By Andru McCracken
Columbia Basin Trust (CBT) and Columbia Power Corporation (CPC) have made an agreement to buy a massive hydroelectric facility located near Trail, B.C. for $991 million. Together the two already had a 49% stake in the facility which generates electricity on water that spills over Waneta Dam. When the 51% shareholder, Fortis Inc. expressed the desire to sell its part of the project share, the two organizations jumped at the opportunity to buy it.
Johnny Strilaeff, President and CEO, Columbia Basin Trust and Acting President and CEO, Columbia Power Corporation said that the purchase will be debt financed and begin paying a small dividend immediately.
“Right from day one we are taking on a very large loan and we are both [CBT and CPC] entitled to all the revenue,” he said.
Strilaeff said that the money to buy the facility will come from the province, who, with it’s triple A credit rating can borrow money at minimal cost.
“100% of the 991 million will be debt financed. We will borrow directly from the province the same way BC Hydro finances,” he said.
Strilaeff said having the opportunity to purchase the facility is a rare thing.
“People don’t sell them because they are so terrific. I remember where I was and what I was doing when I got the call,” said Strilaeff. “September 23, I was in Fernie, that’s when they told me they were intending to sell.”
Strilaeff said he was pleased with how everyone came together.
“The stars really did align to make this possible. I am feeling quite grateful,” he said.
But Strilaeff said this is really a generational opportunity, because most of the benefits will come to future generations.
“Our kids, grand kids, great grand kids and even [generations] after that will benefit from this,” he said. “It’s a really neat to be able to think about things in this way.”
Strilaeff said that even though climate change could have an impact on seasonal flows, the Waneta Expansion is a solid investment, because whether precipitation falls as rain or snow, it still passes through the facility.
“We feel very very confident this project can operate under different conditions,” he said.
The 335-MW facility was constructed with Fortis ahead of schedule and on budget, adding a second powerhouse immediately downstream of the Waneta Dam on the Pend d’Orieille River. It shares the existing hydraulic head and generates clean, renewable, cost effective power from water that would otherwise be spilled, and provides enough energy to power 60,000 homes.
“Congratulations to Columbia Basin Trust, Columbia Power Corporation and Fortis for reaching this milestone,” said Michelle Mungall, Minister of Energy, Mines and Petroleum Resources. “Thanks to your work the Waneta Expansion will provide real, lasting benefits for both the people of British Columbia and residents of the Columbia Basin.”
A press release from the Columbia Basin Trust stated that there will be no change to operations or any key agreements. Long-term agreements are in place with BC Hydro to purchase the energy and with FortisBC to operate the facility and purchase surplus capacity.
“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,” added Strilaeff. “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.”
Financial close is expected in April 2019.