May 2011

BC Hydro gets approval for Northwest Transmission Line

Power line will energize mine development in northwestern B.C.

By Peter Caulfield

After a year-long review, the British Columbia government’s Environmental Assessment Office granted an environmental certificate to BC Hydro for its proposed Northwest Transmission Line project. By bringing inexpensive electricity to northwestern British Columbia, most of which is outside the province’s power grid, the new line is expected to have far-reaching economic benefits for an underdeveloped part of the province.

Gavin Dirom, president and CEO of the Association for Mineral Exploration British Columbia, says the region has “world-class geology,” but development has been limited by a lack of infrastructure. “Granting the environmental assessment certificate for the line represents the start of a new era for mineral exploration and development in northwestern B.C.,” he said. “Replacing diesel-generated with low-cost hydro-electric power will make a huge difference.”

The proposed $404-million project includes a new 287-kilovolt transmission line that will extend 344 kilometres from the Skeena substation south of Terrace, along the Highway 37 corridor to a new substation near Bob Quinn Lake. The project will also include new access roads and an upgrade to the Skeena substation.

According to Dirom, there are more than 935 mineral occurrences in the region that could benefit from the transmission line. Of that number, 67 are in the resource category. And the provincial government has identified 25 major exploration projects in the northwest.

Pierre Gratton, outgoing president and CEO of the Mining Association of BC, said the power line has the potential to attract more than $15 billion in investment, create 10,700 jobs and generate $300 million in annual tax revenues for governments.

The B.C. Ministry of Environment announced that the three-year construction period, which will begin in late spring or early summer 2011 and conclude at the end of 2013, is expected to generate an average of 860 person-years of full-time direct employment. The operational phase of the project is expected to generate more than 36 person-years of employment over the life of the project.

AltaGas, a Calgary-based company, recently signed an agreement with BC Hydro to build and develop the Forrest Kerr project. The $700-million project will provide 195 megawatts of power to the Northwest Transmission Line. Work has already begun on the project and a large construction camp has been built to house the workers needed to get the plan underway.

Some well-known exploration projects that are also expected to benefit from the new line include: Red Chris (Imperial Metals Corporation), Galore Creek (Teck Resources/Nova Gold Resources Inc.), Kutcho (Capstone Mining Corporation) and Mount Klappan (Fortune Minerals Ltd.).

Byng Giraud, vice-president, corporate affairs at Imperial Metals, expects that Imperial’s Red Chris development, a planned 30,000-tonne-per-day copper-gold open pit mine, will likely be the first major consumer of power from the line. The company anticipates that it will be able to connect to the Bob Quinn hydro site, 120 kilometres away from a proposed mill. “The new power line will make Red Chris a more attractive investment,” Giraud said.

Before BC Hydro can start clearing the right-of-way to begin construction of the line, it needs the permission from federal environmental assessment regulators, who also examined the project. Bruce Barrett, BC Hydro’s vice-president of transmission and distribution major projects, said the project should receive approval in the spring of 2011.

BC Hydro has also signed impact benefit agreements (IBAs) with the Nisga’a, Kitselas, Tahltan and the Metlakatla First Nations. Negotiations are currently underway with other First Nations. Glenn Bennett, chief councillor of Kitselas First Nation, said, “The line will be extremely beneficial to the region, which is very depressed economically. We need the employment.”

Bennett said the Kitselas signed an IBA with BC Hydro about six months ago. “We received a one-time payment from BC Hydro and the right to bid on construction contracts pertaining to building the line,” he said.

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