More than $1 billion cash was going to exchange hands, no matter the buyer.
With Fortis out and BC Hydro in - what does this latest development mean for the greater community and its economic driver, Teck Trail Operations?
The Trail Times reached out to Trail Mayor Mike Martin and asked him to weigh in on BC Hydro’s plan to gain full ownership of Waneta Dam once its purchase of Teck’s remaining shares is completed next year.
At the end of the day, he maintains it’s much more palatable to keep the power in the province.
“Recognizing the fact Teck had put the Waneta Dam up for sale,” he began. “The best possible outcome would be for the dam to be purchased by the province through BC Hydro rather than a private sector and unregulated entity.”
For 60-plus years, the Trail smelter has been integrally linked to the local production of power at Waneta and its associated low power costs.
“Our concerns with regard to the sale of the Waneta Dam revolved around the sustainability of Teck Trail Operations along with the possible transfer of ownership of a public resource to a private sector and unregulated firm,” Martin said.
“The sale of the remaining two-thirds of the Waneta Dam and the known financial arrangements leads to the erosion of the low power cost resource and this could significantly hamper the operation of the smelter and its long term sustainability.”
Council’s interest is to ensure the continuing viability of the smelter to the extent possible, given its economic impact on the City of Trail, the region and the Province of BC, Martin continued.
“As one of the largest industrial facilities in the province, the smelter operation affects the livelihood of thousands of people through both direct and indirect employment and supports of all levels of government,” he emphasized.
“It is of immense economic and social importance to the City of Trail, the Lower Columbia and entire West Kootenay.”
With backing from the Regional District of Kootenay Boundary, leaders in the East End region sent correspondence to the province last month, asking the soon-to-be formed government to support the BC Hydro transaction.
“A letter was sent to John Horgan as Premier–Designate and once the cabinet was in place, letters were sent to both Honourable Michelle Mungall, Minister of Energy, Mines and Petroleum Resources and Honourable Katrine Conroy, Minister of Children and Family Development,” Martin confirmed.
“Encouraging them to support the position of BC Hydro exercising its option to purchase the balance of Waneta Dam and thereby retain public ownership of a critical resource.”
Martin says this option is far more likely to ensure that power generated at the Waneta Dam would continue to be provided to the smelter at rates that will ensure the Trail plant’s long term future.
“Through public ownership there exist options that might not be available or possible with private sector ownership.”
Unlike the first bid of purchase which left the city feeling blind-sided, Martin says MLA Conroy reached out with a personal call of the news once an embargo was lifted.
He said, “We would like to recognize the work and support of both Minister Katrine Conroy and Minister Michelle Mungall in recognizing both the criticality of the matter and its time sensitivity.”
Council’s main interest is to ensure the city continues to build a strong and vibrant community.
“As such, this can only be accomplished with a strong economy and Teck Trail Operations is such a significant part of that for not only the city but also our entire regions,” he added.
“There are 1,500 direct jobs with an estimated number of thousands beyond that providing goods and services in support of this major industrial complex, all of which contributes to success of our community and region.”
With so much uncertainty still swirling about the future of Trail operations, the Times asked Martin what he could say about the community’s apprehension.
“There is no doubt that the sale of the Waneta Dam is concerning and not ideal from a community perspective,” he said.
“Many communities have faced similar challenges and we are no different in this regard.”
He pointed to a characteristic that remains prevalent in the Trail area.
“We have proven ourselves to be most resilient in overcoming numerous past challenges,” Martin shared. “And I have no doubt that with our strong resolve and community pride we will succeed in addressing this challenge.”
Our community and the whole region is highly dependent on this major employer and the impact of the increased power prices needs to be mitigated, he explained.
“The sale of Waneta to BC Hydro provides us with the best opportunity to influence and shape an arrangement that protects the sustainability of the smelter to the extent that it is dependent on low cost power.”
However, Teck needs to continue, as it has done in the recent past, to make substantial capital investments into the facility.
“And (we) have received assurance that this will continue,” Martin noted.
“In addition, with my limited knowledge having been away from an active role at Trail Operations for a number of years, there still exist further efficiency improvements and diversification opportunities. These are not likely substantial but need to be vigorously pursued. The operation has a long history of innovation and continuous improvement and there is no reason this world class facility cannot be successful for many years to come – if not another 100 years.”
The impending sale is required to go before the BC Utilities Commission (BCUC), and Martin says the city is fully prepared to engage in the process in support of the BC Hydro sale.
He acknowledged the statement that came from a previous BCUC meeting, “(public interest) required that the continuation of the Teck industrial operation at Trail, to the extent that is dependent upon a long term source of inexpensive electricity, should not be impaired and remains a consideration.”
“As the sale process unfolds, this factor cannot be lost on either the province or BC Hydro,” Martin said.
“And I believe it is our job to bring about the necessary attention and focus to this element.”
He also noted the BCUC’s recognition, “there is a large element of public interest inasmuch as the rivers and water flowing in the rivers are public resources.”
“Our job is also to work with government and in particular our MLA,” Martin concluded.
“To ensure there are mechanisms that allow some flexibility is establishing appropriate power prices into the future and thereby protecting the jobs and economy of our region.”