, consists of three generation facilities that will connect to the BC Hydro grid through a 230- kilovolt line already under construction for the Plutonic Power and GE Energy Financial Services East Toba River and Montrose Creek run-of-river project. The Upper Toba Valley Hydroelectric Project is expected to be permitted by the end of the second quarter in 2009. The project will be able to take advantage of infrastructure already in place in the Toba Valley.


The Bute Inlet Project


The Bute Inlet Project, with generation capacity of approximately 1,027 megawatts, consists of 17 facility sites in three areas: the Homathko, Southgate and Orford Rivers. The Bute Projects have been registered with both provincial and federal permitting authorities. A formal application for an environmental assessment certificate is expected to be submitted in late 2009.

Its needed and no better time to build it due to the sagging economy especially on the upper Island which is already reeling from the cutbacks in the forestry industry.

That is fantastic news on many counts.
Right time in the economic cycle for a stimulus, goal of electric independence for the province is laudable and run-of-the-river power minimizes flooding large areas, hence its environmental impact. Good all around.

This is a slippery slope. The problem is that BC Hydro isn't building, nor will they own, these generators. They sign a long term set contract with the company at a very high rate, that will not go down with the market. Then once the contract is up, they are allowed to sell the electricity to whomever. This will then put pressure on Hydro to either pay a premium or lose the power from its supply. Power is a natural monopoly and should be run as a crown corporation from generation to distribution. Otherwise, it ends up costing the consumer and taxpayer more in the end.

my understanding is that all run of the river licenses are for 35yrs at which point they revert back to BC hydro, hence the extra cost of the power as they are amoritizing the cost of the construction in it. Can anyone clarify?

I grew up in Powell River and have spent a summer in Toba about 5 years ago. I know someone who is (or was) working up on the Toba project.

Thats awesome news. Big goals, clear deadlines... lets hope it all goes as planned. Does the 90% rule include nuclear as a clean energy source?

^^
RE: Nuclear Power
http://www.straight.com/node/151079

Quote: "No Nuclear Power"

So No.

Realistically, BC Tax payers would need to pay extra either with a private corporation or public. If BC Hydro sells power below market rates, then we're subsidizing them and losing out on potential revenue income. At least with private companies we can directly see the costs associated with it.

Woohoo! Energy Independence!:banana:
:lol:

Power is a natural monopoly


How is it a natural monopoly? Isn't it an almost perfect private good, since it has almost no transport costs and realistically is the same good anywhere? (ie, it's not like clothing where it does matter whether it's Nike or Roots goods you're buying)

It also clearly does not satisfy any of the criteria of a public good.

How is it a natural monopoly? Isn't it an almost perfect private good, since it has almost no transport costs and realistically is the same good anywhere? (ie, it's not like clothing where it does matter whether it's Nike or Roots goods you're buying)

It also clearly does not satisfy any of the criteria of a public good.

The infrastructure is the public good, the power lines, the dams, etc.

When it was built, it was mostly built with public funds because no private investor wanted to build it. Now that it has been built, they have no problem using it or jumping on it. The other fact being that because of said infrastructure and the nature of the good, it will naturally become a monopoly. A monopoly is always best in the hands of the public, not private.