ATCO Power and PanCanadian remain ready to build a power plant at Port Alberni

February 18, 2000

ATCO Power and PanCanadian Petroleum, the developers of a 240 MW power plant in Port Alberni, British Columbia, expressed shock and disappointment in response to BC Hydro's announcement that it has unilaterally ended negotiations to develop the project.

After successfully bidding the project and several years of protracted commercial negotiations with BC Hydro, ATCO Power and PanCanadian have spent over $4 million and committed significant effort to bring this project to successful conclusion for the people of Vancouver Island.

Commitment to commence the project was delayed by the uncertainty surrounding the second natural gas pipeline to the Island. During the negotiation period, costs increased due to strong demand for power generating equipment in the United States.

In 1997, the BC Government directed BC Hydro to negotiate a Power Purchase Agreement with ATCO and PanCanadian based on the agreement reached with the Island Cogeneration Project. BC Hydro refused to offer similar terms to the Port Alberni Project. ATCO and PanCanadian did offer an equity position to BC Hydro and to proceed on the cogeneration project at a discount to the Island Cogeneration Project.

ATCO Power and PanCanadian have already negotiated a site agreement with Pacifica Papers for a cogeneration project at their paper mill in Port Alberni. The partners have also received environmental permitting, community support, and labor support in Port Alberni. The project provides jobs at the Pacifica mill, the only cogeneration site in Port Alberni, and assists in the stabilization of electric power on Vancouver Island. Cogeneration is one of lowest-cost forms of electricity generation and is also the most environmentally sound method of power generation.

ATCO Power and PanCanadian remain ready to construct the project under the most competitive current terms.

Implementation of the project developed by ATCO and Pan Canadian has the greatest potential to deliver economical power in the time frame in which power is needed on the Island.

Introducing a new bidding process will only result in further delays and added costs to the consumers and taxpayers of British Columbia.

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