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Council approves loan for run-of-river project

Two councillors want certainty before any money is spent
Laura Walz

City of Powell River council voted to move forward with a proposed run-of-river hydroelectric project during a special council meeting on March 28.

A majority of councillors voted to enter into a partnering agreement with Powell River Power Development Corporation (PRPDC) to “study, investigate and possibly build a run-of-the-river hydroelectric generating facility on Freda Creek on behalf of the city.”

Council also voted to lend $140,000 to PRPDC, with four per cent interest calculated and compounded semi-annually, to be paid back in one lump sum within five years. The funds will come from general operating surplus.

The Freda Creek proposal is a joint project governed by the Tla’amin (Sliammon) First Nation and the city through the Freda Creek Community Hydro Partnership. The plan is to build a run-of-river facility on Freda Creek with the potential to generate 36 megawatts of electricity and sell the power to BC Hydro. The cost is estimated to be $100 to $110 million. The goal is to provide an alternate revenue source for the city and Tla’amin.

Councillor Russell Brewer voted in opposition to both motions and Councillor Maggie Hathaway opposed the loan authorization motion.

“My concern is we need a price paid by BC Hydro that would be comparable to past contracts, with a premium for winter supply,” Brewer said. “My concern is, everything that is going on with Hydro right now, without a guarantee that there is going to be another call...I’d love it if BC Hydro said we’ll buy your power, go do your feasibility study, we’ll buy it, here’s the price. But that’s the pinch point for me.”

Brewer also told the Peak he was concerned that the city may continue to incur costs without having that certainty. “I’m guessing lawyer costs must be in the neighbourhood of $50,000 to $60,000 now just for Freda Creek related billing,” he said.

Added to that is half of the costs, or $43,171.06 for work already completed or underway. That is also a concern, Brewer said, because the costs were incurred without approval from council.

Hathaway pointed out that the city didn’t know anything about a grant application until recently, when councillors were told Tla’amin needs to have matching funds for it. “I realize that was an error, somebody screwed up,” she said. She asked why the city couldn’t commit to its half of the outstanding debt, which would be about $40,000, then wait until “we can get some sort of confidence from BC Hydro that they’re actually going to commit to something. That only puts our taxpayers on the hook for $40,000.”

Councillors Chris McNaughton, Debbie Dee, Myrna Leishman and Jim Palm all spoke in favour of the project.

Mayor Dave Formosa said it will be “tools down” on the project until after the May 14 provincial election. “Until we get a pretty good signal that we’ve got almost like a direct award, I don’t want to spend a whole bunch more money here,” he said. “But what I don’t want to do is jeopardize the investment we already have.”

He’s hopeful that the city ends up with a community power system that brings $5 to $10 million a year into the community for the next 50 years, Formosa said. “I know it’s scary, I know it’s risk, I know we’re government and not a private business. I get all that, I really do. But we need to get our own source revenue going.”

Formosa allowed George Orchiston, a Powell River resident, to be added to the agenda as a delegation. He raised two issues, the lack of public consultation and if electoral approval was needed for the loan to PRPDC.

The meeting was recessed and reconvened half an hour later with Lindsay Parcells, an associate with Lidstone and Company, participating over the phone. He advised council that since the loan is to be paid back within five years, there was no requirement for electoral approval. If the loan had been for a longer period of time, there would be a requirement for electoral approval.

Parcells pointed out there was nothing in the partnering agreement that obligates the city to provide any financial assistance to the corporation for the project. “Because of that, there’s no need for electoral approval,” he said.