Incinerator power deal gets B.C.U.C. go ahead

Burnaby incinerator gets $43 per megawatt-hour despite argument from opponents.

  • Aug. 5, 2014 7:00 p.m.

Surrey North Delta Leader

Regulators have approved an electricity purchase agreement that will see BC Hydro pay $43 per megawatt-hour for power from Metro’s existing garbage incinerator in Burnaby.

Critics had argued Metro’s garbage-fueled electricity can’t count as clean and renewable under provincial law and therefore should be worth much less – closer to the $24 spot price for power exported to the U.S.

The aim of incineration opponents was to blow a hole not just in the revenue from the existing plant but also in the business case for a future new waste-to-energy plant, which Metro Vancouver has assumed will earn around $100 per megawatt-hour.

But the utilities commission decided air pollution concerns raised by the Fraser Valley Regional District were “not relevant” in okaying the contract renewal and made no finding on whether the incinerator counts clean, green power.

It concluded the negotiated price between BC Hydro and incinerator operator Covanta Energy appropriately reflects the cost of power generation plus a reasonable return.

The $24 spot market price wasn’t an appropriate comparison, the commission said, because it doesn’t apply to electricity that is firm (incinerator power is always on, unlike wind farms) or guaranteed in large volumes for many years.

BC Hydro said the $43 contract price is well below its long-term cost of building new generating capacity of $85 to $100 per megawatt-hour and still attractive compared to the $51 it would pay for non-clean natural gas-fired power.