BC Hydro will exercise its option to buy the remaining two-thirds interest in the Waneta dam from Teck for $1.2 billion, the company announced today.
Originally Teck planned to sell its share in the dam to Fortis, in a similar arrangement reached in May. However, when BC Hydro bought a one-third interest in the dam in 2010 for $825 million, it also negotiated a right of first offer on any future sales of the remaining two-thirds interest retained by Teck.
BC Hydro says the deal is on “substantially the same terms and conditions that it was prepared to sell to Fortis.”
The transaction includes a 20-year lease agreement where the electricity generated from the two-thirds share will continue to supply power to the Teck smelter in Trail at set prices. Teck also has an option to extend the lease by a further 10 years.
With this planned purchase, BC Hydro will have complete ownership of the dam and generating station. The final decision to move forward is subject to a number of conditions, including approval by the BC Utilities Commission.
BC Hydro says its board of directors gave its final approval last week while the provincial government has also endorsed the move.
The dam, built in 1954, has four generators totalling 480 megawatts of capacity.