Southern Crossing Gets BC Regulatory 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
The project would cost about $350 million (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.
Joe Fisher, Houston
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