March 7, 2011 Ms. Erica M. Hamilton Commission Secretary British - PDF document

BC H YDRO – R USKIN D AM AND P OWERHOUSE U PGRADE P ROJECT E XHIBIT B-2 Joanna Sofield Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 bchydroregulatorygroup@bchydro.com March 7, 2011 Ms. Erica M. Hamilton Commission Secretary British Columbia Utilities Commission Sixth Floor – 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Hamilton: RE: Project No. 3698623 British Columbia Utilities Commission (BCUC) British Columbia Hydro and Power Authority (BC Hydro) Ruskin Dam and Powerhouse Upgrade Project (Project) Application for a Certificate of Public Convenience and Necessity (CPCN) Attached as Exhibit B-2 is BC Hydro’s presentation from the Ruskin Dam and Powerhouse Upgrade Project CPCN Application Information Session held on February 28, 2011. For further information, please contact Geoff Higgins at 604-623-4121 or by e-mail at bchydroregulatorygroup@bchydro.com. Yours sincerely, Joanna Sofield Chief Regulatory Officer sh/rh Enclosure Copy to: Kwantelen First Nation Sto:lo Tribal Council Matsqui First Nation BCUC Project No. 3698592 BC Hydro F11 RRA Registered Intervener Distribution List British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3 www.bchydro.com

Ruskin Dam and Powerhouse Upgrade Project CPCN Application Information Session February 28, 2011 1

INTRODUCTION WORKSHOP AGENDA  Introduction (Geoff Higgins);  CPCN Application Overview (Craig Godsoe);  Facility and Project Overview (Chris O’Riley);  BC Hydro’s Load Forecast and Load/Resource Balance (Randy Reimann);  Alternatives Analysis (Dean Cardno);  First Nations Consultation and Public Engagement (Boyd Mason);  Project Risk and Risk Mitigation (Boyd Mason);  Rate Impact and BCUC Regulatory Timetable (Geoff Higgins). 2

CPCN Application Overview REGULATORY APPROVALS  Project does not trigger CEAA or BCEAA:  BCEAA: modification to an existing facility below 50MW threshold;  EAO rejected BC Hydro’s voluntary opt-in request.  CEAA:  DFO concluded no HADD if mitigation measures are followed;  Transport Canada advisory opinion that Project will not increase interference with navigation.  No amendments to Conditional Water Licenses or Water Use Plan;  Only material regulatory approval is Certificate of Public Convenience and Necessity (CPCN) from the BCUC. 3

CPCN Application Overview APPLICATION STRUCTURE  Application structure largely follows BCUC CPCN Guidelines;  Chapter 1 – Introduction:  Order sought and why BC Hydro is applying for a CPCN (Section 1.1);  Implications of Clean Energy Act (Section 1.1);  BC Hydro’s past project experience (Section 1.3);  List of Appendices (Section 1.5).  Chapter 2 – Project Description and Impacts:  Existing Facility (Section 2.1);  Project Scope (Section 2.2);  Cost Estimate, Schedule and Rate Impact (Sections 2.4 – 2.6);  Environmental and Social Impacts (Sections 2.7 and 2.8). 4

CPCN Application Overview APPLICATION STRUCTURE (Continued)  Chapter 3 – Project Justification:  Condition of Dam and Powerhouse (Section 3.2.1);  Project needed to meet Load/Resource Gap (Section 3.2.2);  Project Alternatives (Section 3.3):  Long-Term: 5 Alternatives (2 De-Rate and 3 Decommissioning);  Short-Term Deferral to implement either the Project or 2 De-rate or 1 Decommissioning.  Alternative Means of Carrying Out the Project (e.g. 2 versus 3 units) (Section 3.4).  Chapter 4 – First Nations Consultation and Public Engagement  Chapter 5 – Project Risks and Risk Management:  Definition Phase (Section 5.2);  Implementation Phase (Section 5.3);  Operation phase (Section 5.4);  Summary (Section 5.5). 5

CPCN Application Overview ORDER SOUGHT  Set out in Appendix A; reporting requirements similar to other projects;  Pursuant to subsection 46(1) of the Utilities Commission Act , BC Hydro filed its application for the BCUC to grant a CPCN to construct and operate the Ruskin Dam and Powerhouse Upgrade Project (Project);  BC Hydro seeks a CPCN on the basis of, amongst other things, the Authorized Amount. This is also consistent with BC Hydro’s Capital Project Filing Guidelines:  The form of the BC Hydro Board of Directors authorization informs the Application. 6

Facility Overview HISTORY OF RUSKIN  Dam and Powerhouse Unit 1 Original 1930 Construction originally constructed in 1930;  Second and Third Units constructed in 1938 and 1950;  No major refurbishments have been carried out since original construction;  Seismic and structural deficiencies require that extensive investment is required to ensure safety and reliability of Ruskin. 7

Facility Overview RUSKIN TODAY Right Abutment Dam Left Abutment Powerhouse and Switchyard 8

Facility Overview BENEFITS PROVIDED BY RUSKIN  Dependable capacity of 105MW;  Average annual energy output of 348 GWh, 88 per cent of which is firm;  Located in the Lower Mainland, which accounts for about 70 per cent of BC Hydro’s Load;  With the benefit of the combined storage capacity of the Stave River System reservoirs, Ruskin is able to provide the following additional benefits:  Dispatchability, which can be used to meet peak load requirements and to respond to short term variations in load or resource balance;  On-call reserve support or the ability to reduce output for BC Hydro as it seeks to integrate increasing amounts of intermittent clean or renewable energy.  Provides dependable voltage and local reactive power (VAr) support for the Lower Mainland 69 kV transmission network and electrical system. 9

Facility Overview RUSKIN DAM DEFICIENCIES Right Abutment  Consists of highly erodible soils;  Both seismic and static deficiencies have been identified:  Efforts to date to mitigate sand erosion have only been partially successful;  Damage to the Right Abutment seepage barrier of could occur at an earthquake return period of less than 1 in 475 years. Left Abutment  Portion behind the Powerhouse is steep and unstable and could fail following a major earthquake with a return period of less than 1 in 2,475 years, which is below CDA guidelines for an earth embankment. Spillway Gates  Seismic deficiencies in the existing spillway gates, piers, and roadway of the Dam where cracking of structures could occur with ground motions of 0.12 g (an event with an expected return period of 1 in 100 years). 10

Facility Overview RUSKIN DAM – CONSEQUENCES OF FAILURE  The Ruskin dam is categorized as “Very High Consequence”, meaning that the downstream impacts of a dam breach may include loss of life, and significant financial and environmental damage;  A seismic event could result in dam or abutment damage. The level and extent of damage could include dam or abutment failure and uncontrolled release of the reservoir;  If Spillway gates or spillway gate piers are damaged in an earthquake, BC Hydro could lose the ability to pass water during a post-earthquake drawdown or during a MDE, which could lead to overtopping and dam failure;  BC Hydro has undertaken a number of actions in recent years to mitigate dam risk (section 2.3); in particular, an operating restriction was put in place in 2005 to limit the maximum operating level of the reservoir to El 41.4 m (a 1.5 m reduction) which impacts both the environment and public use of the reservoir. 11

Facility Overview CONDITION OF THE POWERHOUSE Deficiencies  Powerhouse structure and/or Left Abutment (behind the Powerhouse) do not meet seismic standards and could collapse in a large earthquake;  Major generating components, including the turbines and generators, exciters, governors and transformers (located between the Powerhouse and Left Abutment) are in poor to unsatisfactory condition;  Switchyard, located on the Powerhouse roof is a circa 1930’s design and does not allow maintenance work to be performed at the switchyard without a full station and transformer line outage, and poses safety risks to worker safety (limits of approach);  Third party consultant RW Beck found that the major generating components “[have] well exceeded [their] expected useful life” and that the performance of the Powerhouse equipment has been declining. 12

Facility Overview CONDITION OF THE POWERHOUSE Consequences of Failure  Collapse of the Left Abutment or Powerhouse building could result in injury/death, the loss of generating output from Ruskin, and environmental consequences;  A failure in one or more of Ruskin’s three generating units will likely result in an outage of more than a year with increased costs and could result in environmental impacts;  RW Beck found that “there is a high likelihood of a major equipment failure that could cause personal injury as well as extended outage and result in extensive repair and replacement costs”. 13

Project Overview PROJECT OBJECTIVE  The Scope of the Project is to correct dam safety deficiencies and replace or rehabilitate powerhouse equipment and ancillaries to extend the facility life by at least 50 years;  Given the extent of work being undertaken by the Project, BC Hydro has not currently identified any need to undertake significant future capital expenditures at the Ruskin Facility in the short to medium term. 14