A trio of P3 projects for northwestern BC
October 19, 2012
Alta Gas (ticker ALA on TSX) has one hydro project under construction and two others in the advanced planning stages, all in the same vicinity of northwestern BC.
All three projects are located near Bob Quinn Lake and will be connected via the new BC Hydro 287-kV Northwest Transmission Line from Terrace to Bob Quinn Lake. These are ‘run of the river’ projects that tap off part the the river’s natural flow in order to produce energy. These are P3 projects where the investor owned proponent builds the asset (undertakes the risk) and the government (BC Hydro) purchases the energy at an agreed rate.
- Located at the confluence of the lskut River and Forrest Kerr Creek, the 195-MW Forrest Kerr project has received a Provincial Environmental Assessment Certificate, a water licence and other permits and authorizations required to begin construction. Camp and related site infrastructure is complete. Construction is underway. The project has an estimated cost of $725 million, making it one of the largest infrastructure developments in northwestern B.C. At its peak, the project is expected to create 400 jobs. The expected completion date is 2014.
- The proposed McLymont Creek project, located on a tributary to the Iskut River, is expected to have a capacity of 55 to 70 MW. AltaGas has applied for a water licence and land tenure, and an investigative use permit is in effect. AltaGas is advancing the McLymont Creek project through the B.C. environmental assessment process with the goal of receiving an Environmental Assessment Certificate in 2012. The proposed project has a $217-million price tag. The three-year construction period will generate $20-million in provincial revenues and $40-million in federal revenues and provide the equivalent of 100 to 120 full-time and part-time jobs. Progress also continues with the McLymont Creek project. The access road has now been built up to the Iskut River. Construction work at the bridge site is now commencing as we prepare for the bridge to be launched across the Iskut River. Work on the Iskut Crossing will be ongoing through until October 2012. The Tahltan Nation participated in the environmental assessment and the proponent continues to directly consult and involve the Tahltan Nation in the project. The Province is satisfied that the Crown’s duties to consult and accommodate First Nations’ interests have been discharged as they relate to the decision to grant the EA Certificate.
- The proposed Volcano Creek project, located on a tributary to the Iskut River, is expected to have a capacity of 15 to 18 MW. AltaGas has applied for a water licence and land tenure, and an investigative use permit is in effect. The Volcano Creek project will follow the Clean Energy Projects Development Plan process administered by the Ministry of Natural Resource Operations. The Development Plan Application for Volcano Creek was submitted at the end of May 2012 and is under review by the BC government.
Alta Gas has built some positive relationships with the Tahltan First Nation, BC Hydro and the BC government to earn a social license for these projects so far.
Financially, having an investor owned entity invest the $ 1 billion in these three projects saves the capital borrowing capacity for BC Hydro. Whether it is a good deal or not for the province remains to be seen as we do not know the terms of the P3 agreement. Economically, the capital investments will be a major shot in the arm for northwestern BC and will facilitate even more development activities.
- a)http://www.altagas.ca/sites/default/files/BC%20Assets.ver_.14.0.pdf and http://www.altagas.ca/sites/default/files/FK.Sept%202012.v1_0.pdf