Water Stewardship

Independent Power Producers Questions and Answers

General:

Q.: What are IPP’s?

A.: From the perspective of Water Stewardship Division, Ministry of Environment, an IPP (Independent Power Producer) is a relatively new, prospective or actual producer of hydro-electric power, other than one of the long established large scale producers like BC Hydro, Alcan or the Columbia Power Corporation, who uses water as the basis for generating power. The water may be used in a run of the river facility or through a dam/generating station and storage reservoir arrangement. In this context, independent producers of electricity using fossil fuels, nuclear, wind, wave or tidal energy or any other non (fresh) water related means of generation, are not considered here.

Q.: Where does power produced by IPP’s go? Who receives it?

A.: Depending on each individual circumstance, power from IPP projects is generally sold to BC Hydro and provided to BC Hydro customers on their distribution grid.

Q.: What (environmentally related) legislation or regulations govern IPP’s?

A.: The proponent’s investigation of a waterpower project should consider the requirements of all legislation in the context of the diversion of water and use of Crown land. Some of the requirements are discussed below:

• A waterpower project that has a capacity greater than the threshold (currently 50 MW) set for energy projects under the Reviewable Projects Regulation, or those otherwise designated by the Minister, is reviewable under the Environmental Assessment Act (EAA). If a project is approved under the EAA, any licensing under the Water Act and Land Act is provided by the Ministry of Environment and Ministry of Agriculture and lands, respectively.

• The Water Protection Act and the Fish Protection Act include provisions that may affect some projects.

• Reserves established under the Water Act and Land Act may affect the development of a waterpower project on certain streams and tracts of Crown land. Information on such reserves is available from the MOE or MOA&L.

• The stream for a waterpower project may be classified as a “community watershed” under the Forest Practices Code of British Columbia Act and this may impose conditions on the construction of the project.

Q.: How are IPP impacts assessed?

A.: A key part of any application for a waterpower project will be to assess its impacts.

Projects that have wide-ranging impacts will require the involvement of many agencies in the process. MOE will ask for input during the review of the project to ensure decisions are balanced. In addition, others consulted would include communities and the general public; non-government organizations; and people already holding rights under the Water Act and Land Act that may be affected by the project. Potential impacts on Aboriginal rights and title will be assessed in accordance with the current case law on aboriginal rights. Simpler projects may require only that the proponent work under the direction of MOE to address general concerns about the project.

Q.: What is the IPPBC?

A.: The IPPBC is the Independent Power Producers Association of British Columbia. The

IPPBC represents power suppliers, power retailers and their supporting industries.  Its vision is to promote an open, fair market for power suppliers in British Columbia's competitive electricity industry by:

• Championing policy recommendations that are conducive to a viable market with many buyers and sellers; and
• Informing British Columbians of the benefits of a competitive electricity industry

More information on the IPPBC may be found on their website.

IPP Statistics:

Q.: How many IPP projects are currently in operation and selling power to BC Hydro?

A.: 31 IPP projects are currently in operation and selling power to BC Hydro.

Q.: What percentage of the total provincial installed capacity is from IPP projects?

A.: The total provincial installed capacity from IPP projects is 2.7 percent (not including CPC).

Q: What is the breakdown of the hydro energy generated in the province from the different generators?

A: In 2006: BC Hydro generated 74 percent, Alcan 12.5 percent (including smelter use), Cominco 4.8 percent (including smelter use), CPC 3.0 percent, Fortis 1.6 percent, and the rest (including all IPPs) 4.1 percent.

Q.: What is the total annual water power rental paid by the IPP projects?

A.: The total annual water power rental from all projects (including BC Hydro) is about $300 million. The portion paid by the IPP projects is about $3.3 million.

Q.: How many IPP projects are licensed but still currently under construction?

A.: 29 IPP projects are licensed but still currently under/planning construction.

Q.: How many IPP projects have applied for a water licence?

A.: As of December, 2007, there are currently 437 applications for a “power, general” water licence. Most of these would be for IPP projects.

“Power, general” is defined in the Water Regulation of the Water Act. All power utilities (e.g. BC Hydro, Fortis) and all IPPs will fall into the power general category.

Q.: How many applications from IPP’s has the Ministry received?

A.: This is a difficult number to track as the Ministry’s Water Licensing System (WLS) does not delineate between IPP’s and other power producers such as BC Hydro or Columbia Power Corporation. The number of applications related to general power is currently over 400, although it is not immediately clear how many of these would actually belong to the real 'IPP' category.

The number of power general applications received (would be mostly IPP’s) since 2000 are provided below:

Note: Some of the above applications would have been reviewed and if a decision has been issued, will not be part of the current list of 433 applications.

An overview of these steps may be found in the Guide for WATERPOWER PROJECTS.

Most IPP projects are run of river projects. Run of river projects are projects which do not involve storage and no observed change in stream flow downstream of the power-plant. Larger projects may involve storage that would be used for load shaping. In the latter case, a storage licence, in addition to a diversion licence, would be required to operate the project.

IPP Water Licenses and Applications:

Q.: Does an IPP require a water licence?

A.: A waterpower project requires a water licence under the Water Act, and tenure under the Land Act for any component of the project situated on Crown land. As part of the government’s commitment to accelerate economic development in key sectors, it is committed to reducing the regulatory burden and providing clients with a more streamlined process. Applications for a waterpower project will be processed through "one window" with the water licence and Crown land tenure applications adjudicated concurrently.

The forms and specific information for filing an application for a water licence and Crown land tenure are available on the Internet in the IPP guidebook and included appendices or from MOE regional offices.

Q.: What are the steps in an IPP application process?

A.: The process for bringing a waterpower project into production consists of ten steps. Steps 1 to 7 set out the requirements for the submission, review and adjudication of an application. The requirements for the construction, start of operation and monitoring of the project are described in Steps 8, 9 and 10.

An overview of these steps may be found in the Guide for WATERPOWER PROJECTS.

Q.: What information is required for an IPP water licence application?

A.: An application for a waterpower project must include the following information:

• completed application forms for Crown land tenures and a water licence;
• maps and plans of the project;
• title certificates and legal plans;
• preliminary project definition;
• certificate of incorporation; and
• application fees.

An Application Package that includes forms and directions for completing an application for a water licence and Crown land tenure is available from any MOE regional office.

Q.: Where can I find more information on water licence application for IPP’s?

A.: More information on IPP’s can be found in the IPP guidebook, Guide for WATERPOWER PROJECTS.

This guide is a framework for the information a proponent will need to provide in order to facilitate an application and is applicable to run-of-the-river projects as well as storage-supported projects. If the electricity from the project will be used in the commercial and general categories, the projects will be reviewed according to this Guide. Projects for the generation of electricity in the residential category are not captured.

Q.: How many IPP projects were issued a water licence in FY 2006/2007?

A.: 14 IPP projects were issued a water licence in FY 2006/2007.

The number of IPP power licences issued since 2000 are provided below:

Q.: How many IPP projects have been issued a water licence in FY 2007/2008?

A.: 6 IPP projects have been issued a water licence in FY 2007/2008 (through December, 2007).

• Ministry of Agriculture and Lands should be contacted regarding land and resource plans for the area encompassing the stream on which the waterpower project is situated.

• Local government may require that the land required for the waterpower project be rezoned before the project can be constructed. When the review of an application is initiated, if rezoning is required, MOA&L and local government should discuss the appropriate point in the MOA&L process at which the applicant should formally initiate the rezoning process.

• The federal Fisheries Act and the Navigable Water Protection Act may require decisions that will initiate a review of the project under the Canadian Environmental Assessment Act. Such a review will be coordinated as much as possible with the review described in this Guide.