First Nations invest in Vancouver Island natural gas facility
FortisBC has strong relationships with provincial First Nations
Mt. Hayes natural gas storage facility near Ladysmith, BC. Photo: FortisBC
By Markham Hislop, editor
A BC utility is partnering with two Vancouver Island First Nations in a business venture that will provide local aboriginal people with ownership in a natural gas storage facility.
FortisBC, which serves 1.1 million customers in 135 B.C. communities, has negotiated a unique ownership structure for the venture with Stz’uminus (Chemainus) First Nation and Cowichan Tribes in the Mt. Hayes natural gas storage facility, located near Ladysmith.
The limited partnership, signed on Jan. 1 for Mt. Hayes Storage LP, will see the Stz’uminus First Nation and Cowichan Tribes each invest $5.7 million (7.5 per cent in the partnership equity interest) in the project. Mt. Hayes Storage LP will lease the facility back to FortisBC under a long-term agreement.
“This partnership is a continuation of the long-standing relationship Cowichan has enjoyed with FortisBC since the early 90s. The opportunity will provide economic benefits to Cowichan for the next 40 years, which will directly impact member services and other Cowichan initiatives. We are pleased and honoured to be a part of this unique partnership,” said Cowichan Chief Alphonse.
“Stz’uminus First Nation continues to build and value our strong relationship and partnership with FortisBC. Our investment in the liquefied natural gas facility will create economic prosperity and benefits for our community’s future,” said Stz’uminus Chief John Elliott.
Along with FortisBC, the Stz’uminus First Nation and Cowichan Tribes will each receive a regulated rate of return on equity, as approved by the British Columbia Utilities Commission on June 28, 2011, and also have representation on the partnership’s board of directors, which will guide ongoing operations.
FortisBC doesn’t have a template for First Nation economic development projects, says Bruce Falstead, manager of First Nations Initiatives, but does follow a general approach that includes building a long-term relationship with the community and its leaders, and assisting with the development of local management capacity. The company recognizes that First Nations often don’t have the expertise or experience to negotiate sophisticated business deals. FortisBC provides resources to help Band members acquire necessary skills or sometimes an outside consultant will be hired.
“We look for opportunities to provide First Nations with reasons to participate with us in whatever we’re doing so they can generate more own-source revenue,” he said. “We don’t have a policy, we have an approach. That approach is early contact…we don’t presume that they have the financial means to engage with us.”
Falstead says that engaging in a meaningful process with First Nations is key. FortisBC spends time at the front of the project talking with community leaders and explaining what the impacts will be of a project, and incorporating feedback into project design. The company and the Band also identify business and other opportunities that First Nations entrepreneurs and works can take advantage of.
FortisBC enjoys significant benefits from its First Nations partnerships, says Falstead.
“These are groups that have influence over large tracts of land, basically all of British Columbia has an aboriginal interest attached to it, so having them up to speed and on board can only serve us in the long run,” he said.
The facility has created substantial economic and employment benefits, including an investment of approximately $70 million in the region. This is due in large part to FortisBC sourcing local suppliers for goods and services, the company said in a press release.
The 20 hectare Mt. Hayes facility is located approximately six kilometres northwest of Ladysmith. The storage facility, supplied by FortisBC’s existing pipeline systems, will help meet current and future gas demands throughout FortisBC’s service territories.
The storage tank holds 1.5 billion cubic feet of liquefied natural gas, with the structure measuring approximately 60 metres in diameter and about 50 metres high. Construction at the site began three years ago, and the facility came into service late 2011.
“The Mt. Hayes facility is a unique opportunity for this partnership structure. While the facility is integrated into our system, it is in effect a self-contained site that lends itself to this ownership structure. In addition, FortisBC has a long-standing relationship with the Stz’uminus First Nation and Cowichan Tribes, who contributed positively to the development of the facility,” said Roger Dall’Antonia, vice president, strategic planning; corporate development and regulatory affairs.
FortisBC supplies natural gas, electricity, propane and alternative energy solutions, while employing more than 2,300 British Columbians. FortisBC is a subsidiary of the largest investor-owned distribution utility in Canada. It owns and operates four regulated hydroelectric generating plants, approximately 7,000 kilometres of transmission and distribution power lines and approximately 46,000 kilometres of natural gas transmission and distribution pipelines.
Category: First Nations
About the Author (Author Profile)
Markham began his journalism career writing columns in the mid-1980s for Western People Magazine, then reported for a small Saskatchewan daily. He has spent most of his career in media and communications, likes to dabble in politics, was actively involved in economic development for many years, thinks that what goes on in the community is just as important as what happens provincially and nationally, and has a soft spot for small business (big business, not so much). Markham is a bit of a contrarian and usually has a unique take on the events of the day.
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