Alcan's power aspirations finding some heated criticism

The plan from Alcan to become a major power developer and contributor to the
B. C. grid is beginning to attract more in the way of interest and with it some criticism.

The B. C. Utilities Commission met last week and the prospect of the province giving away public assets to a private corporation, is not sitting well with a number of provincial NDP MLA’s. Two high profile NDP member appeared in front of the commission on Wednesday to outline their objections to the Alcan plans for power development and the impact it might have on a public resource.

Described as a sweet heart deal that will provide for a win fall of profits of 1,000 percent, the critics painted a scenario where Alcan will make huge profits from the sale of hydro power, while at the same time spending money to upgrade their facilities in other parts of the world, while they drive down the price of the product.

Jobs of course are also on the mind of people in Kitimat, the recent announcement of modifications and modernization to the plant in Kitimat will come with a reduction in the work force there, all while the company takes in large profits from the sale of power.

Details of which are kept close to the vest in the secretive world of Alcan’s venture into the power generation world.

The Daily featured the details of the BCUC meetings so far and the concerns of the NDP members, who addressed the board,


ALCAN’S HYDRO DEAL BAD FOR B.C., SAY MLA’s
By James Vassallo
The Daily News
Friday, December 8, 2006
Page one

Members of the provincial NDP appeared before the B.C. Utilities Commission this week with a straightforward position on a power deal between Alcan and B.C. Hydro: It’s bad.
John Horgan, the NDP Critic for Energy, Mines and Petroleum Resources, and Robin Austin, the MLA for Skeena, appeared before the commission Wednesday to say the deal gives away public assets and will ultimately cost Hydro ratepayers.

“The price B.C. Hydro will be paying for this power bears no relation to the actual cost of producing that power,” said Horgan. “This is a sweetheart deal for Alcan. It gives them windfall profits of more than 1,000 per cent, which will come out of the pockets of B.C. Hydro ratepayers.”

Austin, whose Skeena riding includes Alcan’s smelter at Kitimat, said the deal further cements Alcan’s transformation from an aluminum-smelting company into a power company in British Columbia.

“Alcan will take those profits and use them to upgrade their aluminum facilities in other parts of the world,” said Austin. “Ultimately, that will drive down the market for aluminum from British Columbia.”

The district of Kitimat has been fighting the deal tooth and nail. Estimates say Alcan’s Kemano facility could produce as much as $1 billion in electricity during the next 20 years. However, the utilities commission has refused to say how much B.C. Hydro will be paid for the electricity deal.
In August of this year, Alcan and the Provincial Government announced a Kitimat smelter ‘modernization.’ The $1.8 billion U.S. upgrade means production capacity will increase significantly, but new technology means the smelter will employ about 550 fewer people.

At the same time, Kitimat representatives said B.C. Hydro quietly submitted to the B.C. Utilities Commission an unsigned agreement with Alcan to purchase a substantial amount of Kemano’s electrical output. Pricing for the power was blacked out in the tentative agreement.

Kitimat was informed by its lawyers that B.C. Hydro has now signed a deal that solidifies its power purchasing relationship with Alcan; however, the contract will not be released to the public because it contains ‘commercial’ information.

The community is concerned about the contract because, while there is no guarantee that Alcan will actually modernize the smelter, this contract guarantees that as much power as Alcan chooses to sell will be purchased by B.C. Hydro.

The city believes this is a major detriment to the aluminum industry in B.C.
“They’re using a public resource to do it,” said Horgan.

“The water that Alcan is using to generate this power belongs to the people of British Columbia. It should benefit all British Columbians, by providing affordable, reliable power for industry.

“Instead, the benefits are going overwhelmingly to Alcan and its shareholders.”

The BCUC hearings are expected to wrap up some time on Friday.