POWER PRODUCTION IN B.C.
· BC Hydro’s own figures show it has become a net importer to meet its customers’ needs. BC Hydro has been a net importer of electricity for seven of the last 10 years.
· Despite the current economic climate, over the long term, B.C.’s economy will continue to grow, as will the need for electricity. The gap between supply and demand is expected to widen as we move to achieve our goals for using clean, renewable electricity in transportation and other sectors.
· It takes time to build new electricity infrastructure responsibly, and government is not going to risk being ‘caught short’ by not continuing to plan for the economic future of this province.
· The self-sufficiency policy ensures that B.C. benefits from the jobs and investment of new power supply infrastructure.
· Self sufficiency will reduce our reliance on imports. Many other jurisdictions B.C. currently relies on to meet our domestic needs generate electricity from coal-fired power plants – not the clean, green sources that we enjoy in this province.
· Many British Columbia residents are surprised to learn we rely on American power to keep our lights on or that the imported power comes from coal-fired power plants. Citizens expect us to be self-sufficient and clean, considering the ample natural resources we have.
· Government has put conservation and energy efficiency as the first option utilities must consider in meeting a growing demand.
· Government has set a goal for BC Hydro to meet 50 per cent of its growing needs through conservation, and its current resource plan does that and more.
generation facilities.
· BC Hydro is investing more than $3.6 billion (BC Hydro Service Plan, 2009/10-2010/11) over the next two years to upgrade its dams and other public power infrastructure.
· In anticipation of increased demand, BC Hydro is adding capacity to the Revelstoke Dam and Generating Station. Revelstoke Dam is the most cost-effective energy source available to BC Hydro. This project will add about 500 megawatts of power, which will increase capacity at Revelstoke to 2,480 megawatts. As well, BC Hydro plans to add 1,000 megawatts of capacity with two new turbines at the Mica dam.
· Capital investments on several other sites are also proposed: Peace Canyon Stator replacement, GM Shrum Stator upgrade, Aberfeldie Dam Redevelopment and Coquitlam Dam Improvement Project.
· These capital projects will increase reliability and produce additional capacity for meeting B.C.’s power needs.
· BC Hydro has completed Stage 2 consultation of the Site C project on the
· Price stability can be predicted over the term of the contact. The price of electricity on the spot market can be volatile. Long-term contracts with power producers bring certainty and a guaranteed price.
· BC Hydro runs competitive procurement processes which result in the lowest cost projects. The resulting contracts are reviewed by the BC Utilities Commission to ensure they are in the ratepayers’ interest.
· The cost BC Hydro pays for new power supply from IPPs is similar to that being paid in other jurisdictions for new supply.
· Building new power projects is more expensive today than it was several decades ago. It costs more, not because they are IPPs, but because they are new projects. Similarly, a new home or vehicle costs more to build today than it did in the 1960s or 1970s.
· Since 1998, BC Hydro rate increases have remained below the rate of inflation and well below those of similar service providers (BC Hydro Service Plan, 2009/10-2010/11). Ratepayers still enjoy some of the lowest rates in North America and government is committed to maintaining that competitive advantage.
· The BC Energy Plan released in 2007 reaffirms the government’s commitment to public ownership of BC Hydro and its assets while broadening the supply of available energy.
· The BC Hydro Public Power Legacy and Heritage Contract Act and the Transmission Corporation Act require that our public power legacy be maintained.
· This government has also established the Heritage Contract in Perpetuity. This benefits ratepayers by continuing to receive low-cost electricity for generations to come and helps keep rates among the lowest in
· When a proponent wants to develop a hydroelectric project, they must apply for a water license and a Crown land license, which grants them the right to construct their projects on Crown land and to use the water subject to the terms and conditions specified in the license.
· The project application is made available for review to agencies, local governments, First Nations and special interest groups for feedback. This feedback is used by the permitting agencies when considering whether to approve the application and in setting conditions for any approvals.
· Any run-of-the-river project must follow a multi-step process for development, and for projects of over 50 MW in size this includes an Environmental Assessment Act process.
· Requirements include, but are not limited to:
o A land tenure permit for projects situated on Crown land. This requirement falls under the Land Act;
o Application for a water license (which falls under the Water Act) for any run-of-river projects using water;
o Projects other than run-of-river will require different permits, depending on the type (i.e. wind, biomass, geothermal, etc);
o Consultation with First Nations.
· Considering the size and scope of a project, there could be no fewer than 11 provincial approvals that must be attended to when considering an IPP permit. As well, there could also be as many as six federal departments that would have to approve an IPP, if federal approval is needed (Ministry of Agriculture & Lands, Independent Power Production in B.C. – A Guidebook for Proponents, http://www.al.gov.bc.ca/clad/IPP_guidebook.pdf).
· Water licenses are for fixed terms and after the term expires, the IPP holding the license no longer has any rights to use the water without obtaining a new water license. Granting fixed terms on licenses ensures that the Province retains control over the water resources, while ensuring that IPPs can meet their contractual obligations to deliver power to BC Hydro.
· Rivers and streams will continue to remain in public hands – IPPs do not own them.
· There are mandatory time limits on water power licenses to ensure ownership of our rivers and waterways remain in public hands. Prior to changes made by the current government in 2003, water power licenses were issued with no expiration date.
· IPPs receive water licences of 40 years, and when those end, so do the water licenses and the land tenure rights. A company would have to re-apply to have the water/land tenure license renewed in order to keep operating.
· If power producers want to use water systems for a run-of-river project, they must pay water rental fees that typically can amount to significant revenue to the Province over the life of a project.
· This arrangement can be compared to what a forest company does – it pays the government ‘stumpage fees’ to access timber on Crown land through a 25-year lease arrangement with the option of renewal after 25 years.
· NAFTA does not prevent government from regulating its water resources, or determining whether or not to issue a licence.
· Availability and cost of transmission to the
· Challenges in marketing intermittent supply from projects such as wind and run-of-river;
· The available opportunities to sell power to BC Hydro.
· When a water license expires, it will be up to the government of the day to decide whether or not the license should be renewed.
· BC Hydro, StatsCan and the
· StatsCan and the
· As of Dec. 31, 2008, only 88 IPP licenses have been issued that are still current (61 since 2001) and 154 applications have been refused or abandoned. Of the 88 licenses issued, 26 of them were prior to May 2001; 62 since 2001. In other words, one-quarter of these were approved prior to 2001.
· A total of 47 IPPs are operating all around the province and 15 of them have been generating green electricity for over 10 years. (32 of the 47 IPPs are run-of-river) (Ministry of Environment, Water Stewardship Division stats)
· Comparing water licence applications to operating IPPs is like comparing mineral claims to operating mines – there are more than 50,000 mineral claims staked in B.C. but only a handful of operating mines. It does not take into account the enormous environmental, financing, and other regulatory processes power projects need to pass before they can become a reality.
· Total construction employment from IPPs that started construction since 2001 is about 4,000 person years. There is also indirect employment in the way of supporting community facilities. (Industry employment figures, as of Feb. 2009 (IPPBC)
· According to industry figures, IPPs have already invested $2.4 billion in B.C. with an additional $6.8-billion currently ongoing or expected in connection with existing calls for power.
· There are more than 1,100 workers employed on 47 operating projects and another 18 projects currently under construction. Current construction represents over $2 billion of private investment. (Industry employment figures, as of Feb. 2009 (IPPBC))
· Not all IPPs are run-of-river projects. Current IPPs include natural gas fired, heat recovery and biomass generation. Future projects could include wind, geothermal, ocean and solar electricity projects.
· The Squamish First Nation is involved in the Furry Creek and Ashlu run-of-river projects. Ashlu will become the property of the Squamish First Nation at the end of their power sales agreement with BC Hydro.
· The Hupacasath First Nations is an example of a proponent that has an electricity purchase agreement with BC Hydro for their China Creek Project on
· The Taku Land Corporation also has an electricity purchase agreement on Pine Creek and another one on Kwoiek Creek which involves the Kanaka Bar Indian Band.
· The Klahoose on
· Nai Kun Wind Energy and the Haida Nation have formed a commercial partnership to operate and maintain Nai Kun’s proposed wind farm in Hecate Strait. The agreement formalizes a relationship that’s been developing since 2002.
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