Purchase of one-third of Waneta Dam good deal for ratepayers
Posted by Susan Danard
BC Hydro's purchase of one third of the Waneta dam and generating facility, near Trail, is a good deal for ratepayers. This publicly owned asset will provide clean, reliable electricity for generations to come at price that is very affordable.
The purchase from Teck Resources Ltd. will secure about 1,000 gigawatt hours of hydro-electric power per year for our customers — enough to supply 100,000 homes in B.C. annually for the life of the project at a cost of $64 per megawatt hour over the life of the dam. With proper maintenance, dams and generating stations can last for 100 years or more, so this purchase will ensure we have this low-cost energy at a price that will look exceptionally good in the years ahead.
The alternative would be to buy energy on the market and risk the price volatility associated with the marketplace. Energy prices are low right now because the market is depressed due to the slumping U.S. economy. Imagine what the spot market price might look like in five, 10 or 20 years?
Waneta will supply what we call "firm" energy. Firm means we will have this power available at any time whenever B.C. residents need it and that's the beauty of a hydro-electric dam. It's like having a battery that you can turn on and off as required. And if we own it, we control it.
We can count on all that high-quality firm energy and dependable capacity and put it into our planning stack — thus eliminating the need to buy other resources at a much higher cost. If BC Hydro waited until Teck offered us its surplus whenever it was available, we would not be able to rely on it as a firm resource.
In the past, Teck has sold the vast majority of its surplus power to the United States. Earlier this year, the company decided to sell some of its assets, and if BC Hydro did not purchase one third of the Waneta facility, there was a risk that Teck would have sold to another party that could have diverted all of the power to the United States.
We'd like to see that power remain available in British Columbia — to power B.C. homes and businesses and to help keep our province strong. The purchase is currently before the British Columbia Utilities Commission — the third-party body that regulates utilities in B.C. — for confirmation that the acquisition is in the ratepayers' interest.