Waneta Dam in Trail, B.C. — Photo courtesy BC Hydro Waneta Dam isn’t going anywhere, but its owners are. BC Hydro plans to purchase the remaining two
Waneta Dam in Trail, B.C. — Photo courtesy BC Hydro
Waneta Dam isn’t going anywhere, but its owners are. BC Hydro plans to purchase the remaining two-thirds ownership interest in the Waneta Dam and Generating Station in Trail, B.C. from Teck Resources Limited (Teck) for $1.2 billion. With this planned purchase, BC Hydro will have complete ownership of the dam and the Waneta Generating Station. The final decision to move forward is subject to a number of conditions, including approval by the BC Utilities Commission. The transaction includes a 20-year lease agreement where the electricity generated from the two-thirds share will continue to supply power to the Teck smelter in Trail at set prices.
In May, Teck announced it had reached an agreement to sell its two-thirds share of the Waneta Dam and Generating Station to Fortis Inc. When BC Hydro purchased a one-third share of Waneta in 2010, it negotiated a right of first offer on any future sales of the remaining two-thirds interest retained by Teck. As a result of this agreement, Teck offered to sell the two-thirds interest to BC Hydro on substantially the same terms and conditions that it was prepared to sell to Fortis Inc.
Kootenay Business caught up with Trail mayor Mike Martin to get his take on the Waneta Dam sale and how it will affect the community.
Recognizing that Teck put the dam up for sale, the best possible outcome would be for the dam to be purchased by the Province through BC Hydro rather than a private sector and unregulated entity. This option is far more likely to ensure that the power generated at the Waneta dam would continue to be provided to the smelter at rates that will ensure the smelter’s long-term future. Through public ownership, there exist options that might not be available or possible with private sector ownership.
Our concerns with regard to the sale of the Waneta Dam revolved around the sustainability of Teck Trail Operations along with the possible transfer of ownership of a public resource to a private sector and unregulated firm. The Trail smelter has been integrally linked to the local production of power at Waneta and its associated low power costs. The sale of the remaining two-thirds of the Waneta Dam and the known financial arrangements lead to the erosion of the low power cost resource and this could significantly hamper the operation of the smelter and its long-term sustainability.
Our interest is to ensure the continuing viability of the smelter to the extent possible, given its economic impact on the City of Trail, the region and the Province of B.C. As one of the largest industrial facilities in the province, the smelter operation affects the livelihood of thousands of people through both direct and indirect employment and supports of all levels of government. It is of immense economic and social importance to the City of Trail, the Lower Columbia and entire West Kootenay.
My understanding is that the sale process to BC Hydro now needs to go through the BC Utilities Commission (BCUC). We are fully prepared to engage in that process in support of the sale to BC Hydro. At the same time, it needs to be acknowledged that the public interest, as stated at a previous BCUC hearing, “required that the continuation of the Teck industrial operation at Trail, to the extent that is dependent upon a long-term source of inexpensive electricity, should not be impaired” and remains a consideration. As the sale process unfolds, this factor cannot be lost on either the Province or BC Hydro. It is our job to bring about the necessary attention and focus to this element.
Our job is also to work with government—our MLA in particular—to ensure there are mechanisms that allow some flexibility establishing appropriate power prices into the future and thereby protecting the jobs and economy of our region.
Our community and the whole region is highly dependent on this major employer and the impact of the (potential) increased power prices needs to be mitigated. The sale of Waneta to BC Hydro provides us with the best opportunity to influence and shape an arrangement that protects the sustainability of the smelter to the extent that it is dependent on low-cost power. However, Teck needs to continue, as it has done in the recent past, to make substantial capital investments into the facility and we have received assurance that this will continue. The operation has a long history of innovation and continuous improvement and there is no reason this world-class facility cannot be successful for many years to come, if not another 100 years.
There is no doubt that the sale of the Waneta Dam is concerning and not ideal from a community perspective. Many communities have faced similar challenges and we are no different in this regard. However, we have proven ourselves to be most resilient in overcoming numerous past challenges and I have no doubt that with our strong resolve and community pride we will succeed in addressing this challenge.
Waneta Dam history:
- The Waneta Dam is located close to the Canada-U.S. border, near the mouth of the Pend d'Oreille River just before it enters the Columbia River, near Trail, B.C.
- The dam was originally constructed in 1954 by the Consolidated Mining and Smelting Company of Canada Limited (now known as Teck) to generate power specifically for use at its smelter located in Trail
- Its four generating units total 480 megawatts of capacity and produce approximately 2,680 gigawatt hours of energy per year.
- In 2010, BC Hydro purchased a one-third share of the Waneta Dam for $825 million. Teck owns the other two-thirds.
- The BC Utilities Commission found that the BC Hydro purchase of one-third interest in the Waneta Dam was in the public interest. This decision was based on a review of cost effectiveness, due diligence and local impact.
- BC Hydro's one-third is supplied to BC Hydro customers and Teck's two-thirds is currently supplied to the Teck smelter in Trail. Under the terms of the current transaction two-thirds of the generation will continue to supply electricity to Teck's smelter in Trail during the lease period.
- The Waneta Dam is located close to the Canada-U.S. border, near the mouth of the Pend d'Oreille River just before it enters the Columbia River, near Trail, B.C.
- The dam was originally constructed in 1954 by the Consolidated Mining and Smelting Company of Canada Limited (now known as Teck) to generate power specifically for use at its smelter located in Trail
- Its four generating units total 480 megawatts of capacity and produce approximately 2,680 gigawatt hours of energy per year.
- In 2010, BC Hydro purchased a one-third share of the Waneta Dam for $825 million. Teck owns the other two-thirds.
- The BC Utilities Commission found that the BC Hydro purchase of one-third interest in the Waneta Dam was in the public interest. This decision was based on a review of cost effectiveness, due diligence and local impact.
- BC Hydro's one-third is supplied to BC Hydro customers and Teck's two-thirds is currently supplied to the Teck smelter in Trail. Under the terms of the current transaction two-thirds of the generation will continue to supply electricity to Teck's smelter in Trail during the lease period.
