Press Release

Total private sector contribution will meet or exceed goal of 1600 GW.h/year

PROVINCE-WIDE – BC Hydro has announced the successful bidders and their projects for its 2002 Customer-Based Generation (CBG) procurement program. When these projects achieve commercial operation – by September 30, 2006 – they will provide a total of approximately 500 gigawatt-hours (GW.h) per year of new electricity to Hydro’s system.

"Once again, the private sector has shown that it will be able to help meet our customers’ growing needs through competitively priced electricity," says Bev Van Ruyven, BC Hydro’s Senior Vice-President, Distribution. "Through the CBG program, customers with successful projects will acquire an incremental revenue stream while making use of existing infrastructure to generate electricity. Hydro benefits by acquiring that electricity on a least-cost basis and in accordance with our 5.5 cents per kilowatt-hour long-run marginal cost for electricity."

The 2002 CBG program was launched with a Request for Qualifications on May 31, 2002. Project submissions were evaluated against publicly disclosed mandatory requirements, and pre-qualified projects were then invited to tender bids in a competitive Call for Tenders process. Bids were adjusted, for comparison purposes, to reflect several factors, including location, emissions and transmission impacts. The adjusted bids for the successful projects did not exceed 5.5 cents per kWh – Hydro’s long-run marginal cost for electricity.

All 22 of the projects that were originally shortlisted as part of the CBG program were invited to submit final bids. Of that total, seven chose to do so, with the others deciding on their own not to participate further. Of the seven that did submit bids, five were successful.

Van Ruyven added that while the original target for the CBG program was 800 GW.h/year, the overwhelming response to the current Green Power Generation (GPG) call means that the CBG shortfall can be more than made up for by energy acquired from independent power producers (IPPs) participating in the GPG call.

"Our private sector resource acquisition process is designed to provide flexibility when it comes to how we meet our targets," she said. "It allows us to increase the 800 GW.h "cap" from the Green IPP call to accommodate even more of those projects. Together, CBG and Green IPPs will provide the 1600 GW.h/year we are targeting from the private sector, and perhaps even more. We may increase the cap further depending on the final number of approved projects and our customers’ energy needs."

The successful projects represent three energy resources: wood residue, hydro and municipal solid waste. The projects will be developed by the bidders – either industrial customers or independent power producers associated with customers – on or near the customers’ sites.

Contact:

BC Hydro Media Relations

Media Relations manager

Phone: 604 623-4022

BC Hydro’s Customer-based Generation Program

• BC Hydro’s 2002 CBG program applies to new generation on or adjacent to the site of an existing BC Hydro customer. The new generation must be closely associated with the customer through ownership, steam sales, fuel supply or other means. The proposed project can be developed by the customer, or by an independent power producer associated with the customer.
• Thirty-eight project submissions were received in response to the 2002 CBG Request for Qualifications which launched the program on May 30, 2002.
• Submissions were then evaluated for development status, customer eligibility and project eligibility. Projects are required to be on-line by September 30, 2006.
• Proponents of the 22 successful (pre-qualified) project proposals were then invited to tender a bid in the CBG Call for Tenders. Of that total, seven chose to do so, with the others deciding on their own not to participate further. Submissions were reviewed to ensure the tenders met the mandatory requirements and that there were no material changes from the original submission. Bids were then adjusted, for comparison purposes only, to reflect several factors including location, emissions and transmission impacts. Of the seven projects for which bids were submitted, five were successful.
• The adjusted bids for the successful projects that will be offered a long-term (10- to 20-year) electricity purchase agreement by BC Hydro did not exceed 5.5 cents per kW.h – Hydro’s long-run marginal cost for electricity. The price paid in the EPA will be the original (unadjusted) bid price.

The names, locations, proponents and outputs for successful projects are below.

BC Hydro Customer-Based Generation Program Successful Projects

Project Name	Bidder	Location	Resource	GW.h/year
Armstrong Wood Waste Cogeneration Plant	RFP Power Ltd.	Armstrong	Wood Residue	122.6
Eurocan Power Project	West Fraser Mills Ltd.	Kitimat	Wood Residue	160.0
Lois Unit 1 Upgrade	Powell River Energy Inc.	Powell River	Hydro	10.4
Long Lake Project	Premier Power Corp.	Stewart	Hydro	83.2
SEEGEN Project	Montenay Inc.	Burnaby	Municipal Solid Waste	125.0