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Southern Crossing Gets BCUC Approval

Southern Crossing Gets BCUC Approval

The on-again, off-again Southern Crossing project of BC Gas could go forward assuming the company agrees to terms specified in an approval from the British Columbia Utilities Commission (BCUC).

"The commission has given us the choice of completing the project for the winter season of 2000/2001 or of 2001/2002 and we will spend a few days to determine which is most appropriate to meet the commission's other condition that the company accept all risk for cost overruns beyond 10%," BC Gas CEO John Reid said in a press release. "However, I expect we will have crews in the field this summer getting going on the land work that precedes pipeline construction."

The project would cost about $350 million in 1997 dollars and would parallel the existing BC Gas mainline in southern British Columbia between Yahk and Oliver. The project would serve growth in Lower Mainland peak and seasonal demand and would link the north-south Westcoast Energy pipeline connecting to British Columbia and the U.S. Pacific Northwest.

In December, BC Gas re-filed for project approval after Southern Crossing was denied BCUC approval in April 1998. "The commission in its decision felt that the projected growth in demand from residential and commercial customers alone on the BC Gas system was not sufficient to justify the large capital expenditure at this time," BC Gas said in an April statement.

The BCUC ordered BC Gas to explore synergies between the seasonal and peaking needs of its customers and the firm capacity requirements represented by new power generation plants in the region. BC Gas then signed up two shippers. The company agreed on terms with BC Hydro for 50% of firm capacity on the proposed pipeline and peak-shaving to be provided to BC Gas by BC Hydro.

Also taking capacity on the project is PG&E Energy Trading Canada Corp. The agreement calls for PG&E Energy Trading to take 50% of the project's capacity from Huntingdon, BC, for 10 years. Southern Crossing also would provide capacity to utility customers in the British Columbia interior.

A BC Gas spokesman said the company has received provincial environmental approval for Southern Crossing and federal environmental approval is pending.

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