Justine Hunter, Globe and Mail, April 28, 2010
Victoria — The British Columbia government has sidelined its independent energy regulator in a bid to shape the province’s green electricity future.
The new Clean Energy Act introduced Wednesday yesterday is designed to boost investment in a lucrative sector that can bring billions of dollars into the province, while protecting low rates for British Columbians – at least for now.
To ensure the government’s agenda is not waylaid by the B.C. Utilities Commission, the law exempts most new projects, plans and programs from the watchdog’s control, leaving it to provide oversight on domestic electricity rates.
“I think it’s appropriate that government sets its priorities,” said Energy Minister Blair Lekstrom. The BCUC will have no say over the development of the Site C dam or other new hydro projects. Nor will it be able to assess the smart meter program that will see the Crown corporation spend $930-million on conservation devices to be installed in all its customers’ homes by 2012. And it won’t have a say in the clean energy calls for independent power projects.
The proposed law aims to promote investment in renewable energy by streamlining regulations around independent power projects. It also creates a new model to secure long-term export power sales “without risk or cost to B.C. taxpayers,” Mr. Lekstrom said. BC Hydro would act as a middleman for independent power producers who want to sell clean energy to other provinces or to the United States.
It is the latest in a series of actions by both Ontario and B.C. to attract clean energy projects, but Ontario’s Minister of Energy and Infrastructure, Brad Duguid, said he is not worried that B.C. will be luring away investment dollars with this new plan. “Being out in front where we are now, we welcome healthy competition,” he said in an interview. “We’re glad to see B.C. is following our lead in attracting green energy development.”
Mr. Lekstrom maintained B.C. ratepayers will be guaranteed continued low hydro rates, a less-than-subtle shot at Ontario’s program.
Mr. Lekstrom said the difference between the two provincial clean energy plans is that ratepayers in British Columbia won’t end up subsidizing more expensive new clean energy projects for export.
However New Democratic Party energy critic John Horgan predicted the expansion plans will come at the expense of BC Hydro’s ratepayers.
“It’s going to mean increased rates without any appreciable benefit to the province of British Columbia,” he said. “It is opening up the floodgates to independent power producers to use BC Hydro … to sell their power.”
He said the BCUC has been gutted because it rejected BC Hydro’s last long-term power acquisition plan, interfering with the government’s agenda. “By doing the right thing, they signed their death warrant.”
Don Roberts, CIBC’s senior renewable energy banker, said the two provinces have very different energy needs so it isn’t easy to compare their plans. “They are playing with different variables, it’s hard to say someone scored a knock-out punch.”
But he said B.C. won’t find it easy to resist offering subsidies if it wants to compete with Ontario’s attractive, long-term rates for clean power investments. “We’re not going to be inducing new supply without some assistance.”
In fact, the new legislation does open the door to a made-in-B.C. premium-price plan for producers of green energy, if the government chooses to move in that direction. And the higher costs of attracting emerging technologies, such as bioenergy, would be passed on to B.C. Hydro’s ratepayers.