VANCOUVER, B.C. – The B.C. Utilities Commission has approved BC Hydro’s application to purchase the two-thirds share of the Waneta Dam in southeastern B.C. that is currently owned by Teck Resources.
In 2010, BC Hydro purchased a one-third share of the Waneta Dam for $825 million. The dam, which is located near Trail, was originally built in 1954 by the Consolidated Mining and Smelting Company of Canada (now known as Teck Resources) to generate power for its smelter in Trail.
The dam’s four turbines generate a total of 490 megawatts and produce approximately 2,800-gigawatt hours of energy per year, which is roughly half the estimated electricity that will be produced by the Site C Dam.
Last August, BC Hydro announced that it would be applying to the BCUC to purchase the remaining two-thirds of the dam from Teck after it announced that it intended to sell its share of the power station to FortisBC. Under its Co-Ownership and Operating Agreement with Teck, BC Hydro had the right of first offer enabling it to match Fortis’ offer and purchase the two-thirds share of the Waneta Dam under the equivalent terms.
On July 18th, the BCUC approved BC Hydro’s application, saying it considered a number of factors in deciding to approve the transaction, including:
- that the impact on BC Hydro customers and other stakeholders is beneficial over the 40-year lifespan of the dam;
- that the purchase was consistent with the Utilities Commission Act and the Clean Energy Act; and
- that the expenditure was in the public interest.
As part of the transaction, BC Hydro assumes full ownership of the Waneta Dam but agrees to immediately lease the purchased two-thirds share back to Teck Resources for 20 – and possibly 30 – years in return for guaranteed lease payments.
BC Hydro’s intent to purchase the remaining two-thirds of the dam was absent from a report by Deloitte for the BCUC, which looked at alternatives to Site C during the BCUC’s review of that project last summer.
In the report, Deloitte also looked at various alternatives to Site C, including upgrading and retrofitting existing BC Hydro generating stations.
According to statistics from BC Hydro’s own data, performing upgrades on 24 of BC Hydro’s facilities would have added 1,123.2 megawatts of generating capacity, and would cost a total of $4.410 billion.