by Laura Walz
[email protected]
VIDEO Local government officials and community members learned more about the proposed Freda Creek run-of-river project at an open meeting held on Wednesday, October 31.
The meeting was designed to provide information to Powell River Regional District board and Tla’amin (Sliammon) First Nation band council members. City of Powell River Mayor Dave Formosa and Chief Clint Williams welcomed 17 representatives around the table and approximately 30 members of the public.
The Freda Creek project, proposed by Tla’amin and the city through the Freda Creek Community Hydro Partnership, has the potential to generate 36 megawatts of electricity annually, which would be sold to BC Hydro.
The project is estimated to cost between $100 to $110 million. Components include an intake below Phelan Lake, a seven-kilometre penstock directing water to a powerhouse near the mouth of the creek at Lois Lake and a 24-kilometre transmission line along the west side of Lois Lake to the sub-station at Saltery Bay.
The project’s goal is to provide an alternate revenue source for the city and Tla’amin, as well as to create jobs and training opportunities.
Chris Henderson, project advisor, is president of Lumos Energy and Canada’s preeminent aboriginal clean energy advisor. He outlined the project, emphasizing that it involves a step-by-step process. “No final decisions have been made and we’re a long way from making any final decisions,” he said.
The project was originally identified by Knight Piesold, an engineering and hydrology consulting firm, which approached Plutonic Power Corporation. Plutonic acquired the water and Crown land permits that gave it development rights. Those permits are now held by Tees K’Wat Landholdings, a Tla’amin company, on behalf of the Freda partnership. Plutonic merged with Magma Energy Corporation last year to form Alterra Power Corporation.
Knight Piesold has completed a pre-feasibility study, which was funded by Tla’amin through federal government grants. The study concluded that the project has sufficient power capacity to be economically viable, on the assumption that the power price, with a premium for winter power supply, paid by BC Hydro is comparable to past contracts, that financing costs remain relatively low and that interconnection costs are not prohibitive.
Henderson described the project as a pure run-of-river proposal, with no dam or reservoir. Power will only be generated about 40 per cent of the year, he explained, when there is enough water to maintain the ecological integrity of Freda Creek. The reason why 40 per cent capacity is viable is because BC needs power in the winter, he said. “You’ll only generate power when it’s available and we’ve been very careful in the pre-feasibility study to know when that is,” he said.
The next stage is to conduct a detailed feasibility study, which would include an environmental impact assessment. This phase will cost about $2.8 million and will take two to three years.
Henderson said grant funding is being sought for this work, however grants will not cover all of the feasibility study costs. The partners will need to make some financial contributions.
City and Tla’amin officials, as well as Henderson, have had discussions with provincial government representatives and BC Hydro about how the proposal is a community hydro project and the proponents shouldn’t have to compete with private businesses. “What we’re saying is that we should be getting some kind of preferential position because it’s community owned, aboriginal and city, because it’s winter power to feed the Lower Mainland and because it has a low environmental impact,” said Henderson. “But we don’t know that yet. We wouldn’t spend big money to do the environmental impact until we know if the project is in the right economic zone, is it workable, and is the chance of an electricity purchase contract good.”
As for project financing, usually 80 to 90 per cent of total costs are funded by a lender through senior debt, Henderson said. “It’s typically insurance companies, like Sun Life and Manulife, who lend money for a long period of time, anywhere from 15 to 25 years.”
If 80 per cent of the project was financed by senior debt, the partners would have to come up with the remaining 20 per cent, or $10 million each. Henderson said they would probably borrow that money, for example through the Municipal Finance Authority, which has competitive rates, and through opportunities available to aboriginal communities. The community wouldn’t have to wait 20 years before money came back to it, he explained. “We would structure this so that financially money would flow from the project starting in year one and would grow gradually as you pay back the debt,” he said.
Colin Palmer, regional board chair and Electoral Area C director, outlined some concerns, which focus on fish in the creek and the impact of the transmission line, especially on Western Forest Products.
Palmer said Western is a major employer and it is having difficulty accessing timber in the Powell Daniels area because the transmission line built by Plutonic for its Toba-Montrose project can’t be crossed by a helicopter and equipment can’t go under it. Palmer said the company is “getting sick and tired of people taking their timber away from them for various reasons and compromising their timber.”
The former plan for the project had the transmission line going down the west side of Lois Lake into a residential neighbourhood on Dixon Road, Palmer said. “When I’m looking here at a 24-kilometre transmission line, I’m getting a little bit concerned. I just want to put it on the record now, that there’s going to be a lot of flak for me, therefore there will be a lot of flak for you, from the public about that transmission line going down the west side of Lois Lake.”
Palmer also pointed out that the regional district has no decision powers, but the provincial government will refer the project to it for comments and recommendations. “When someone says we’re opposed, it doesn’t mean we’re in charge,” he said.
Henderson said Palmer’s comments were all fair points and would be part of the planning process.
Williams agreed they were valid points. He also pointed out that Tla’amin receives notice of where and when Western is working and has a good idea of its future plans. “There is a line of communication open there already,” he said.
However, Williams also made the point that Tla’amin hoped the project would create jobs and training opportunities for the community’s youth and not one person from the community worked for Western.
