Tom Fletcher, Victoria View, September 10, 2011
I had a lively discussion with NDP energy critic John Horgan this week, after a presentation by independent power producers about the benefits of expanding the province’s small hydro and wind power network to replace coal- and gas-fired electricity. Here’s an edited transcript:
John Horgan: To suggest that IPPs are cost effective when the Site C numbers are $40 a megawatt-hour less than what the last call was [for contracted electricity], strikes me as inconsistent with the facts.
Tom Fletcher: Hydro says what they’ve paid so far is more like $65.
JH: Have you seen those contracts, Tom, or are you going by B.C. Utilities Commission which I’m exposed to? And the numbers on average were $87 a megawatt hour in the first call and $120 in the second.
TF: Including the cost of power lines to run all over where there’s no grid.
JH: And who should pay for that, ratepayers?
TF: They paid for the rest of the grid.
JH: Or should that come out of the profits of the IPPs? Who should pay for shaping and firming, the use of the reservoir? Ratepayers or the private power producers? My view is the private power producers, and when they’re making the case that they’re better than Hydro, they should defend shaping and firming, transmission and access to marketplace. In any other business that’s what you would have to do, it should be no different in this case.
I’m not fundamentally opposed to private power production. I’m opposed to a parallel private generation system for ideological purposes, and that has been my view of B.C. Liberal energy policy for a number of years.
I worked for Mike Harcourt when private power was kicked off. Small micro-hydro to provide for communities that were off the grid, displace diesel generation, a whole host of good social purposes and economic benefit flows from that.
TF: If you put the cost of running the wires into that, then these projects you say you like would never happen.
JH: Not necessarily.
TF: We’ll just get the first nation in the remote village to pay for the whole thing, right?
JH: No, there’s a social benefit to that. What’s the social benefit to the shareholders of Plutonic Power to pick up the charges for them to deliver their product to marketplace? How does that help anybody other than the shareholders of Plutonic Power?
If you’re helping communities who are using odious energy sources by providing them with greener sources, that’s a benefit to that community. And that’s what a public utility is supposed to do. A public utility is not supposed to improve the bottom line for shareholders, and that’s the fundamental flaw in the IPP policies of the B.C. Liberals. And I’ve been saying that for a long time. You’ve not been listening to it.
TF: This idea about B.C. being an industry leader, is that just smoke from the industry?
JH: I would think so. How do you lead the industry by taking technologies from other jurisdictions and putting them in place here? Hydro can do that. If it’s just procurement of new services, why can’t Hydro do that? They have savings on borrowing capital. They have expertise in the system, apparently a surplus of engineers.
I believe if the private sector can be more cost-effective in providing power for communities that are currently under-served by the grid, that’s great. And if we can find ways that we can have private activities within the sector, that’s great too. What we’ve had is a parallel generation system, and that has been starving our jewel to create a cash cow for investors.
Plutonic is more or less out of the business now. They’ve harvested what they can, and passed it on to GE. They’ve passed it on to Magma. They’ve passed it on to these other large players to take their bit of public wealth and transfer it to private hands, and I disagree with that profoundly.
I was in the Nemiah Valley. They have some good ideas about micro-hydro, some solar, some wind, some geothermal to meet their needs. And they should be supported by government and BC Hydro to meet those needs. I don’t have any problem with that. And if the private sector can make that happen, all the better. But that’s focused on community development at its core, and I think there’s a benefit to the broader community to do that.
I do not see a broader benefit to see the Bute project come into play at 1,000 megawatts, creating temporary camp jobs and the development and despoiling the environment, only so that we can have very expensive power that we will have to sell at a loss in the market, in the short term if not the long term.
TF: What about Site C? Does it still suck?
JH: I have had a number of thoughts on Site C.
TF: [Laughs.] You have. Contradictory ones.
JH: [Laughs.] And I’m OK with that. And I think I’ve laid out my evolution of thinking on a very big and controversial project.