Premier Christy Clark bullish on IPP projects amid bureaucratic shake-up
A bureaucratic shake-up of the way private B.C. waterpower applications are administered by the province will bring proposed independent power producers to the fore in the coming weeks. The change is designed to ensure proponents who’ve staked a claim on a particular river are actually moving forward with that application, including new requirements that proponents conduct ongoing development work, such as surveying, geotechnical studies, archaeological exploration and biological studies, for example.
Ministry of Forests, Lands and Natural Resource Operations spokesperson Thomas Winterhoff told the Times Review that the province switched over to a new “investigative licence” system in 2010, but older claims were grandfathered in. Now, they’re being required to comply with the more stringent new system. He said the system also seeks to balance IPP projects with other potential land uses so that water power applications, “are not used for the sole purpose of staking a claim or excluding other investment opportunities on Crown land.”
One new requirement is public advertising. Proponents in the Kootenay region (including Revelstoke) are now required to advertise their claims in local newspapers, bringing the proposed projects to public eye at an early stage. The advertisements draw public attention to the proposed projects, many of which have been filed away for years and years with little public knowledge.
Winterhoff said the new requirements are already shaking up the system. There are about 650 Land Act waterpower applications in the province, including about 60 applications in the Kootenay–Boundary region administered from a ministry office in Cranbrook. Provincially, an estimated 80 per cent of the pre-2010 applications are expected to receive an investigative licence. Another 15 per cent have been abandoned and another five per cent are expected to be disallowed by the government. In the Kootenay-Boundary region, seven applications have been withdrawn, while another three have been disallowed.
“Applications that are being disallowed typically have not submitted an investigative plan or the investigative plan has not included sufficient information to make a determination on the issuance of an investigative licence,” Winterhoff said in a statement. “The requirements for the investigative plan are outlined in the letter that the ministry sent to each proponent.”
The Integrated Land Management Bureau (ILMB) maintains an online database of land tenure applications, including applications for things like new floating docks, cell towers, power lines, gravel pits, heli-skiing tenures and so on. Typically, the database is lightly peppered with a few waterpower project applications a year. Over the past month, it’s been flooded with new projects, mostly from the Kootenay region. Speaking on background, a Ministry of Forests, Lands and Natural Resource Operations staff member explained that the Kootenay office is just ahead of other regional offices on the paperwork, and applications across the province will be listed on the ILMB website shortly.
David Keiss is the vice-president of project development with Syntaris Power, which has just issued several waterpower investigative licence applications for pre-2010 projects. They include several projects near Revelstoke first proposed in about 2008 by Atla Energy, which Syntaris recently acquired.
Keiss said he got relatively short notice about the changes and has been working to bring his projects into compliance.
“They’re trying to bring the process in alignment with other resource extraction processes and get all of the projects up and moving,” Keiss told the Times Review. “It was a straight up ‘either or’ questionnaire. Either you’re going to go forward with these types of investigations or you’re going to abandon the application.”
Keiss said he understood the province’s motivations. “They’re obviously trying to clear up the tire kickers and people that are hanging onto applications who really don’t have any intention of doing any further work,” he said.
At the local level, Keiss said the new requirements are good employment news for biologists, archaeologists, geotechnicians and other contractors involved in developing IPP applications. “All of these are good stimulus for the economy,” he said.
Meanwhile, the lynch pin for larger projects is attaining an ‘energy purchase agreement’ from BC Hydro. There is a standing offer for much smaller IPP projects under 15 megawatts, but only nine of those licences have been issued by BC Hydro to date.
BC Hydro community relations manager Jerry Muir explained that BC Hydro’s Integrated Resource Plan (IRP) 2012 (which is still in draft form) calls for the purchase of 2,000 gigawatt hours of electricity from clean energy producers, which includes private IPP waterpower projects.
If the IRP moves forward as is, it is anticipated that BC Hydro could issue another ‘Call For Power’ in late 2013. This process leads to bankable ‘Energy Purchase Agreements’ with BC Hydro, key to securing financing for the projects. Hydro is targeting a 2016–2018 timeframe to bring these projects online.
Critics, however, have questioned the economic viability of the IPP projects. They were spurred on in the just over five years ago when changes to provincial energy ‘self-sufficiency’ regulations under former premier Gordon Campbell created a climate favourable to the private projects. However, in an effort to spur natural gas development in the north, current B.C. premier Christy Clark revised those requirements in early 2012. The change prompted some IPP critics, such as the Wilderness Committee, to predict the demise of proposed IPP projects.
No so, says Clark. In a July 31 interview with the Times Review, the B.C. premier predicted an electricity-hungry B.C. gung ho on developing all kinds of generating capacity on top of the proposed Site C Dam on the Peace River.
Her vision is for five or “perhaps more” liquid natural gas (LNG) processing plants on the north coast. The plants use copious amounts of electricity to covert gaseous natural gas into a more compact liquid that can then be shipped to Asian customers. “They will be principally powered by renewables ... we are going to be creating a huge new demand for electricity. Site C, for example, – the entire power supply of Site C could be used by phase two of just one of the [LNG] projects,” Clark said.
“There’s going to be a huge new demand for renewable electricity, so that means that independent power producers are going to be busy around the province,” Clark added.
Much of the future of proposed regional IPP projects, however, lays beyond the 2013 provincial elections. Clark is trailing badly in the polls and faces vote-splitting from a resurgent BC Conservative Party. The BC NDP have been vocal critics of the way the current government has handled independent power projects – including criticism of the ‘staking’ process – and have vowed a shake-up of their own if elected.