Scott Simpson, Vancouver Sun, February 6, 2010
Independent power producers seek parity with other Hydro customers, but critics argue move would negatively impact ratepayers
Independent power producers seek economic opportunities and benefits from government similar to those available for British Columbia industries such as forestry and mining, according to a document obtained by The Vancouver Sun.
Independents argue in a submission to the B.C. government's Green Energy Task Force that the industry could quadruple in size by 2020, generating
$29 billion in capital investment and creating up to 8,000 full-time permanent jobs.
That includes development of new power supplies for both domestic use and a hungry export market in the United States, according to the submission from the Independent Power Producers Association of B.C.
"IPPs are poised to become another piston in the B.C. resource industry export engine along with mining, forestry and oil and gas -- with the ensuing benefits to the provincial treasury," the submission states.
The independent power association argues that energy planning must move beyond the traditional objective of providing BC Hydro customers with the lowest possible electricity rates, and incorporate climate change actions, renewable power development and some social policies into the price of power.
BC Hydro can add significant value to small-scale renewable power companies by using its heritage hydroelectric system to "firm" their electricity to a higher standard of reliability for export -- and should do so at the same price large industries pay for their electricity, according to the submission.
Critics of independent power have argued that the industry, which is concentrating on development of lower value non-firm, or intermittent power, such as wind and run-of-river hydro, would get an undue economic benefit at the expense of ratepayers if Hydro provides a firming service for its product.
Both the industrial electricity price and the firming opportunity should be available even in cases where independents don't strike power sales deals with BC Hydro and instead contract directly with buyers in other jurisdictions, the submission says.
In an interview, the association's executive director Paul Kariya said his members are looking for benefits similar to those enjoyed by other major resource sectors such as forestry and mining.
For mining, B.C. provides significant tax deductions for investments in mineral exploration projects.
Forest companies have tenures, and are able to offset infrastructure costs such as road building to access the trees they want to harvest, Kariya said.
They also have access to some of the lowest industrial power rates on the continent, about a third of what Hydro domestic customers pay for electricity.
"There are benefits from our sector that flow to all parts of society, just like other business sectors that have developed. That's the same kind of treatment we want," Kariya said.
"Clean energy is the shape of things to come and it can provide a good chunk of our future in terms of economic engines. That's what drives this."
The association also recommends creation of a third-party agency to manage new power supply acquisitions on behalf of BC Hydro.