Teck Sells Waneta Dam Interest
Fortis Inc. is a leader in the North American regulated electric and gas utility industry, with total assets of approximately C$48 billion. The corporation’s 8,000 employees serve utility customers in five Canadian provinces, nine U.S. states and three Caribbean countries. The Waneta Dam has total capacity of 496 megawatts (MW) of renewable power and generates an average of 2,750 Gigawatt hours (GWh) of energy per year. Teck’s Trail Operations utilize approximately 1,880 GWh of energy per year from Waneta.
BC Hydro has a one-third ownership interest in Waneta and receives approximately one-third of the power generated by the Waneta Dam. Under the Teck-Fortis agreement, Teck will be granted a 20-year lease to use Fortis’ two-thirds interest in Waneta to produce power for its Trail Operations. Annual payments will begin at approximately C$75 million per year and escalate at 2% per year, equivalent to an initial power price of $40/MW hour based on 1,880 GWh of energy per year. Teck will have an option to extend the lease for a further 10 years at comparable rates.
“This agreement will further strengthen Teck’s balance sheet and provide significant new capital that can be reinvested to grow our overall business,” said Teck President and CEO Don Lindsay. “We have secured a long-term power supply for Trail Operations at competitive, below-market pricing and will invest in innovative projects to further enhance and modernize this facility.” Under its co-ownership and operating agreement with Teck, BC Hydro has the right of first offer enabling it to match the Fortis offer and purchase the two-thirds share of the Waneta Dam under the equivalent terms. BC Hydro has 60 days to review the transaction and make a decision.
The Waneta dam was originally constructed in 1954 by the Consolidated Mining and Smelting Co. of Canada Ltd., one of Teck’s predecessors, to generate power specifically for use at its smelter located in Trail, British Columbia.