Vancouver Island gas pipeline bid rejected by utilities panel

Gary Park

Petroleum News Calgary correspondent

The British Columbia Utilities Commission has tossed a wrench into plans for an undersea natural gas pipeline from Washington state to Vancouver Island.

The regulator has rejected a bid by government-owned B.C. Hydro & Power Authority to build a C$370 million gas-fired power plant to serve the electricity needs of the island.

B.C. Hydro is an equal partner with Williams Gas Pipelines in the planned C$340 million gas pipeline, which was expected to start delivering 100 million cubic feet per day by fall 2005 for use by power generating stations. But a spokesman for the utilities commission said B.C. Hydro’s bid to build the power plant was rejected because it had failed to demonstrate that natural gas was a cost-effective means of responding to island needs.

A number of potential private users of the gas-generated power, including pulp and paper producer NorskeCanada, had earlier told British Columbia regulators that they could provide the 362-megawatts of electricity more cheaply through a combination of energy savings and co-generation at their own plants.

B.C. Hydro, which has already invested C$100 million in the venture, said it needs more time to study the 88-page decision.