From Omineca Express

Using reasons argued by NDP MLAs John Horgan and Robin Austin, the B.C. Utilities Commission quashed a sweetheart deal between Alcan and BC Hydro. The power sales agreement would have seen Alcan earn windfall profits of more than 1,400 per cent for power generated at its Kitimat facility.

"It costs Alcan about five bucks to generate a megawatt-hour of electricity," said Horgan, the NDP critic for Energy, Mines and Petroleum Resources. "This sweetheart deal, negotiated in secret, would have had Hydro paying over $71 for that same megawatt-hour."

In his submission to the BCUC, Horgan argued that the deal was bad for B.C. ratepayers - who would ultimately have to pay above-market prices for the electricity - and the price Hydro would be paying was not representative of the actual cost of producing the power. The BCUC agreed with the NDP position and that of other intervenors and quashed the deal.

"That premium price of $71 was set by the IPP contracts Hydro signed in the summer and was intended for new power producers," said Horgan. "That higher-than-market cost was to offset the capital costs of new power production facilities and encourage new facilities to come onstream.

"Alcan has been generating electricity at Kitimat for more than half a century. This deal has nothing to do with encouraging new production and everything to do with increasing windfall profits for a large corporation."

Horgan said the underlying issue is the use of public resources for private gain. The water resources Alcan uses to generate power belong to the people of British Columbia. British Columbians should be the ones who reap the benefits.

"In the original 1950 agreement, Alcan was granted preferential access and cheap water rates in exchange for creating jobs at its aluminium smelter in Kitimat," Horgan said. "Those low water rates were a tradeoff for industrial development and good, well-paying jobs for north-west B.C.

"The B.C. Liberals have refused to stand up for the spirit of that agreement, and have refused to ensure all of British Columbia benefits from this public resource. The Liberal energy plan is all about profit for private interests when it should be about public power for public benefit."

Alcan has had a rocky history in B.C. since the Kemano Completion Project, a major expansion of its generation capacity on the Nechako River, was cancelled in 1995. Kitimat Mayor Richard Wozney told the commission Alcan had historically restricted its power sales to what was surplus to its aluminum production needs, but that changed in 2000.

"There was a water shortage in the Nechako Reservoir in 2000 which reduced the amount of power that could be produced at Kemano," Wozney said. "There was enough power to continue to operate the smelter at full capacity, but Alcan elected to reduce smelter operations so that it could sell power to B.C. Hydro."