INDEPENDENT HYDRO PROJECTS ON THE OUTS
First Nations look to remain players, as corporate projects fall out of favour
Tucked into the last paragraph of a B.C. Hydro press release on Wednesday was news about the B.C. Liberal government’s experiment with buying electricity from large-scale independent power producers.
“B.C. Hydro supports the (NDP) government’s decision to take a closer look at energy procurement to ensure it provides the best value for its customers through their review of B.C. Hydro this year,” it read.
“As a result, there are no plans at this time to issue any additional electricity purchase agreements until the review is complete.”
This following the announcement that Hydro was proceeding to negotiate electricity purchases from small-scale clean-energy projects with five First Nations.
Two of the five are for 15-megawatt wind farm projects with the Salteau and West Moberly First Nations, each with a link to the 1,100-megawatt Site C hydroelectric project under construction on the Peace River.
Salteau has a signed agreement with B.C. Hydro to share in the benefits of Site C and support for the wind farm might be part of the deal.
Less apparent is Hydro’s rationale for a deal with West Moberly. The First Nation is adamantly opposed to Site C and seeking an injunction to stop construction through a full-blown hearing set for later this year in B.C. Supreme Court.
Hydro will also proceed with talks on a five-megawatt small-scale hydro project with the Huu-ay-aht First Nation near Bamfield and a 500-kilowatt one with the Kanaka Bar Band near Boston Bar. Rounding out the quartet is a one-megawatt solar-power project under development by Tsilhqot’in National government at a site near Hanceville.
“Moving forward with the development of these energy projects is a step in the right direction in creating opportunities for First Nations in the province, while also contributing to B.C.’s clean energy future,” Energy Minister Michelle Mungall said in a press release.
But the combined 36.5 megawatts for the five projects is a far cry from some of the larger independent power projects under the B.C. Liberals. Altera’s Toba Montrose run of the river venture on the Sunshine Coast is rated at 235 megawatts all by itself.
After the release was out, I asked Mungall if this were the end of the line for independent power projects. She signalled it surely was for the large-scale and corporatebacked ventures that went forward under the B.C. Liberals.
There will continue to be opportunities for First Nations to develop and sell electricity to B.C. Hydro, she assured me. The emphasis would be smaller-scale clean energy projects to wean communities off diesel-generated power and on developments that provide jobs and economic benefits to isolated First Nation communities.
In fairness to the B.C. Liberals, First Nation partnerships were a substantial part of many of the projects undertaken on their watch. But the lingering controversy involves long-term contracts that were locked in at higher prices before a decade-long glut of cheap electricity.
Mungall and her NDP colleagues came into office as harsh critics of the power deals struck by the Liberals.
But their move against private power was made easier by the decision to proceed with 1,100 megawatts of public power at Site C and by the recent report from the B.C. Utilities Commission on the NDP request for a one-year freeze in Hydro rates.
The New Democrats didn’t like that the commission rejected the freeze. But they did like what it said about the financial woes that the Liberals left behind at Hydro, including those rooted in overpriced contracts with independent power producers.
“We learned that we have a bit of a financial mess at B.C. Hydro. It’s a mess that this government is going to have to clean up, and we will do that,” Mungall told me during an interview last week on Voice of B.C. on Shaw TV. “We’re very clear that it was not right for ratepayers to have to pay inflated costs for these private power projects. The Liberals went ahead with that, and now that issue has come home to roost, and the BCUC highlighted it.”
In arguing that Hydro couldn’t afford the $140-million revenue loss of a rate freeze, the commission cited a number of factors, the high cost of contracts with independent power projects foremost among them.
Not to say the giant utility had not made some progress putting the squeeze on some of the less flattering deals signed by the Liberals. The commission noted that B.C. Hydro has opted to terminate 14 electricity purchase agreements, to downsize and defer two agreements, and to delay the delivery of energy to B.C. Hydro under another 11 agreements. “As a result of these actions, B.C. Hydro has reduced electricity purchase commitments by $2.1 billion.”
Those savings notwithstanding, the three-member commission panel expressed concern “about the high unit costs of B.C. Hydro’s portfolio of (independent power) purchases and we are of the view that careful consideration be given to the need for and length of renewals.”
With that in mind, the panel requested an in-depth filing from B.C. Hydro on the cost of independent power projects and the “long-term commitments included in Hydro’s cost of energy.”
No doubt Hydro will be happy to oblige, particularly under a provincial government that never liked independent power in the first place.
With B.C. now committed to the most expensive public power project in provincial history, First Nations will likely remain the only players on the non-governmental front.
We learned that we have a bit of a financial mess at B.C. Hydro.
MICHELLE MUNGALL, provincial energy minister