The City of Williams Lake is fighting to save a biomass power plant there that is set to go dark in the coming weeks, partly due to a lack of affordable fibre, which has become an all-too-familiar refrain in B.C. for sawmills, pulp mills and other wood processing businesses.
The Atlantic Power plant in Williams Lake burns wood waste to generate about 66 megawatts of electricity annually, enough to power about 50,000 homes.
Atlantic Power – acquired in 2021 by Squared Capital -- was among the many independent power producers that built renewable energy projects in the 1990s through electricity purchase agreements (EPAs) with BC Hydro.
Electricity from wood waste is considered renewable since the waste it uses is burned anyway. Prior to plants like Atlantic Power being built, wood waste from logging in B.C. was burned in beehive burners, and to this day, tonnes of wood waste from timber harvesting is still burned in slash piles, generating nothing but smoke and ash.
Many of the EPAs signed in the 1990s expired a few years ago, and some were never renewed. Atlantic Power managed to get a 10-year extension to its contract in 2019, giving it until 2029 at least.
But the company that owns the plant announced one year ago that will have to shut down, as it will no longer be economic to operate, due to fibre insecurity and insufficient electricity rates from BC Hydro.
Local politicians in Williams Lake argue that the rates offered to Atlantic Power do not take into account the inflation that has increased Atlantic Power’s operating costs.
They say only way to save the plant from shutting down is if BC Hydro increases the rates it pays for power, and that it makes no sense to be shutting down a renewable power source at a time when B.C. has been importing electricity, due to drought affecting hydro dam reservoir levels.
"I've talked to other plants that have very similar concerns that BC Hydro just simply will not in a fulsome way renegotiate those contracts," said Lorne Doerkson, the BC Conservative MLA for Cariboo-Chilcotin.
"Although I cannot confirm this -- because so many of these agreements are not for public consumption -- it appears that they're actually paying more for power from Washington and Alberta than they are willing to pay a company like Atlantic Power."
The power plant is Williams Lake’s single largest industrial taxpayer, said Williams Lake Coun. Scott Nelson -- providing $1.7 million in taxes to the city annually.
It’s also a major employer. The plant itself employs close to 50 people, Nelson said, but in total supports a total of about 150 jobs directly and indirectly, including through contracts with wood suppliers.
“They have a litany of First Nation contractors as well that they work with underneath the banner of supplying fibre,” Nelson added. “So it would be a significant and dramatic punch to the gut for Williams Lake if we lost this.”
At the beginning of January last year, the company gave a12-month notice that it would be shutting the power plant down. It got an extension, allowing it to continue running for another couple of months.
But unless it can get a better rate for its power and assurances of a fibre supply, Williams Lake council has been told the plant will shut down by the end of the first quarter.
Nelson said Williams Lake council has been assured by Premier David Eby that he has four of his ministries working on trying to prevent that from happening. The council has urged BC Hydro to reopen its contract with the company to provide a more favourable rate.
In a January 21, 2024 letter to Eby, Williams Lake Mayor Surinderpal Rathor made an “urgent appeal” to the premier to direct BC Hydro to reconsider the rates it pays to Atlantic Power through its EPA.
“I understand that BC Hydro is an independent Crown corporation that makes its own decisions,” Rathor writes. “I would urge your government to provide it with direction that will help to support our infrastructure here in British Columbia.”
As for access to fibre, the problem is not necessarily a lack of wood waste. Tonnes of wood waste are burned in slash piles every year in B.C. after an area is logged, because there’s simply no economic incentive for loggers to collect and deliver it to those who can use it.
“When we talk about fibre, it’s a matter of economical fibre,” Doerkson said. “There isn’t a lack of fibre. Their challenge is finding economically usable fibre. There are multiple cull piles around the community within an hour’s drive. Many of those piles are often burned.”
It's not just a problem for bioenergy -- pellet and pulp plants in B.C. have also been facing a shortage of wood waste, despite the fact there is no shortage of it.
“I have been trying to understand what part of legislation actually is creating this nightmare where we have logging companies and forestry companies that are actually burning this fibre rather than us making use of it,” Doerkson said.
BIV has reached out to the Ministry of Forests for an update on its efforts to ensure a reliable source of fibre for the power plant.
