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Province grants tax relief for IPPs

Water flows into state of the art kayak facilities at Rutherford Creek Power Project

The provincial government is encouraging the development of more independent power projects by offering small power producers a large break on their property taxes.

The proposed tax relief was announced on Monday morning as the switch was officially turned on the Rutherford Creek Power Project, which sent water rushing into the brand new kayak park on the banks of the creek.

"By providing this additional tax relief to IPPs we’re promoting investment in stable, reliable, clean energy sources for all British Columbians," said Barry Penner, the MLA representing Chilliwack-Kent, who was at Monday’s announcement at Rutherford Creek.

Penner, who has a personal interest in the power business, was speaking on behalf of B.C.’s Energy Minister Richard Neufeld and Finance Minister Gary Collins.

"Private investors will be better able to access and develop new energy resources while communities will reap the benefits of economic development and environmental improvement," he said.

For the Rutherford Creek power producers, the tax relief represents savings of more than half a million dollars, as the company’s property taxes shrink from roughly $1.2 million to $500,000.

"Rural area and any applicable municipal property taxes would remain unaffected, I want to assure you of that," said Penner.

"So it will be the province that will be taking up the slack."

Even with this reduction however, the project still contributes approximately $1 million per each year to the province in taxes, water rentals and Crown land leases.

The enticement to develop more projects could have large ramifications in the area, as the Squamish-Lillooet Regional District is a hotspot for IPP production.

"We’d like to see a master energy plan," said SLRD Chair Susan Gimse who has been critical of IPP projects in the past but also attended the Rutherford Creek ceremony.

This plan she said could identify the long-term goals in the area and would ensure that the regional district and other local government agencies don’t have to deal with the run of river applications on a piece by piece basis, as they have been doing historically.

That’s a key underlying issue for local kayakers too, as they fight to keep small run of river projects off their favourite creeks and rivers.

The Rutherford Creek was identified as one of their top 10 rivers to kayak in the Sea to Sky corridor.

Kayakers worked out a deal with the Rutherford Creek power producers to build an Olympic calibre kayak park next to the creek in exchange for losing the creek runs.

"I think (it) will be a major addition to B.C.’s infrastructure of sports facilities," said David Andrews, president of Rutherford Creek Power Project.

"I do hope we see some Olympic gold medals when it comes to Beijing, resulting from this particular project."

Though the water is in place, kayakers will not be paddling in the park until the spring.

Stuart Smith, rivers projects co-ordinator with the Whitewater Kayaking Association of British Columbia, said some of the features in the park are a little too aggressive and need a little fine-tuning.

In addition, the powerhouse is missing one of its turbines and as such, the park can only reach half of its potential water levels.

Smith said they would like to test the park when they can test all water levels.

After that the course, which will be called the Cloudworks Whitewater Facility, will be open to the public.

"We’ve yet to establish all the protocols," said Smith.

"Anybody who wants to use the facility is going to have to be covered under our insurance so that means they have to become a member (of the WKABC)."

Smith said the WKABC would likely have a schedule of water releases so some days the park could have low water flow and other days it could have higher, more challenging levels.

"We hope in the end it’ll be a good thing," said Smith cautiously, adding that there have been some critics of the deal within the paddling community.

"I guess we’re all still a little nervous because who knows if the whole thing (will) work out and (if) we made all those compromises for something that doesn’t work, we’ll all be disappointed. At this point we’re still on track to see how it goes."

Over an average year the Rutherford Creek project will produce enough energy to power roughly 17,000 homes.

A buried pipeline takes water from the creek and funnels it down 360 vertical metres to turbines in the powerhouse.

After it produces energy the water is either re-diverted back into the creek or down the one-kilometre long kayak facility and then back into the creek.

The government will provide partial property tax exemption for the penstock system (the underground pipeline) of the run of river projects.

The proposed exemption would begin in the 2005 tax year for all run of river projects that begin production after Dec. 31 2003.

"Currently independent power producers supply about 10 per cent of all electricity in our province," said Penner.

"Over time this amount is expected to increase gradually.

"In order to build a prosperous and stable foundation for British Columbia, we need to make sure we get more electricity production online."