PEI Electricity Plant Will Be

Charlottetown, PEI -- - A plan to build a gas-fired electricity plant in P.E.I. is far from reality but already Development Minister Mike Currie is hinting the project is going to be much bigger than first planned.

At the provincial legislature Tuesday, Currie said the province is now looking at expanding its initial plans to build a 200-megawatt gas-fired electricity plant on the Charlottetown waterfront.

Currie said the province is looking at the larger plant so it can be in a position to sell power to neighbouring provinces as well as to New England.

How much the expanded plant will cost is not known.

The province has indicated the 200-megawatt plant would cost $180 million with another $100 million needed to build the pipeline under the Northumberland Strait to bring natural gas to the Island.

Currie said P.E.I. is the only province looking at new electrical generation, but that's not necessarily the case.

New Brunswick said Tuesday it is looking at constructing a second nuclear power plant which would produce 700 megawatts of electricity, more than three times the proposed P.E.I. plant, and they've also discussed a $845- million refurbishment of the existing Point Lepreau nuclear plant.

"Nobody else is even considering new electrical generation in Atlantic Canada so this is a good opportunity for the province to build and increase their capacity now so that it's there and we can sell it," Currie told reporters.

"The rest of the partners have to agree to that, but it's the opportune time to bring that onside now."

There has been a lot of discussion about bringing natural gas to the Island but not a lot of specifics to date.

After much debate, Currie tabled the term sheet which the province signed with EnCana, the company which is supposed to supply natural gas to the province.

However, it didn't shed much light on the deal.

Every page of the document was blanked out, citing confidentiality.

Currie said he provided the document to prove it exists. He said the exact details will be released if and when the National Energy Board holds hearings on bringing natural gas to the province.

"There's terms and conditions there that are commercially sensitive and we've agreed not to release them. We do not want to kill the deal."

Currie is also vague on timelines.

In an earlier interview with The Guardian, he said despite the setbacks he was confident the electricity plant could be in place by 2006.

In the legislature Tuesday, he acknowledged it will be at least 2007 before a plant can be up and running.

Opposition Leader Ron MacKinley said he questions whether natural gas will ever be in P.E.I.'s future.

EnCana has called a time out to its Deep Panuke project 250 kilometres southeast of Halifax because they're not sure if it's viable. Deep Panuke is where P.E.I. is supposed to get its gas.

MacKinley spent most of question period Tuesday trying to pin down how much bringing natural gas to the province is going to cost taxpayers. He said Islanders are already being forced to pay 13 per cent more in their electricity rates.

The Island removed the cap on electricity rates April 1 so Maritime Electric would be in a better financial position to build the new electricity plant.

"The minister has no idea, no vision. How much will this minister's so-called vision cost us? Islanders are spending millions extra for electricity costs and what have they got in return?" asked MacKinley.

"This premier and the minister two years ago said trust us, trust us. And what have we got? We've got higher rates and nothing more than empty promises."

Currie said the province now has a long-term plan for electricity generation

"I can assure Islanders that at least I know that we have a plan in place. Had we relied on the former government, we'd have no electricity here now. We had to make some changes, yes; their unfortunate, yes; but that is reality."

Currie also said during question period Tuesday that it should not cost taxpayers anything to bring natural gas to the province, noting that the costs will be picked up by the users.

However, documents obtained by The Guardian tell a much different story.

A consultants report, prepared in June 1999, said demand for natural gas on the Island is insufficient and that taxpayers would have to pay either directly through an 18-cent surcharge or by direct subsidies from the province.

"Even with an 18-cents surcharge, which would hasten the break-even period by only five to six years, natural gas would be non-competitive with furnace oil . . .," the document reads.

It goes on to say the province could help cover the cost of construction which would cost taxpayers $28.9 million if the pipeline was to be extended to Charlottetown or cover any shortfalls the pipeline operator may have.

"For the option of having the . . . pipeline to the Charlottetown waterfront, the sum of the estimated annual shortfalls, at $31.2 million, is a more expensive alternative than the provision of an aid to construct," the document says.

MacKinley said Currie is way in over his head and he worries about what financial position the province may be in if the development minister goes ahead with plans to bring natural gas to P.E.I.

"They started with a 50-megawatt plant, they went to 200 megawatts to supply all of Prince Edward Island, now they want to supply the whole world. It's a bunch of B.S., what they're doing on the floor of the house," said MacKinley.

"Their plan is not to tell Islanders the truth, to try to lead Islanders down the golden path."