Energy Solutions for Vancouver Island

Hydro faces a new storm over generating power

Times Colonist, Page A14, Feb 24, 2007
Les Leyne, Times Colonist

This winter’s storm damage was so great that B.C. Hydro wants to do some financial juggling to cover the costs.

The hellish series of storms that swept through B.C. in November and December had Hydro crews working unprecedented overtime. That and other storm costs wound up costing the utility about $35 million by the end of 2006, and some lesser storms in January will push the damage bill even higher.

In a report tabled with this week’s budget, Hydro said it is preparing an application to the B.C. Utilities Commission to seek recovery of storm costs. But it might not hurt as much as customers think. The $35-million loss is being booked in a deferral account, which eases the cost somewhat by spreading it over a number of years. And the snow that came with those storms could be worth millions more in terms of reservoir levels this summer.

Those aren’t the only storms Hydro is coping with. In the next few weeks, the government will unveil a major update to the provincial energy plan, and B.C. Hydro will be the centre of attention.

The energy plan will refocus a certain amount of attention back on the climate-change issue. B.C. Liberals bought into the need for big changes with wild enthusiasm last week in their throne speech. Then they dropped the subject entirely in this week’s budget.

The idea is that they need a year to put a plan of attack together, so the next budget is the one that will tackle the real cost of climate-change initiatives. But the upcoming energy plan will return to the topic, at least as far as electrical generation is concerned.

There have been whispers over the past few weeks that the government might want to see a new management team at the top of the Hydro hierarchy to deal with the brave new world. Current board chairman Larry Bell and current CEO Bob Elton have both been around for a while. The Liberals might feel a need to see some new management pursuing their new energy plan.

On the other hand, two years ago both Bell and Elton survived the severe glitch in the release of the company’s own integrated electricity plan. The Liberals rejected it on the eve of its release date, forcing them back to the drawing board. If they survived that, they can survive anything.

The key goal of the new plan will be to achieve energy self-sufficiency as soon as possible, likely 10 years.

That means replacing the 10 to 12 per cent of power currently imported with home-grown electricity. (The amount imported depends a lot on reservoir levels, which brings the storms back into the picture. This year those levels are expected to be very high from all the snow, so it could be a good, although fluky, year.)

Previous policy declarations have required that new home-grown power be privately produced and as green as possible; 50 per cent clean by 2012.

With climate change at the top of mind when the new plan comes out, the clean target will become even more ambitious. The throne speech demands net zero greenhouse-gas emissions from all electricity production with nine years. It requires that 90 per cent of B.C.’s electricity come from clean renewable sources (like, hypothetically, another big dam on the Peace River, for instance.) And it specifically requires that the two new coal-fired plants on the drawing board be emission-free, which throws at least one of them into doubt.

While B.C.’s overall target is slightly lower than California’s, that state has one other electricity-related target that reaches right back to B.C. It requires that a percentage of the power it imports from elsewhere be clean, explaining rumours that a Vancouver consultant has been retained by a big San Francisco utility to scope out investment opportunities in B.C.

Also in the mix is a complicated series of price changes. They’re going up and down and probably up again, as a small hike kicks in this month, then gets offset by a deduction to make up for some overcharging that occurred while Hydro was waiting for a utilities commission ruling.

But the energy plan is the main event. Electricity isn’t the big culprit when it comes to provincial emissions. But demand is never-ending (more than 30,000 new customers last year) and new green constraints on meeting that demand will set a fairly dramatic agenda for Hydro. It adds up to a lot of anticipation about how exactly they expect to make all this happen.

Just So You Know: A column this week that referred to the deputy finance minister’s letter attesting to the accuracy of some budget assumptions said that letter was required under Liberal budget transparency legislation.

That’s transparently wrong. It was the last New Democrat government’s transparency law that requires the letter.

My apologies.

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