John Hart Generating Station Replacement

operational

Opportunity The John Hart Generating Station has been in operation since 1947 and is a designated heritage asset under B.C.’s Clean Energy Act. No substantial upgrades or modifications had been made to the facility since 1952. As a result, the infrastructure is in poor condition with declining capacity, posing significant financial, environmental and safety risks. After reviewing its options, BC Hydro determined that replacement of the facility was the best option to ensure seismic safety, continued reliability of power generation and better environmental performance. As a provincial Crown corporation BC Hydro was required to follow the province’s Capital Asset Management Framework, which requires assessment of suitability of alternative procurement for capital projects greater than $50 million. Challenges The facility was the first P3 hydroelectric power project in Canada of this size and complexity. Innovations The project lies within the traditional territories of four First Nations; extensive consultations were conducted with each of the First Nations communities, and impact benefit agreements were reached with the We Wai Kai Nation, Campbell River Indian Band (CRIB) and K'ómoks First Nations. Homalco First Nation deferred all matters of consultation related to the project to the We Wai Kai and CRIB. The performance-based project agreement was built around the principles of Partnership BC’s P3 model and includes a heavy focus on quality and performance indicators reinforced by financial penalties for non-compliance that apply ins both the construction and services periods. A 15-year service term was chosen by BC Hydro after consideration of the typical period in which design and construction deficiencies in these types of assets are identified. BC Hydro can withhold monies in trust equal to the cost of remediation at handback. A longer term may have resulted in BC Hydro paying a risk premium for major rehabilitation work after the 15-year period which may not have been required. The introduction of local businesses to bidders during the procurement process, as well as a business opportunity event held by the successful proponent, were so successful they inspired the Campbell River Chamber of Commerce to launch a web portal encouraging the local business community to register and prepare for other upcoming major capital projects in the area. Results The project includes the construction of a replacement water intake at the John Hart spillway dam; replacement of three 1.8-kilometre long penstocks, with a 2.1-kilometre long tunnel; and the construction of a new generating station and water bypass facility upstream of the existing station. The new facility will generate enough annual power output to supply 80,000 homes— an increase of 10 per cent over the previous facility. The design provides new benefits to the community, such as improved access to trails and the river, and allows the facility to fit into the surrounding Elk Falls Provincial Park. Once implemented, the project will result in environmental benefits including improved flow continuity in the lower Campbell River through the provision of a water-flow bypass facility and remediation of existing contamination. Benefits to the First Nations communities include training and education funds, economic development opportunities related to the construction of the project and wider involvement in BC Hydro’s watershed activities. The project will create about 400 jobs a year over the five years of construction. “I congratulate BC Hydro, SNC-Lavalin and the community of Campbell River on this major milestone. We have worked hard with BC Hydro to introduce a 10-year plan for rates that paves the way for important capital projects like this, while allowing cost reductions in other areas. I’m especially pleased with the economic benefits this project will provide during construction and in the long-term thanks to the clean, reliable energy that will be generated at John Hart.” - Bill Bennett, Minister of Energy and Mines Learn more at: Case Studies

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