AltaGas Ltd. (TSX:ALA) has started producing power at its 66-MW McLymont Creek run-of-river hydroelectric facility in British Columbia.
Commissioning of the powerhouse systems and high voltage switchyard were completed in September and the facility is now tied-in and delivering power to the Northwest Transmission Line at Bob Quinn, British Columbia. The McLymont Creek facility is supported by a 60-year, fully indexed Electricity Purchase Agreement with BC Hydro.
“The safe commissioning of McLymont marks the final stage in our $1 billion Northwest Projects, the most significant construction undertaking in AltaGas’ history,” said David Harris, President and COO of AltaGas, in an Oct. 1 statement. “Weather conditions coupled with civil construction challenges at the intake structure created delays in our construction schedule costing us approximately two months of lost generation. These issues are now behind us and we are now ready to start conducting final testing to achieve commercial operations. The commissioning of McLymont and the other Northwest Projects was made possible by the outstanding contributions of the Tahltan First Nations, our dedicated employees and contractors, BC Hydro and the Government of British Columbia.”
Over the next several weeks a number of online electrical and system functional checks will be performed. AltaGas said it expects final project commercial operations to be achieved in the fourth quarter 2015, river conditions permitting. As a result financial contributions from McLymont are not expected to be material in 2015.
The Forrest Kerr and Volcano Creek projects have been running exceptionally well and outperforming design parameters. However, rainfall in the region which has been below the seasonal average, combined with the smaller snowpack this year, created lower than average river flows at Forrest Kerr in September. In addition, AltaGas had to complete environmental testing during max flow condition per its water license. As a result, EBITDA from Forrest Kerr was impacted by approximately $5 million.
AltaGas is an energy infrastructure business with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources.