Business

Work underway on massive hydroelectric project

ONE OF the largest construction camps to be built in the northwest in years is now open to house the workforce needed for a $700 million run-of-river hydro project on the Iskut River north of here.

AltaGas, a Calgary-based energy company, is building the Forrest Kerr project, rated at 195 megawatts of power, to feed into the Northwest Transmission Line and so provide access to the main provincial BC Hydro grid.

The power is being sold to BC Hydro thanks to a 60-year deal signed by the Alberta company and the provincial crown corporation last spring.

Unlike the classic BC Hydro projects that involved damming rivers and creating reservoirs, a run-of-river project diverts water via a tunnel or pipeline through generators and then back into the river.

There are now approximately 50 workers at the campsite and the number will hit 400 at the peak of construction in mid-2013, indicates information provided by the company.

Work has already started on a 3km tunnel through which water will be fed to nine generators.

The project should be finished in mid-2014, well within the timeline for the finish of the Northwest Transmission Line, which in itself is to cost an estimated $404 million.

AltaGas official Federico Velasquez, in a briefing given to Kitimat-Stikine regional district officials March 25, described Forrest Kerr as the “largest size run-of-river hydro facility in North America.”

Two smaller potential run-of-river projects nearby, which are now going through the provincial environmental approval process, will further beef up the company’s power generation, he said.

McLymont Creek, which also features a tunnel, is rated at 50-70 megawatts and Volcano Creek at 15-18 megawatts.

“Bottom line, if these projects were to be approved, we would be looking at $1 billion [in spending],” Velasquez told regional district directors.

Provided good timing and permitting, he said AltaGas has pencilled in 2016 as finishing dates for McLymont and Volcano.

So far, the company has spent approximately $26 million associated with Forrest Kerr construction and approximately 80 per cent of that is with local contractors or contractors that have joint ventures or labour agreements with First Nations entities.

AltaGas last year signed an impact benefits agreement with the Tahltan Central Council providing a list of economic benefits up to and including jobs, employment training, scholarships and contracts tied to construction.

“While there is no provision for specific targets for local hire, our goal is to access as much local labour as possible,” indicates the company.

“During construction, the need for labour and demand for goods and services is expected to provide significant positive economic stimulus.”

The company expects approximately 95 per cent of the project and material to come locally and within Canada.

Contracts are already in place for engineering, turbine and generator equipment, surge and access tunneling, catering, bridgework and road and infrastructure support work.

The capital cost of approximately $700 million for Forrest Kerr makes it the largest AltaGas project in Canada in terms of power generated, cost and complexity.

Formed in 1994, AltaGas now trades on the Toronto Stock Exchange. It has 900 employees and an asset base of $2.6 billion in gathering, processing and pumping natural gas across the country.

Forrest Kerr continues a plan to move into renewable energy production through long-term contracts which, indicates its website, provide stable cash flow.

AltaGas has wind projects in California, Nevada, New Mexico, Colorado and North Dakota.

Its last significant project in B.C. was the 102 megawatt Bear Mountain Wind Park, located near Dawson Creek, which was connected to the provincial power grid in October 2009.

Forrest Kerr’s cost includes $22 million for a 37 kilometre power line to connect to a substation at Bob Quinn on Hwy37 North where the Northwest Transmission Line will end.

AltaGas is also paying $90 million directly into the cost of the Northwest Transmission Line. It’s adding in another $90 million over 20 years following the completion of the transmission line for a total power line expenditure of $180 million.

 

AltaGas is the third owner of the project, buying it from NovaGold, the company which has half ownership of the Galore Creek copper and gold property located in the same area. NovaGold, in turn, purchased the property from Coast Mountain Hydro.

 

 

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