Background and development of the 2024 Call for Power

We are accepting pre-submission Competitive Electricity Acquisition Process (CEAP) Interconnection Requests beginning March 4, 2024 until April 19, 2024 at 5:00 p.m.

CEAP submission documents and information can be found on the CEAP 2024 Call for Power website and questions relating to the interconnection process can be emailed to CEAP2024@bchydro.com.

For several months, BC Hydro and the Canada Infrastructure Bank (the CIB) have been discussing the potential for CIB to support the Call for Power (the Call), and specifically to support First Nations looking to source capital to fund their equity ownership in winning bids.

The CIB has informed BC Hydro that it will support the Call by making a loan package available to all winning bidders. Draft credit documents will be available to all Proponents who register interest in the procurement at CFP-BCH-2024@cib-bic.ca. The CIB anticipates these documents to be available on the date that BC Hydro releases the Call Request for Proposal (RFP).

The minimum 25% First Nations equity ownership must be in place by the project's Commercial Operation Date (COD). At the time of proposal submission, the Proponent and First Nations Community must attest to the proportion of First Nation equity ownership in the project.

The requirements related to First Nations Equity Ownership are outlined in Section 3.0 and Attachment 7 of the draft RFP.

Changes to generation equipment may be permissible but consideration must be given to the provisions of both the EPA and the Open Access Transmission Tariff (OATT) to determine the feasibility of such change.

Under the terms of the EPA, any proposed change to the Seller's Plant, which would include generation equipment, requires, at a minimum, consent of BC Hydro. Depending on the particular proposed change, certain conditions may also need to be satisfied, which are set out in detail in section 4.8 of the Specimen EPA. As such, any proposed change in generation equipment must be communicated to BC Hydro for consideration under the EPA. To the extent acceptable, and provided that the relevant conditions are satisfied, then the Seller's Plant Description in Appendix B would be updated by the parties.

Even if consent is granted by BC Hydro under the EPA, a proposed change in generation equipment may trigger a process under the OATT. For example, equipment changes that result in an upward change to the injection amount at the Point of Interconnection – or POI – (to the BC Hydro system) will trigger a separate and distinct interconnection study process. Other changes may result in the need for additional studies under the Standard Generator Interconnection Process which could result in impacts to the overall project schedule and costs. Additionally, there may also be implications to the queue position that would need to be carefully considered prior to proceeding with such change.

Although this is an energy call, a capacity credit may be available in the evaluation for projects that can meet the definition of the Capacity Commitment as outlined in the EPA (summarized here below for readability):

The Seller will deliver and sell to the Buyer at the POI, Energy in at least the amount of the Designated Capacity Commitment in every On-Peak Hour between November 1 and February 28.

In our view, some technologies such as biomass or storage hydro may be able to meet the requirements for the Capacity Commitment under the EPA but it may be more challenging for intermittent resources, such as wind or solar, even when combined with battery to meet this requirement.

We note as well that liquidated damages will apply for under delivery of the Capacity Commitment as summarized below:

Calculation of Liquidated Damages: The equation shown in section 11.2 of the Draft Specimen EPA indicates that the Liquidated Damages (LDs) is $58,000 for each MW shortfall for the capacity commitment period. As a hypothetical example, for a 100 MW capacity project, with expected average annual energy of 300,000 MWh, and a 60 MW capacity commitment, LDs payable should the 33rd lowest hour of delivered MW of the November 1 to February 28 on peak hours were to be 20 MW, would be $2.32M (60 MW - 20 MW)*$58,000.

At this point we're not contemplating negotiated changes to the Specimen EPAs after the documents have been finalized and the Call for Power RFP has been issued.

Proponents will not be required to hold all permits for their project to be eligible for the Call when proposals are submitted. We plan to request that proponents submit a permitting plan at the time of proposal submission, including a list of anticipated required permits, a schedule to obtain permits and the status of permits at the time of proposal submission.

For projects located on provincial crown land, we will expect that the proponent has either applied for, holds, or has under review for replacement, of a Land Act Investigative Use Licence.