The BCUC Says What?...in its LTAP Decision
The BCUC's decision on BC Hydro's 2008 Long Term Acquisition Plan released on Monday shocked the BC renewable energy industry as the BCUC rejected BC Hydro's 2008 LTAP, calling it "not in the public interest" and ordered that BC Hydro deliver a new LTAP no later than June 30, 2010.
While the BCUC's decision spells uncertainty for the Provincial Government's 2007 Energy Plan, its related greenhouse gas reduction targets and the renewable energy industry as a whole, it is not, in my view, a death knell to BC's climate plan and the developing green energy economy. It is a set back, most definitely, but hopefully, and I fully expect it to be, a temporary one.
Currently in this Province, there are billions of investment dollars eagerly awaiting the results of BC Hydro's clean power call - to build run-of-river, wind and biomass power projects. The 43 proponents in the CPC bid a total of 17,000 GW/h per year of clean GHG reducing green energy projects into the Call. The Provincial Government cannot, and I expect it will not, ignore this, especially in the current economy.
It is interesting to see the BCUC essentially remain status quo on the electricity make-up of the Province, even proposing that the capacity of BC Hydro's Burrard Thermal natural gas fired generation station be increased, putting Ol' Wheezy's social license to the test, in my view BC Hydro's Clean Power Call is not dead. Specifically, here's what the BCUC's decision said about that:
That notwithstanding, it is clear that BC Hydro has the scope, with or without Commission endorsement, to enter into such EPAs as it contemplated in the 2008 CPC. The Commission Panel finds that the appropriate forums within which the prudency of BC Hydro's decisions, and expenditures in that regard, if any, should be canvassed are, respectively, a section 71 proceeding and a revenue requirements proceeding, pending its next LTAP Application.
Clearly, the future of the CPC remains in the grasp of BC Hydro, and its sole shareholder, the Provincial Government. In my view, there is nothing in the BCUC's decision that would prevent BC Hydro from completing the CPC in the ordinary course, although I would expect it to pursue the lesser 3,000 GWh rather than offered 5,000 GWh, based on its arguments in the LTAP. How it gets there, I think also depends in part on how much BC Hydro and the various CPC proponents are prepared, in the short term, to argue the merits of their respective projects at a section 71 (of the Utilities Commission Act) hearing or future revenue requirement application. A section 71 hearing before the BCUC on each EPA awarded was always part of the CPC. But now, given the BCUC's decision, the section 71 hearings would take longer and be slightly more contentious.
The way I see it, this is the opportunity to put the BC Government's green energy and climate change policies into law in this Province. In fact, given the BCUC's decision, now is the time for a comprehensive but specific renewable energy and climate change piece of legislation, such as Ontario's Green Energy Act, which would spell out in clear, the government's green energy and climate change goals. If British Columbia is truly going to be a renewable energy powerhouse, now is the time to show it. It is painfully obvious that the current blend of government policy, special directions from cabinet and spotty legislation has failed, and it must be corrected immediately with direct and comprehensive legislation. And while we're at it, let's also get the federal government on board with a national green energy law.
So where are we at now? At this stage there are too many questions which need answers from BC Hydro and most importantly, the Provincial Government. The Province simply cannot allow BC Hydro cancel the clean power call, even in light of the BCUC's decision. What is clear and hasn't changed is this: the BC Energy Plan and Special Direction No. 10 requires the Province to be electricity self-sufficient, plus 3,000 GW/h of insurance, by 2016, and the Province's climate plan mandates a reduction of GHG emitting electricity generation. Your typical large scale renewable energy project takes approximately 4-6 years to build, so to put the CPC on hold, for even short time, would put the Province's electricity self-sufficiency goals and its climate agenda in serious jeopardy. I highly doubt the Province will let that happen. Stay tuned, there is certainly more to come on this most interesting and developing story.
Here is some of the commentary on the BCUC's decision:
- From our friends at ZeroCarbonCanada.
- Vaughan Palmer in today's Vancouver Sun,
- Today's Globe and Mail, and
- the Canadian Wind Energy Association
As an employee of BCH my comment is based on some internal perspective. However my comments are based on my private opinion not a company one.
Its been confusing over the past number of years to not have a clear path. The site C plan and eventual construction is in my opinion the first place to start. It will allow BCH to meet some heavy future demands and to utilize a water body already providing a good portion of the provinces needs. When we look at the downturn in the economy I beleive we missed the boat on not starting this project this year. One issue that few people consider is the age of our present infrastructure many of the substations and transmission lines contain equipment more than 30 years old and I suspect some efficieny gains could be realized as our capital programs address this equipment replacement. I agree with the article as posted and feel that windfarms, solar, and all other clean sources are viable, I question if there is an appetite for the cost increases every rate payer will see.
From what I can gather in reading the entire BCUC report, it seems that BC Hydro does not need the permission of the commission to carry out the 2008 Clean Power Call or to issue contracts with the submissions from IPP's as it was originally mandated to do. Good news for the ratepayers of BC that they will be able to take advantage of "Made in BC" power versus importing dirty and expensive electricity from outside the province in low water yield years.
Warren - this is very well put. You have expressed what most people feel about this debacle and how the government should address it.
One thing for sure is that BC Hydro's union COPE 378 is more than happy to see that their monopoly control on public assets getting extended and remaining unchallenged.
I wonder to what extent this was a factor in BC Hydro's mediocre submission (that even BCUC made comment on that aspect).
Is Bob Elton going to take the blame for this debacle?
Martin Koehl - unfortunately Site-C is not green energy as it floods 8,500 hectares of farmland and pristine habitat, and contributes to carbon emissions.
Worse, the cost of power generation from Site-C is $160 a MWh, which is triple the cost of IPPs like Ashlu (at $55 a MWh).
So Site-C is the wrong answer and it only benefits BCH unionized employees with fat paychecks.
Stu...there are no completely benign forms of energy production. At a minimum they all leave a manufacturing footprint and to varying degrees have some form of operational footprint. It is true that large scale hydro floods land, liberates some previously sequestered CO2 and creates issues for various types of fish. BUT....
The storage and reshaping capability that dams provide are great enablers of renewable energy. Most forms of renewable energy supply are intermittant...either seasonally, daily or randomly.
Unfortunately we don't consume electricity the way that renewable technologies produce it. By growing BC's hydro storage capacity we enable the practical and economic development of substantially more renewable energy supply than would otherwise be possible. In doing so we set ourselves up to buy distressed green energy from other jurisdictions that have no way to store it (like Alberta wind) and we turn BC's own intermittant/green energy into a much more valuable product that creates jobs both in the renewable sector and the broader BC economy.
To get a sense of the value of intermittant (renewable) electrical energy supply just imagine how much ice cream would be worth if there was no such thing as refrigeration... On a hot day quite a bit...most days next to worthless. It is the ability to store ice cream till we are ready to consume it that gives it real value. In "economist speak" both electricity and ice cream have a high convenience yeild...when you want them you want them at almost any price and when you don't you don't. Electricity like ice cream has to be either made-to-order (fossil fueled generation) or stored (renewables).
So yes, hydro dams are not benign but they unlock the potential of renewable energy, enable them to practically displace fossil fuel generation and on balance are very good for BC and for the environment.
The alternative of course is to convince British Columbians to use electricity only when the wind blows, the streams flow or the sun shines ;-)
Martin Merritt