VANCOUVER, British Columbia (Reuters) - Shares in a bunch of Canadian green energy companies slumped on Tuesday after a surprise regulatory decision created uncertainty about the future of dozens of clean power projects being developed in the West Coast province of British Columbia.
The companies, which aim to produce electricity from renewable sources such as wind, water or biomass, have been waiting for over a year for the province’s power utility to announce the winners of long-term electricity contracts.
The results were expected any day now by applicants such as run-of-river hydro power producer Plutonic Power Corp and Naikun Wind Energy Group Inc. But an unexpected decision from provincial regulators now threatens to delay, change the terms of, or even scupper BC Hydro’s power call.
Late on Monday the British Columbia Utilities Commission, which regulates BC Hydro, unexpectedly rejected the power utility’s long-term business plan, which includes its proposal to buy clean electricity from small, independent producers.
The commission took issue with several areas of BC Hydro’s plan, including whether they met the provincial government’s requirement to meet self-sufficiency in electricity by 2016.
“Had the (Long-Term Acquisition Plan) been approved...BC Hydro would have been ready to announce the winners very quickly,” said Tom Hackney, vice-president for policy at the BC Sustainable Energy Association.
“Under these circumstances there is a lot of uncertainty,” he told Reuters.
Macquarie Research analyst Steve Harris said that while the language in the utility commission’s report is “somewhat ambiguous” his interpretation is that the clean power call is “dead”.
But Paul Taylor, chief executive of applicant Naikun, said that in his discussions with provincial government officials on Tuesday it was clear that they are committed to the clean power call and the province’s energy plan.
“In my view it’s full steam ahead,” Taylor told Reuters.
Provincially owned BC Hydro, Canada’s third largest electric utility, declined to comment. The BC Ministry of Energy, Mines and Petroleum Resources was not immediately available for comment.
BC Hydro is mandated to make British Columbia self-sufficient in electricity by 2016. Its clean power call netted 68 proposals from 43 parties for 17,000 gigawatts of annual power output.
Hackney said that, from a practical perspective, BC Hydro is the only possible customer for the bulk of the developers.
“For most of these producers, if they don’t achieve a contract with BC Hydro they would not have an effective project,” he said.
Shares in Plutonic Power Corp, one of those most widely expected to secure an electricity purchase agreement, dived 25 percent to C$3.08 on the Toronto Stock Exchange.
Naikun, which is developing Canada’s first wind energy project off the northwest coast of British Columbia, fell 7 percent to 63 Canadian cents on the TSX Venture Exchange.
Run of River Power Inc, a small company producing hydroelectricity for about 4,000 homes, shed 11 percent to 15.5 Canadian cents.
Other publicly-traded Clean Power bidders include Canadian Hydro Developers Inc, Finavera Renewables Inc, and Swift Power Corp.
Reporting by Nicole Mordant; editing by Janet Guttsman