BC Hydro amends cost estimates for four projects, including adding C$175m to Northwest Transmission Line

BC Hydro has amended the cost estimates for four major transmission projects across the Canadian province of British Columbia, including a large jump in the estimated cost of the Northwest Transmission Line (NTL), a 287-kV line that will run from the Skeena substation near Terrace, B.C., to a new substation near Bob Quinn Lake.

The utility’s revised service plan, filed June 27 in conjunction with the province’s June budget update, included an increase in the estimated cost of the 211mile project of as much as C$175m since the 2013/14 – 2014/15 service plan was filed in February.

The revised cost for the project, which includes transmission lines and the new substation, jumped to a range of C$736m to C$746m from the estimate of C$561m to C$617m in the original service plan, representing an increase of C$175m at the low end of the range to an increase of C$129m at the high end.

The NTL is targeted for completion in 2015.

The revised service plan also increased the high end of the estimated cost range for the Vancouver City Central transmission project, from a range of C$160m to C$180m in the February service plan to a revised range of C$160m to C$201m in the newer document.

The Vancouver City Central project includes the construction of an enclosed 230/12kV substation and two new underground 230-kV transmission lines connecting the new substation to the existing transmission network.

The project, which is expected to be completed in fiscal year 2014, will serve growing loads in the Mt. Pleasant/False Creek area of the city and maintain a reliable supply of electricity to other areas of the city, according to the revised service plan.

Estimated ranges were narrowed for two other transmission projects.

The range for the Dawson Creek/Chetwynd Area transmission project was revised to C$220m to C$255m from an earlier estimate of C$190m to C$300m, while the range for the Interior to Lower Mainland project was amended to C$690m to C$725m, an increase from the range of C$657m to C$725m.

The project, which is targeted for completion in fiscal year 2014, will expand the Peace Region 230-kV transmission system to the Dawson Creek/Chetwynd area to supply the high area load growth.

The lower end of the cost estimate for the Interior to Lower Mainland (ILM) project was revised to C$690m from an earlier estimate of C$657m. The upper end of the estimated range remained unchanged, at C$725m.

The ILM consists of a new 500-kV transmission line extending approximately 158 miles between the Nicola substation near Merritt, B.C., and the Meridian substation in Coquitlam in the metro Vancouver area.

The project, which BC Hydro says is needed to help meet domestic load growth, is targeted for completion in fiscal year 2015.

The estimated cost for a fifth project, the Merritt Area transmission project, was unchanged from the previous estimated range of C$58m to C$66m. The project, consisting of a new 138-kV radial transmission line from the existing Highland substation to a new substation in Merritt, B.C., will meet the increased demand for power in the area and is expected to be energized in July 2014.

BC Hydro regularly updates cost estimates to reflect actual financial results, BC Hydro chairman Stephen Bellringer said in the revised service plan.

Calls seeking additional detail from BC Hydro were not returned by press time July 8.

BC Hydro has steadily increased the estimated cost of three of the five projects since FY11 .

The cost range for the NTL project has seen the largest variation. The project estimate was listed as C$364m to C$525m for the 2011/12-2013/14 plans, increased to a single figure of C$561m in the 2012/13-2014/15 plan, then revised to a range of C$561m to C$617m for the 2013/14-2015/16 plan, and ultimately increased to C$736m to C$746m in the revised 2013/14-2015/16 plan.

The low end of the range for the ILM project has increased, while the high end has dropped. The range listed in the 2011/12-2013/14 plan was C$550m to C$780m, presented as a single figure of C$708 in the 2012/13-2014/15 plan, a range of C$657m to C$725M for the 2013/14-2015/16 plan, and subsequently narrowed to C$690m to C$725m in the revised 2013/14-2015/16 plan.

The cost range for the Dawson Creek project was listed as C$150m to C$250m for the 2011/12-2013/14 and 2012/13-2014/15 plans, increased to C$190m to C$300M for the 2013/14-2015/16 plan, but was subsequently narrowed to C$220m to C$255m in the revised 2013/14-2015/16 plan.

Cost estimates for the Vancouver City Central project have shown the greatest stability. In the 2011/12-2013/14 plan, the project was estimated to cost between C$177m and C$195m, while the 2012/13-2014/15 plan reflected the single C$177m figure on the low end of the range. In the 2013/14-2015/16 plan, the range was C$160m to C$180 and was subsequently revised to C$160m to C$201m in the revised 2013/14-2015/16 plan.

Various factors can result in upward revisions of estimated costs, including labor and material shortage, particularly in remote areas where manpower and materials can be expensive due to their short supply.

For example, a 58-mile extension was recently added to the NTL project, taking it farther north to what is described as the remote community of Iskut, B.C. According to developers, the project is expected to create 600 jobs, but Iskut’s population is only about 400, meaning many workers will come from elsewhere, likely at greater expense than if a large enough workforce was available locally. In addition, the Dawson Creek project is estimated to add between 55 and 110 jobs, while the ILM project will add approximately 170 jobs.

On top of the BC Hydro projects, other construction in the area also places demands on manpower, supplies and equipment, further taxing the resources of the area and even the region. Those projects include the construction of the Red Chris copper mine, three AltaGas run-of-river hydro projects, and Rio Tinto Alcan’s rebuilding of its Kitimat aluminum smelter.