CONTRIBUTION · 23rd February 2010
The Council for the District of Stewart gave 1st and 2nd reading to the Long Lake Hydro Revitalization Tax Exemption Bylaw at its regular meeting on February 22, 2010.
Regional Power Inc is developing a proposed hydro electrical project to supply BC Hydro with electricity as part of BC Hydro’s “Clean Power Call Proposal”. In preparing the project in 2004, Regional Power Inc submitted a copy of its Long Lake Hydro Project Development Plan to the District of Stewart and at the same time they submitted their proposal to Land and Water BC (as the Ministry was known at that time).
At that time the project proposed to rehabilitate the former “Big Missouri” power plant that supplied power to the Big Missouri mining operations near Hog Lake in the mountains above Stewart.
The former dam and power station at Long Lake was constructed in the 1930’s and was in operation for approximately 45 years before being decommissioned in the 1980’s. The facility was then the focus of a project by Westmin Canada Ltd. which intended to provide power to both the Premier Gold mine and to the District of Stewart, which was being supplied electricity through diesel generation.
The current project initially proposed to generate 16 MW using a flow from the reservoir of 2.83 cubic metres/second of water. From the intake, the project proposed to channel the water through a 7.15 km long penstock (pipe) to the power house. The majority of the proposed penstock remains from the former power plan.
Since then the project has been revised, proposing to now generate 28 MW of electricity with an increased flow from the reservoir. Regional Power would construct a new 138 kV transmission line that would tie into the BC Hydro line near the Dunwell Site, just north of Stewart on Highway 37A.
The District of Stewart negotiations with Regional Power have resulted in a 10 year agreement which may provide the District of Stewart with an annual tax revenue from the project of $400,000.00 per year with annual cost of living increases. In addition, Regional Power, through a subsidiary company, has agreed to make an investment in the repairs of the community’s Arrow Dock facility – between $100,000 and $250,00 to improve the dock or in the event the facility cannot be adequately repaired then a cash contribution of $188,000.
Under the terms of the Letter of Understanding, Regional Power would also work with the District of Stewart to explore back-up power opportunities – either through the “islanding” concept with BC Hydro or through back up or alternative municipal generation.
These benefits to the District of Stewart are dependent on the Long Lake Hydro project being successful in terms of the BC Hydro Clean Power call in its proposal to sell electricity to BC Hydro.
Should Regional Power be successful in its proposal, then the project will benefit the District of Stewart with new annual revenues along with improvements in the Arrow Dock facility. There will be increased economic activity and opportunities for local business to provide goods and services to the project. It is also intended that there will be some employment opportunities for residents of Stewart.
As you say.
Comment by Helmut Giesbrecht on 1st March 2010
The 47 IPPs approved under the NDP included things like power generation at landfills, cogen plants etc. all for specific purposes and needs and the list even includes Alcan. Nothing in 30 years then? If you say so. The difference is that we still had BC Hydro's Powerex corporation which bought the power low and sold it high to California for one and profits went to the people. You can go through each one of the 47 and you won't find any that BC Hydro would pay the inflated rate to. The game has changed under this government.
When politicians direct what BC Hydro must pay after they have promoted IPP's as the new direction and the market alone determines what BC Hydro must sell power for, the public gets screwed.
So long. Next time tell us who you are. It could be more interesting.
30 years of nothing
Comment by Shawn Ksisiiaks on 28th February 2010
So I’m confused you have the faith in BC hydro to develop Projects, but not the faith in them to negotiate power sales contracts (as the article so clearly points out). You have the faith in them but not their BOD? History has shown regardless of the government of the day they saw the value in Independent Power. Or are you tell me the NDP of the 90’s made a mistake?
And the BCUC – Google their board members and see where their interests lie. Fact is their decision was self serving. Continue to operate burrard thermal and buy dirty power from Alberta. This is our message and legacy for future generations?
47 IPP projects were approved during NDPs time in office. Ippbc.com has a list but only provides the start-up date. The 47 was taken from this site as well as most of the information I have presented.
Not developing a project in 30 years, kinda implies things weren’t working out. They are not broken you say – just their BOD under the current government – and their last – by yet I supposed to believe the appointed BCUC? You see the fallacy?
If IPPs weren’t such a risk then why the low success rate? 50 plus permits. Look at the current regulations to earn a drivers license just for one and multiple the effort by 50. A guaranteed buyer you say? - last I looked hydro was looking for 3,000 GW and got 14,000 worth of proposals – there is no other market.
High taxes to pay off a hydro project related debt from the 1960’s vs low hydro rates – I fail to see the difference. The gold rush of IPPs, pipelines, mines, oil and gas, government stimulus money – which is their flavour of the day?
You view of wealth is unfortunate. My wealth is not in money but lies in my family, my kids, my friends, my life. These can’t be taken only created.
On that note – thanks Helmut, this has been a good debate.
Comment by Helmut Giesbrecht on 28th February 2010
How the article proves your point is beyond me. What it proves is that BC Hydro under the direction of the present government is setting the stage to justify and make profitable IPP’s at the expense of the public. Perhaps privatizing BC Hydro is next? Any other administration not obsessed with a free market economy at any cost would be letting BC Hydro develope the IPP’s. Perhaps you should check out the last ruling of the BCUC which was that what BC Hydro was willing to pay for IPP power was not a good deal for consumers. You might recall that the government overruled the BCUC proving my point. It isn’t BC Hydro that I don’t have faith in; it is the appointees of the government that sit on the Board of Directors to do the bidding of the government.
You obviously know my background, hence all you references to the NDP. We don’t know yours or even who you are and for all the reader can tell you might not be as unbiased as you pretend to be. That’s quite alright because as you say people should keep an open mind which means have all the facts so I will continue.
Perhaps you would be so kind as to list all the IPP’s that were approved under the NDP. We could then determine their effect on current policy or at least what the NDP’s plan was for the power and how much BC Hydro under the NDP was willing to pay for it and what it sold for and where?
You state “Past hydro projects were heavily subsidized by the public tax dollars and true costs hidden. This is why your rates are so low. We are still carrying debt from these projects.” Well if the rates are low, it is still a better deal. If it ain’t broke, why fix it. With BC Hydro there is no need to make massive and often obscene profits as the benefit of lower rates goes directly to the consumer, the BC Public which is where it should go. After all it is the people’s resource wealth. Why let somebody take it.
IPP’s are high risk? You really can’t be serious. There are a finite number of good locations, a guaranteed buyer and transmission system (BC Hydro); that’s why there have been a flood of applications. You say, “You can lose a license without compensation” which is really meaningless. Once the power generation is in place it is a whole different situation. Then it becomes expropriation and then the rules of Free Trade make any second thought prohibitive.
You can’t fault anyone for grabbing a share of the new “gold rush” they would be fools not to but all their profits are going to be taken from fools (think government) who let them do it when a better, cheaper option was available for the people. Wealth has nothing to do with what you value; it is what you take from others or from the earth.
Comment by Shawn Ksisiiaks on 28th February 2010
Interesting article you helped prove my point. Here we have BC Hydro, the company with such a great track record (in your words) paying more than market value for power. Does not make sense and it erodes a bit of faith in your BC Hydro doesn’t it. To my knowledge no contacts have been signed and this article is pure speculation. There is a lot of competition in the CPC bid and if BC Hydro is not going to take advantage of this by applying basic business principles (buy low sell high), then I’ll admit, we are in trouble.
Well I see by your last article we have come full circle so there is little point to continue. Below are a summary of my arguments so people can keep an open mind and look at the facts:
Past hydro projects were heavily subsidized by the public tax dollars and true costs hidden. This is why your rates are so low. We are still carrying debt from these projects.
BC hydro has not built and hydro project since the 70’s. It is ludicrous to think that if Hydro was developing these projects your price of electricity would remain at historical levels.
The CPC bid system allows BC hydro to select the best project with no risk or cost other than signing a contact. Government is notorious for selecting the lowest bid and the completion for this contract is huge.
IPPs are a high risk business venture with a less than 10% success rate. There are huge pre start-up cost with no guarantees. Through the CPC, hyrdro is displacing all risk to the private sector and pick and choose you they want to deal with.
IPPs are granted a license. The definition of a license is very clear. This is only one of the 50 other permits, approvals, tenures and licenses needed to start an IPP. You can lose a license without compensation.
IPPs were built in the 1990s under the NDP. Our hydro rates remained one of the lowest in the country.
BC Hydro is not interested in green, small to micro IPP such as Long Lake and I congratulate Stewart on reaching a profitable agreement with the developer.
On a final note, Wealth can be created, it really comes down to what you value.
How much is taken?
Comment by Helmut Giesbrecht on 27th February 2010
Check out this site and it is from the Vancouver Sun Dec. 4, 2009
"Hydro is in the process of firming up long-term contracts with IPPs to buy power at prices that average out, conservatively, to about $100 per megawatt hour.
Meanwhile documents recently filed to the utilities commission by Hydro suggest that the overnight purchase price for a megawatt of power at a primary trading hub in the western United States — Hydro's primary export power customer — is somewhere around $60.
That has more or less been the standard price for the last five years according to studies by U.S. federal electricity market regulators — although the overnight price in California was closer to $80.
Hydro projections indicate that spot market prices won't hit $100 until 2032.
Hydro's primary industrial customers, who account for about one third of the electricity consumed each year in B.C., calculates that this disparity could cost BC Hydro customers $300 million a year — or more — in what amounts to a subsidy to IPPs."
Now try to tell me that wealth isn't taken instead of created. And it is suppose to be a good deal for the public. It is certainly a good deal for somebody and and made so by a government that sells away our futures for peanuts.
Wealth is not created only taken.
Comment by Helmut Giesbrecht on 27th February 2010
Remember we were debating "whether wealth is created or taken." Your comment that "If a license is not renewed there is NO Compensation." is odd as there would not be a person in their right mind who give up on such a lucrative money making scheme. First nations given the option would be less than prudent not to avail themselves of the opportunity. That does not change the fact that their are a finite number of locations and sources for IPP's. Once sold off they are gone. If any government were to take them back, it would have to compensate. Compensation now has to include future revenue. Either way somebody pays or gives up something for someone's profit. Wealth is not created, only taken as an old Caribou resident often explains. "Resources unused are like money in the bank." Don't try to claim that wealth in the ground in the form of resources is worthless and more than money in the bank is worthless.
BC once enjoyed some of the lowest hydro rates in North America. IPP's could not have competed. That price has gone up in recent years and i submit that it is intentional to make IPP's more of an option. My original contention stands. BC Hydro is the agency that should be developing all electric power generation for the population. There is nothing that justifies letting private interests into the picture unless you are obsessed with archaic and discredited ideology. The public gets "taken" again.
It's just another example of "socialism for business and free enterprise for the people." People don't have a choice whether they need electricity or not these day. It should remain as a public utility. Period.
No your wrong
Comment by Shawn ksisiiaks on 27th February 2010
Do your research. IPPs are teaming up with First Nations as partners. Several of them contain causes that allow First Nations to purchase them after the license expires. You have the option to invest personally instead of relying on BC hydro doing it on your behalf. Developers want to work with communities; they want longevity built on reputation.
Just like any license when you do not live up to your end of the bargin – you lose it. If a license is not renewed there is NO Compensation. If you do not live up to your hydro commitments – you lose your contract . This is a reality with IPPs.
IPPs are no hotter than mines, pipelines or Walmarts. It’s irrelevant. And free trade? These companies are selling to directly to BChydro who markets the electricity. Most of them are small and I highly doubt the loss of a 28MW could not be made up elsewhere.
Our price for electricity is comparable to Ontario where 95% comes from IPPs. It is ludicrous to think that if Hydro was developing these projects your price of electricity would remain at pre 2005 levels. Look at competition on the CPC bid. It will take a pretty sharp pencil to earn a contract where the lowest price usually wins.
As I previously mentioned without independent producers, there would not be any projects north of 50th parallel.
Yes it is.
Comment by Helmut Giesbrecht on 26th February 2010
What's being taken is access to, and use of the resource by future generations. If you invest say 400 million and get a return of a few billion the difference is taken. Resource pimps get to use resources and charge inflated rates and BC Hydro (we) are forced to pay it. Why do you think this IPP is such a hot commodity these days?
Once a company has invested who is going to revoke the license? The compensation would be enormous and go far beyond just the cost of the investment. It would include future profits. The rules of Free Trade cut in.
By the way, who was in power when the hydro increases happened? Who introduced the carbon tax on hydro? If looking at site C cost money, it wasn't in the 90's
Nothing is being taken
Comment by Shawn ksisiiaks on 26th February 2010
Let look at the facts. IPP operate under a water licence. They never own the resource. License can be revoked and must be renewed. Re read the article, $400k/year plus investment into the local community is not chump change. This project would have been far too small to be on BCHydro’s radar.
It makes a huge difference what the NDP did. IPPs got permitted and built. Did you see a huge increase in your hydro bill. No tax dollars involved and no risk to government coffers or your wallet.
Let discuss Hydro’s track record. Has not built a dam since 1979, flooded huge expansions of land to do so with little concern to effects or accommodation, Meager Creek – failed. Site C – failed twice already. You tax dollars spent and not a shovel hit the ground.
My point is IPP are huge risk for developers. Most do not go. If hydro had to go through the same hoops IPPs do it would cost taxpayers more. When has the government done anything cheaper than the private sector. BC Hydro’s not interested in these small, green hydro projects displaced from the core urban area look at their track record, their interested lies in the Site Cs.
Comment by Helmut Giesbrecht on 26th February 2010
It makes absolutely no sense to pimp away our renewable resources forever to IPPs when we have a perfectly capable agency in BC Hydro. The return on the investment then goes to the people who own the resource in the first place. It makes no difference what the NDP did and site C did not come up in the 90's, so I'm not sure what you think that has to do with it.
It does make a difference that the present government increases taxation on Hydro just so the IPP's will be able to make profits. Even the BCUC ruled that the price BC Hydro would pay was too high but political inference overruled them.
Any suggestion that Hydro will cost us less through IPP's is pure myth. Of course there are investment costs. BC Hydro has a pretty good record and could very easily build smaller sources and market the power. The long term would be a benefit to all BC.
Bu we have become preoccupied with creating a free enterprise haven where anything is for sale and almost anything goes. "Wealth can not be created only taken" and I object when it's taken for future generations
Comment by Shawn Ksisiiaks on 26th February 2010
Question: how much long term debt did BC taxpayers take on constructing the dam of the 60s and 70s? How much of this money are we still paying off, not through our hydro rate, but taxes. You may be all star-spangled by our low hydro rates but reality is these projects were heavily subsidized by the public tax dollars.
IPPs have a low success rate less than 10%, so for every $1 they put in $0.90 of that flushed away. They must spend millions of dollars obtaining the 50 plus government permits, environmental and engineering studies, accommodating First Nations and stakeholders only to get a opportunity to bid on for a 40 year contact with BC Hydro. There are no commitments after 40 year. IPPs are a high risk, short term venture and this is reflected in price of electricity.
So Helmut how many hydro projects did the NDP permit and then construct in their 10 years? How many of these were independent power? $8 billion just for BC Hydro’s Site C and you don’t think our rates might go up?
I should have known...
Comment by Helmut Giesbrecht on 25th February 2010
...it was too complicated an issue for you. I rest my case. Naive? Nah.
Not complicated at all
Comment by Danny Nunes on 25th February 2010
Okay let me just get my "crash helmut" on.
expand on the question more and maybe I will answer it for you.
Cause according to you....
"At least with BC Hydro the profits would go to the citizens. But hey, leave it to the buccaneers." ·
Now why would the profits go to the Tampa Bay Buccaneers?
I didnt know NFL football teams were given independent power producer status.
Oh....were you reffering to pirates?
So anyone who isnt B.C Hydro...is a pirate
The question should be whom is the real pirate nowadays.
Come back soon Helmut.
Naive? Danny you are too kind.
Comment by Helmut Giesbrecht on 25th February 2010
Could you just address why BC Hydro is not the best agency to expand power production. Or is that too complicated?
We are naive punks Adam
Comment by Danny Nunes on 24th February 2010
Or at least we are according to one former MLA who shall remain nameless.
Yup, can't let BC Hydro do it.
Comment by Helmut Giesbrecht on 24th February 2010
You must have an IPP do it. That way the rates are higher as they need a profit margin. They were even to high for the BCUC. At least with BC Hydro the profits would go to the citizens. But hey, leave it to the buccaneers.
More good news...
Comment by Adam Kirkwood on 23rd February 2010
good news on top of good news from RTA... are we headed for a turn-around or am I just a naive young punk as some would lead you to believe?