The Island Generation Facility Exemption Regulation, made by B.C. Minister of Energy and Climate Solutions, supports the planned acquisition of the Island Generation electricity facility in Campbell River by BC Hydro. Made under section 22(2) of the Utilities Commission Act, the regulation provides targeted exemptions from regulatory requirements to facilitate the transaction and establish a new electricity supply arrangement following the acquisition.

Island Generation is a 275-megawatt natural gas-fired combined-cycle generating facility and is the largest single power-generation facility on Vancouver Island, representing about one-third of the Island’s generation capacity. The facility has supplied electricity to BC Hydro under a long-term electricity purchase agreement and has an established role in supporting regional reliability. Although it operates infrequently, the facility has been used for approximately 15 days per year on average over the past five years when additional generating capacity was required.

The regulation specifically exempts BC Hydro, referred to as the “authority,” V.I. Power Limited Partnership, Capital Power Limited Partnership, Capital Power Generation Services Inc. and 1597798 B.C. Ltd. from Part 3 of the Utilities Commission Act, except section 22, in connection with the acquisition. The exemption covers an agreement under which the authority will acquire V.I. Power’s beneficial interest in the land and buildings comprising the facility, Capital Power Generation Services’ legal interest in those properties, and Capital Power Limited Partnership’s legal and beneficial interest in V.I. Power Limited Partnership.

The regulation also covers a related transaction following the closing of the acquisition. Under that arrangement, 1597798 B.C. Ltd. will acquire Capital Power Generation Services’ remaining legal and beneficial interest in V.I. Power Limited Partnership, other than the interest transferred as part of the primary acquisition.

In addition, BC Hydro and V.I. Power Limited Partnership are exempt from section 71 of the Utilities Commission Act for an energy supply contract that becomes effective on or after completion of the acquisition. The contract will establish the terms and conditions under which electricity generated at Island Generation is sold by V.I. Power Limited Partnership to BC Hydro.

The acquisition is intended to strengthen electricity reliability on Vancouver Island while providing capacity that can be called upon during periods of peak demand. Recent forecasts indicate that B.C. will require additional generating capacity sooner than previously expected because of population growth, electrification and expanding industrial activity. Island Generation can provide dependable capacity during high-demand periods, including exceptionally cold weather, while BC Hydro develops additional clean-energy resources.

British Columbia (291/2026
Disclaimer: Insights are for informational purposes only and does not reflect RRI’s official position or constitute legal opinion.