The idea of Penticton generating its own electricity has been put on the back burner for a while longer.
After Midgard Consulting reported back on the study commissioned earlier this year, council voted to move discussion of future movement on the project to the 2013 budget discussions.
Peter Helland, spokesperson for Midgard, told council that there were feasible power generations options, which would allow Penticton to offset the costs of purchasing power from Fortis B.C. to resell through the city utility. Penticton-generated electricity could be pumped into the grid, meaning less would need to be purchased from Fortis, or it could be sold to B.C. Hydro, who pay a premium for green energy.
“They are exclusively hydroelectric, at least at our level of study,” said Helland. “We evaluated some thermal generation options, burning natural gas or burning biomass, but they aren’t considered economic or feasible at this time.”
Seven options were reviewed, but Helland said all but three were either uneconomic or had serious technical challenges. The three that were left are the Greyback Dam, the Randolf irrigation diversion and the Penticton Creek Dam No. 2.
The top recommendation is to set up a hydroelectric plant coming off the Randolf irrigation diversion, above the dam on Penticton Creek. That one, Helland said, would generate up to 2.83 GWh, and cost $2.2 million. Second was Penticton Creek Dam, which while considerably cheaper at $180,000, would only generate 0.26 GWh.
“It should be noted that it is a very small opportunity there, so we don’t recommend it as your first choice,” said Helland, referring to the dam site. “This one would be a subsequent option that could piggyback on some of the infrastructure you would have to establish.”
The payback period for the two projects is estimated at 15 years and 19 years, respectively. The third option, Greyback, would take considerably longer to pay off — 28 years — but would generate much more electricity, 22.6 GWh. For comparison, the City of Penticton is budgeted to purchase 350.5 GWh of electricity in 2012, at a cost of $23,657,000.
Though it is the larger project, Helland puts the Greyback project in third place, citing significant technical and other risks, including a $33 million price tag.
“Until you have gained experience operating hydroelectric facilities, we recommend some smaller ones with lower capital costs, then you could gauge more accurately your appetite for a large project such as this,” he said.
Coun. Helen Konanz was concerned about the long payback times and that even the recommended project was listed as marginal/risky in economic impact.
“None of these are slam dunks. We are not seeing 20 per cent return on investment,” Helland said. “You will have an asset that will last the city of Penticton 60 or 60-plus years. So a 15-year payback is not a huge deal.”
Helland recommended the city continue with two further studies, pipe capacity at Randolf and a fisheries impact assessment, to further refine the projects.
“That will determine whether or not those projects are fundamentally economic. That is your low-cost way forward,” he said. “The key is, you won’t be spending lots of other money investigating other things that are not important.”