Newfoundland and Labrador, August 26, 2010 — Fortis Inc., in partnership with Columbia Power Corp. and Columbia Basin Trust, will construct a 335-MW hydroelectric generating facility, at an estimated cost of $900 million.
The hydropower facility is sited near the Waneta Dam and powerhouse facilities on the Pend d'Oreille River, south of Trail, British Columbia. CPC/CBT are both wholly owned corporations of the government of British Columbia.
Subject to negotiation and completion of definitive agreements, Fortis will own 51 percent of the Waneta Expansion and will operate and maintain the non-regulated investment when the facility comes into service, which is expected in spring 2015. Federal and provincial environmental assessment approvals are in place for the project.
The Waneta Expansion will become part of the Canal Plant Agreement and will receive fixed energy and capacity entitlements based upon long-term average water flows, thereby significantly reducing hydrologic risk associated with the project.
The energy, about 630 GWh, (and associated capacity required to deliver such energy) for the Waneta Expansion will be sold to BC Hydro under a long-term power purchase agreement at prices comparable to those for projects recently accepted by BC Hydro under its 2008 Clean Power Call.
The surplus capacity, equal to 234 MW on an average annual basis, will, subject to approval of the British Columbia Utilities Commission, be sold to FortisBC Inc. under a long-term capacity purchase agreement at a price within the range of alternatives outlined in FortisBC's Resource Plan filed with the BCUC in May 2009.
The Waneta Expansion is expected to generate slightly better financial returns than regulated investments, commensurate with the higher risk associated with a non-regulated project.
Each partner will be responsible to fund its share of the construction of the project. Fortis expects to initially finance its share of costs through existing committed credit facilities, which will be permanently financed through a combination of equity and debt.
Fortis Inc. is the largest investor-owned distribution utility in Canada, with total assets exceeding $12 billion and fiscal 2009 revenues totaling $3.6 billion. The corporation serves about 2,100,000 gas and electricity customers. Its regulated holdings include electric distribution utilities in five Canadian provinces and three Caribbean countries and a natural gas utility in British Columbia.