A Pend d’Oreille River powerhouse will soon be fully owned by two Columbia Basin partners in a deal nearing $1 billion.
Fortis Inc. announced on Monday that by April, the company intends to sell its 51 per cent interest in the Waneta Expansion Hydroelectric Project to Columbia Power Corporation (CPC) and Columbia Basin Trust (Trust) for $991 million.
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FortisBC ratepayers may be wondering what this transaction will mean for their monthly electricity bill, if anything.
“Insofar as the sale is concerned, we have entered into a definitive agreement with Columbia Basin Trust and Columbia Power Corporation,” began Fortis spokesperson Karen McCarthy.
“We expect the deal to close within 90 days after customary approvals are received,” she continued. “After that time, the (Trust) and CPC will own 100 per cent of the Waneta Expansion facility. Our utility, FortisBC, will continue to operate and maintain the Waneta Expansion facility as we do today, and we will also purchase surplus capacity at the facility,” McCarthy told the Trail Times.
“Nothing will change for customers as a result of this transaction.”
The Trust and Columbia Power worked closely with the B.C. government to make this purchase possible, the Basin partnership jointly announced on Jan. 28.
“We are extremely pleased to be restoring ownership to the originally mandated 50/50 partnership,” said Johnny Strilaeff, Trust president and CEO (Chief Executive Officer), and Columbia Power’s acting president and CEO.
“Columbia Basin residents value the local ownership of all of our facilities and will enjoy even greater benefits now, and in the future,” he said. “As more of the revenues are injected back into this region and to the province.”
Columbia Power and the Trust currently own 32.5 per cent and 16.5 per cent of shares, respectively. The $900-million expansion began commercial operation in 2015 from a generating site located immediately downstream of the Waneta Dam.
The 335-MW facility provides enough energy to power 60,000 homes. It shares the existing hydraulic head and generates clean, renewable, cost effective power from water that would otherwise be spilled.
“This facility is an extraordinary asset that wouldn’t have been possible without Fortis coming on board as a partner in 2010 to help with its development,” Strilaeff added. “I want to thank Fortis for our strong and collaborative relationship and we look forward to continuing to work with FortisBC as the operator of the facility and the purchaser of the surplus capacity.”
Long-term agreements are in place with BC Hydro to purchase the energy and with FortisBC to operate the facility and purchase surplus capacity.
There will be no change to operations or to any key agreements, the Trust and Columbia Power stated.
“The sale of our interest in the Waneta Expansion helps finance the substantial growth occurring in our regulated utility business, including growth in British Columbia,” Barry Perry, Fortis president and CEO, said Monday.
“This transaction completes the asset sale funding component of our five-year capital investment plan.”
Waneta Expansion Development History:
• Pursuant to the Columbia Basin Accord (1995), Columbia Basin Trust was created as a partner with Columbia Power to undertake power project investments in the Columbia Basin region.
• Together, the organizations received $500 million to develop, as 50/50 partners, three hydroelectric power projects including Arrow Lakes Generating Station, Brilliant Expansion and Waneta Expansion.
• Columbia Power’s role was to develop, build and operate these projects on behalf of the partnership, with income distributed equally to both organizations.
• The Trust uses the income to support the efforts of Basin residents to create social, economic and environmental well-being. Columbia Power uses the income to repay its share of the original endowment funds, with a residual distributed to the Province as a dividend.
• With an expected cost of $900 million, Waneta Expansion would be the largest of the three mandated projects, larger than the two-previous combined. However, projected revenue from power sales did not support a viable business case.
• In 2010 a partnership agreement was reached with Fortis Inc. holding 51%, Columbia Power 32.5% and Columbia Basin Trust with 16.5%.
• Construction began in 2010 and the 335-MW facility entered commercial operation in 2015, six weeks ahead of schedule and on budget. Final acceptance was achieved in 2018.
• Columbia Power managed construction of the project on behalf of the owners. FortisBC manages operations and maintenance now that the project is operational.
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