Province ruling hits BC Hydro call for power, advances 900-MW Site C

In a ruling labeled shocking by one energy group, the British Columbia Utilities Commission (BCUC) rejected part of BC Hydro’s long-term acquisition plan for renewable energy. However, the regulator did approve advancing the study of the 900-MW Peace River Site C hydro project and expansion of the 1,792-MW Mica hydro project.

The ruling created uncertainty for independent power producers including 45 hydropower projects representing 8,700 gigawatt-hours (GWh) of annual generation. BC Hydro had intended to complete evaluations from its Clean Power Call for up to 5,000 GWh and award power purchase contracts following the anticipated BCUC ruling.

It was uncertain what action would be taken by BC Hydro, which said it was reviewing the 236-page decision.

The province-owned utility said in December 2008 that 43 independent power producers submitted a total of 68 projects to the Clean Power Call. (HydroWorld 12/4/08) In addition to the 45 hydro projects, offers included 19 wind projects and four projects powered by waste heat, biogas, or biomass.

In its surprise ruling July 27, 2009, BCUC rejected BC Hydro’s long-term business plans, saying the utility did not sufficiently prove its need for the independent power. Additionally, the regulator ordered BC Hydro to continue operating its aging natural-gas-fired Burrard power plant, which BC Hydro seeks to phase out.

Shares of publicly traded Canadian renewable energy companies slumped after the unexpected ruling. The BC Sustainable Energy Association (BCSEA) issued a statement titled “Energy regulator’s shocking rejection of BC Hydro energy plan.”

“Because the commission second-guessed Hydro on the energy rating of Burrard Thermal and rejected Hydro’s conservation plans, they then concluded that the case to justify the 3,000 gigawatt-hour-per-year Clean Energy Call had not been met,” BCSEA Vice President Tom Hackney said. “This introduces uncertainty into the industry.”

British Columbia’s energy minister took exception to the ruling by the independent regulator, and ratified government support for renewable energy.

“The B.C. government has no plans to increase the use of Burrard Thermal as a result of this decision or for any other reason,” Minister Blair Lekstrom said. “We have stated clearly in the provincial Energy Plan that we support BC Hydro’s plan to replace the firm energy supply from the Burrard Thermal plant with clean, renewable energy.”

BCUC approves Standing Offer contract to 2.8-MW Cypress Creek

The BCUC has approved a BC Hydro power purchase contract, under its earlier Standing Offer Program, with the 2.8-MW Cypress Creek hydroelectric project on British Columbia’s Vancouver Island. (HydroWorld 8/4/08) Developer Synex Energy Resources Ltd. announced the approval Aug. 4, 2009.

Synex said Cypress Creek’s commercial operation date was July 31, 2009, making it the first applicant under BC Hydro’s Standing Offer Program to achieve commercial operation. BC Hydro formally launched the Standing Offer Program in April 2008, inviting clean or renewable power projects of up to 10 MW, including hydropower, to sell to BC Hydro at a fixed price with standard contract terms and conditions. (HydroWorld 6/9/08)

Funding approved to advance Site C, Mica expansion

BC Hydro did not respond to the independent energy aspect of the BCUC ruling, but did comment on the Peace River Site C and Mica portions.

“While the BCUC did not approve the plan it its entirety, it did approve C$631 million (US$589.5 million) out of C$633 million (US$591 million) in requested expenditures,” the utility said.

Funding included C$41 million (US$38.3 million) for Site C Stage 2 definition and consultation work in fiscal years 2009-2010. (HydroWorld 10/14/08) BC Hydro released a Stage 1 report on feasibility in December 2007 with an estimated capital cost of C$5 billion to C$6.6 billion (US$4.98 billion to US$6.57 billion).

BCUC also endorsed spending C$30 million (US$28 million) for definition phase work in fiscal 2009-2010 for the addition of generating Units 5 and 6 to the Mica project. BC Hydro took bids earlier this year for two vertical shaft Francis-type turbines, each with a minimum rated output of 520.3 MW. (HydroWorld 1/15/09)

The Mica powerhouse, 135 kilometers north of Revelstoke, was designed for six turbine-generators and now contains four. For more on the expansion, see Hydro Review March 2009.

Mitsubishi wins contract to supply Mica switchgear

BC Hydro has awarded a C$50 million (US$46.7 million) contract to Mitsubishi Electric Power Products Inc. to replace switchgear equipment at the 32-year-old Mica plant.

As a result of a two-year planning and tender review process, Mitsubishi is to design and manufacture 500-kilovolt switchgear and associated electrical equipment for beginning of on-site installation in 2010. Work is to be complete by 2013, BC Hydro said July 29, 2009.