Friday, December 11, 2009

Opposition to Teck Resources sale of Waneta Dam to B.C. Hydro

There seems to be a consistent pattern of opposition to this sale from diverse parties around British Columbia. I first wrote about this transaction in November. The terms and specifics of the deal seemed really bizarre to me at the time, especially having just read detailed descriptions of Hydro Quebec's recent deal to purchase NB Power. In short, Teck Resources is getting a lot more ($825 mil) for a 1/3 share in this asset than some verifiable market comparables would suggest as fair value.

The status of the sale at present is that it is going through the approval process at the B.C. Utilities Commission.

The so-called B.C. Hydro Final Argument document was filed with the BCUC on December 9.

In that document, the justification for the price on the transaction is rather weak, based mostly on speculative estimated costs of future alternatives for B.C. Hydro and speculation about whether Teck Resources would accept a lower price.

If you go to the BCUC link you will find links there to all the official submissions that have been made to date. There are dozens of them there. Most of the ones that I saw were opposed to the sale.

The MLA for Nelson Creston, Michelle Mungall, wrote about this issue on her blog Dec. 1.

I will continue to follow up on this matter as it unfolds.

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