MONTREAL - Alcan Inc. said Friday freedom to sell surplus power from its Kemano hydro turbines is critical for the planned $1.8-billion US modernization of its Kitimat aluminum smelter in northern B.C.
The actual amount of surplus power to be sold to BC Hydro over 20 years will decline as the project moves into production in 2014 at an annual rate of 400,000 tonnes, up from the present 275,000 tonnes, Alcan said. It might later absorb all Kemano's capacity.
The Kemano reservoir levels can vary widely according to rainfall and snow runoff, as has happened in the past, adding a further risk to the project.
Selling the surplus power is an essential part of the project's economics, said Anik Michaud, director of media relations. Alcan cannot justify the Kitimat investment without being sure it can sell the surplus at market rates.
Alcan will not reveal Kemano's actual production cost.
The British Columbia Utilities Commission last week rejected Alcan's long-term power pact with B.C. Hydro, claiming it was not in the public's interest but promised to disclose its full argument later this month. Alcan is studying the decision.
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