BC Hydro and Power Authority stands behind its load forecast for the massive Site C hydro development in northeastern British Columbia even though several large LNG projects that would have upped demand have been shelved.
The province-owned electricity utility said in an Oct. 3 submission to the British Columbia Utilities Commission, or BCUC, that Fortis Inc.'s expansion of its Tilbury plant near Vancouver, Woodfibre LNG Ltd.'s project on a fjord on the province's southern coast and the LNG Canada proposal near the northern port of Kitimat would add incremental demand to the province's power grid. The company was responding to questions raised by the BCUC in its preliminary report into the need for Site C.
"It is appropriate to continue to include LNG Canada, Woodfibre LNG and FortisBC Tilbury Phase 2 in the current load forecast for both macroeconomic reasons, which equally apply to all three projects, and project-specific reasons," according to BC Hydro's submission. "BC Hydro believes the market's view, on balance, remains largely unchanged from when the current load forecast was developed. While there remains significant uncertainty, global LNG demand will continue to grow and there is opportunity for B.C. LNG."
The BCUC has been asked to reassess the need for the C$8.34 billion Site C project, which is under construction on the Peace River. The previously approved project was cast into doubt with the election of a new provincial government formed through the alliance of the New Democratic Party and the Green Party, both of which had raised issues with the need for the project and its environmental impacts. The BCUC's preliminary report said it would cost about C$3.2 billion to abandon Site C.
While more than a dozen LNG plants were once planned for British Columbia, none of the larger facilities have made the decision to proceed amid a plunge in world prices for the commodity. The PETRONAS-led Pacific NorthWest LNG Ltd. project has been shelved, along with the Aurora LNG terminal that was planned by the Canadian unit of China National Offshore Oil Corp. (CNOOC). LNG Canada, led by Royal Dutch Shell plc, is one of the last large projects still under consideration, while Tilbury and Woodfibre are relatively small projects. BC Hydro said all three of the remaining LNG proponents have asked for power.
"One major justification for including the three LNG projects in the current load forecast is the fact they are requesting electricity service," the submission said. "Service requests from industrial sector customers, including LNG, are generally included in our industrial load forecast."
LNG Canada signed interconnection and supply agreements in 2014, BC Hydro said. Woodfibre requested electricity service in 2013 and has "since been working with BC Hydro to define its requirements." Fortis is commissioning Phase 1 of its Tilbury expansion and is seeking customers to underpin further expansions. BC Hydro completed a system impact study for the second and third phases of Tilbury in 2015, the filing said.
"Apart from ongoing work each of the project proponents have been doing with BC Hydro, there have been recent public statements which demonstrate the proponents' continued expectations that their projects will proceed," BC Hydro's submission said. "Each of these projects has also achieved significant regulatory and other project development milestones."
The BCUC is expected to submit its final report on Site C to the provincial government Nov. 1.