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Developers delay $4-billion Bute hydro project

Plutonic Power Corp. and General Electric Co. will delay their controversial, $4-billion Bute hydroelectric project north of Vancouver, a decision made amid the public-policy confusion that has beset energy development in British Columbia.

While Vancouver-based Plutonic insists it could have won a power-purchase agreement from BC Hydro, it has instead decided to spend another year collecting data and conducting other preparatory work, hoping to move to officially win a contract with the provincially owned electricity provider at a later date.

With the delay, the earliest Bute could be supplying power is 2014.

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Bute was among dozens of projects being considered in a call for green power issued by BC Hydro nearly two years ago. The process descended into chaos last summer when the independent B.C. Utilities Commission rejected BC Hydro's plans as "not in the public interest." The commission also said that hydro could rely more heavily on the half-century-old greenhouse-gas-spewing natural gas power plant Burrard Thermal in Port Moody.

The situation flared as competing jurisdictions around the world - in Canada, B.C.'s chief rival is Ontario - pushed aggressively to attract green energy capital from investors still scarred by the near-implosion of the global economy.

Winners in the B.C. clean call are expected to be announced by BC Hydro by the end of this week - Plutonic and GE are still in the running with a small project called Upper Toba near Bute - but the whole drama has led to a rewriting of energy development law in B.C., with Premier Gordon Campbell's Liberal government ready to introduce the Clean Energy Act.

The act will likely overhaul rules that govern entities including BC Hydro and the utilities commission, as Mr. Campbell codifies his green-energy goals.

"The government is extremely frustrated," said Donald McInnes, chief executive officer of Plutonic.

With additional time to work on Bute, and the arrival of the development-friendly Clean Energy Act, Plutonic Power is confident it will be able to eventually build Bute. The project would partly dam creeks and rivers with 17 power facilities in the glaciated Coast Mountains above Bute Inlet and require power lines to connect to the provincial grid.

Located roughly 250 kilometres northwest of Vancouver, Bute Inlet could power 300,000 homes and displace two million tonnes of greenhouse gases each year (equivalent to 16 per cent of emissions from Canada's largest oil sands mine, Syncrude).

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Opponents of such run-of-river hydroelectric projects protest against them for three main reasons: industrial development in areas that remain mostly pristine; the sheer size of a project like Bute; and because the projects are privately owned rather than controlled by the government.

Still, B.C.'s leading environmentalists - David Suzuki, climate scientist Andrew Weaver, and activist Tzeporah Berman - all support measured run-of-river development. Some, like Prof. Weaver, support the Premier's goal to eventually export green power, as it might, for example, displace dirty coal power in Alberta (and generate money for B.C.). However, it is unclear whether there is a long-term market for B.C. power outside the province. And, in any case, the first step is electricity self-sufficiency, as B.C. imports power from Alberta to meet demand.

An additional recent sign of Mr. Campbell's political commitment to green energy is the appointment of deputy minister Robin Junger, who will report directly to the Premier.

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About the Author
National correspondent, Vancouver bureau

David Ebner is a national correspondent based in Vancouver. He joined The Globe and Mail in 2000 and worked in Toronto and Calgary before moving to Vancouver in 2008. He has reported on a wide range of stories – business, politics, arts, crime – and has covered sports since 2012. More

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