BC Hydro has announced it plans to purchase the remaining two-thirds ownership in the Waneta Dam and 480-MW Generating Station from Teck Resources Limited for $1.2 billion.
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. Teck also has an option to extend the lease by a further 10 years.
“BC Hydro was presented with a unique opportunity to purchase the remaining two-thirds interest in the Waneta Dam and our analysis shows that this purchase is in the best interest of our customers,” said Ken Peterson, chair of BC Hydro. “Our number one priority is to keep rates low, and this purchase will help make rates more affordable.”
Waneta Dam is located near the mouth of the Pend d’Oreille River just before it enters the Columbia River, close to the Canada-U.S. border. The dam was originally constructed in 1954 to generate power for use at the Teck (formerly Consolidated Mining and Smelting Company of Canada Limited) smelter located in Trail. The powerhouse contains four turbine-generator units with a total capacity of 480 MW that produce about 2,680 GWh of electricity annually.
In May, Teck announced it had reached an agreement to sell its two-thirds share to Fortis Inc. When BC Hydro purchased a one-third share in 2010 for $825 million, it negotiated a right of first offer on any future sales of Teck’s two-thirds interest. As a result, Teck offered to sell its interest to BC Hydro on substantially the same terms and conditions as those offered to Fortis, BC Hydro says.
BC Hydro then conducted an in-depth review of the opportunity, and the board of directors gave its final approval last week.
The decision to move forward is subject to a number of conditions, including approval by the BC Utilities Commission, according to a BC Hydro press release.
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