Island Generation is a 275 MW natural gas-fired combined-cycle power generation facility that sits next to the former Catalyst mill site at Elk Falls in Campbell River.
It’s owned by Capital Power in Edmonton. BC Hydro used to buy power to sell to the mill next door but since the mill closed in 2006 the power from the plant has been used as an emergency backup by BC Hydro.
“What’s happened over time is it’s become a backup for the various facilities on Vancouver Island but also for the undersea cables coming from the mainland providing reliability to the Island,” said Capital Power President & CEO Brian Vaasjo.
BC Hydro generally uses the power from during transmission outages or in times of high domestic load like during cold snaps or heat waves.
It’s been in use since July because BC Hydro has had issues with an undersea transmission line from the mainland due to the late June heatwave.
However, it is not used all the time and there can be long durations when it’s not in use at all and BC Hydro appears to be rethinking the need for it. In a draft Integrated Resource Plan, or IRP, BC Hydro has indicated it might not re-contract the facility when the current contract expires in April 2022.
“We have to look into what’s in the best interest of ratepayers whether they live in Campbell River or whether they live in Cache Creek making sure we can keep rates among the lowest in North American and we’ll look at all of our resources, all of our assets to make sure they’re utilized in the best way possible,” said BC Hydro Spokesperson Ted Olynyk.
Vaasjo says Island Generation receives about $35-million but that it could be less under a new contract and that it is an important resource for BC Hydro and people on Vancouver Island.
“If you didn’t have us operating that would be in the order of 13 per cent to 14 per cent of the energy on the island wouldn’t be available in a time of need so you would have businesses for an extended period of time without energy,” said Vaasjo.
He says Campbell River would suffer the consequences if the contract which expires in April 22 is not renewed because the power plant is worth $1.5 million in industrial taxes to the City.
“Island Generation is the largest generator on Vancouver Island at 275 MW. If it is not re-contracted, this will reduce generation capacity on Vancouver Island by roughly 34% and increase the dependence of Vancouver Island on the subsea transmission interconnections from the Mainland,” said Vaasjo when he addressed Campbell River City Council Monday evening.
He is also concerned about the length of time it might take BC Hydro to make a decision and that it could go well beyond the expiry date of the current contract.
“In terms of timing, BC Hydro has set out a schedule where it intends to file a Final IRP by the end of this year with the BC Utilities Commission. The BCUC would then establish a formal process to review the Plan before making its final decision. This process would extend
well into 2022. The last IRP process was approximately a year and a half while our contract runs out in eight months,” he said.