Electricity

Electricity Security

Electricity, while often taken for granted, is the lifeblood of our modern economy and key to our entire way of life. Fortunately, British Columbia has been blessed with an abundant supply of clean, affordable and renewable electricity. But today, as British Columbia's population has grown, so too has our demand for electricity. We are now dependent on other jurisdictions for up to 10 per cent of our electricity supply. BC Hydro estimates demand for electricity to grow by up to 45 per cent over the next 20 years.

We must address this ever increasing demand to maintain our secure supply of electricity and the competitive advantage in electricity rates that all British Columbians have enjoyed for the last 20 years. There are no simple solutions or answers. We have an obligation to future generations to chart a course that will ensure a secure, environmentally and socially responsible electricity supply.

To close this electricity gap, and for our province to become electricity self-sufficient, will require an innovative electricity industry and the real commitment of all British Columbians to conservation and energy efficiency.

The New Relationship and Electricity

The Government of British Columbia is working with First Nations to restore, revitalize and strengthen First Nations communities. The goal is to build strong and healthy relationships with First Nations people guided by the principles of trust and collaboration. First Nations share many of the concerns of other British Columbians in how the development of energy resources may impact as well as benefit their communities. In addition, First Nations have concerns with regard to the recognition and respect of Aboriginal rights and title.

By focusing on building partnerships between First Nations, industry and government, tangible social and economic benefits will flow to First Nations communities across the province and assist in eliminating the gap between First Nations people and other British Columbians.

Government is working every day to ensure that energy resource management includes First Nations' interests, knowledge and values. By continuing to engage First Nations in energy related issues, we have the opportunity to share information and look for opportunities to facilitate First Nations' employment and participation in the electricity sectors to ensure that First Nations people benefit from the continued growth and development of British Columbia's resources. The BC Energy Plan provides British Columbia with a blueprint for facing the many energy challenges and opportunities that lay ahead. It provides an opportunity to build on First Nations success stories such as:

• First Nations involvement in independent power projects, such as the Squamish First Nation's participation in the Furry Creek and Ashlu hydro projects.
• Almost $4 million will flow to approximately 10 First Nations communities across British Columbia to support the implementation of Community Energy Action Plans as part of the First Nation and Remote Community Clean Energy Program.
• The China Creek independent power project was developed by the Hupacasath First Nation on Vancouver Island.

Achieve Electricity Self-Sufficiency by 2016

Achieving electricity self-sufficiency is fundamental to our future energy security and will allow our province to achieve a reliable, clean and affordable supply of electricity. It also represents a lasting legacy for future generations of British Columbians. That's why government has committed that British Columbia will be electricity self-sufficient within the decade ahead.

Through The BC Energy Plan, government will set policies to guide BC Hydro in producing and acquiring enough electricity in advance of future need. However, electricity generation and transmission infrastructure require long lead times. This means that over the next two decades, BC Hydro must acquire an additional supply of "insurance power" beyond the projected increases in demand to minimize the risk and implications of having to rely on electricity imports.

Small Power Standing Offer

Achieving electricity self-sufficiency in British Columbia will require a range of new power sources to be brought on line. To help make this happen, this policy will direct BC Hydro to establish a Standing Offer Program with no quota to encourage small and clean electricity producers. Under the Standing Offer Program, BC Hydro will purchase directly from suppliers at a set price. Eligible projects must be less than 10 megawatts in size and be clean electricity or high efficiency electricity cogeneration. The price offered in the standing offer contract would be based on the prices paid in the most recent BC Hydro energy call. This will provide small electricity suppliers with more certainty, bring small power projects into the system more quickly, and help achieve government's goal of maintaining a secure electricity supply. As well, BC Hydro will offer the same price to those in BC Hydro's Net Metering Program who have a surplus of generation at the end of the year.

Ensuring a Reliable Transmission Network

An important part of meeting the goal of self-sufficiency is ensuring a reliable transmission infrastructure is in place as additional power is brought on line. Transmission is a critical part of the solution as often new clean sources of electricity are located away from where the demand is. In addition, transmission investment is required to support economic growth in the province and must be planned and started in anticipation of future electricity needs given the long lead times required for transmission development. New and upgraded transmission infrastructure will be required to avoid congestion and to efficiently move the electricity across the entire power grid. Because our transmission system is part of a much larger, interconnected grid, we need to work with other jurisdictions to maximize the benefit of interconnection, remain consistent with evolving North American reliability standards, and ensure British Columbia's infrastructure remains capable of meeting customer needs.

In order for British Columbia to ensure the development of a secure and reliable supply of electricity, The BC Energy Plan provides policy direction to the BC Transmission Corporation to ensure that our transmission technology and infrastructure remains at the leading edge and has the capacity to deliver power efficiently and reliably to meet growing demand. This will include ensuring there is adequate transmission capacity, ongoing investments in technology and infrastructure and remaining consistent with evolving North American reliability standards.

BC Transmission Corporation Innovation and Technology

As the manager of a complex and high-value transmission grid, BC Transmission Corporation is introducing technology innovations that provide improvements to the performance of the system and allow for a greater utilization of existing assets, ensuring B.C. continues to benefit from one of the most advanced energy networks in the world. BC Transmission Corporation's innovation program focuses on increasing the power transfer capability of existing assets, extending the life of assets and improving system reliability and security. Initiatives include:

• System Control Centre Modernization Project: This project is consolidating system operations into a new control center and backup site and upgrading operating technologies with a modern management system that includes enhancements to existing applications to ensure the electric grid is operating reliably and efficiently. The backup site will take over complete operation of the electric grid if the main site is unavailable.
• Real-Time Phasors: British Columbia is among the first North American jurisdictions to incorporate phasor measurement into control centre operations. Phasors are highly accurate voltage, current and phase angle "snapshots" of the real-time state of the transmission system that enable system operators to monitor system conditions and identify any impending problems.
• Real-Time Rating: This is a temperature monitoring system which enables the operation of two 500 kilovolt submarine cable circuits at maximum capacity without overloading. The resulting increase in capacity is estimated to be up to 10 per cent, saving millions of dollars.
• Electronic Temperature Monitor Upgrades for Station Transformers: In this program, existing mechanical temperature monitors will be replaced with newer, more accurate electronic monitors on station transformers that allow transformers to operate to maximum capacity without overheating. In addition to improving performance, BC Transmission Corporation will realize reduced maintenance costs as the monitors are "self-checking".
• Life Extension of Transmission Towers: BC Transmission Corporation maintains over 22,000 steel lattice towers and is applying a special composite corrosion protection coating to some existing steel towers to extend their life by about 25 years.

Public Ownership

Public Ownership of BC Hydro and the BC Transmission Corporation

BC Hydro and the BC Transmission Corporation are publicly-owned crown corporations and will remain that way now and into the future. BC Hydro is responsible for generating, purchasing and distributing electricity. The BC Transmission Corporation operates, maintains, and plans BC Hydro's transmission assets and is responsible for providing fair, open access to the power grid for all customers. Both crowns are subject to the review and approvals of the independent regulator, the BC Utilities Commission.

BC Hydro owns the heritage assets, which include historic electricity facilities such as those on the Peace and Columbia Rivers that provide a secure, reliable supply of low-cost power for British Columbians. These heritage assets require maintenance and upgrades over time to ensure they continue to operate reliably and efficiently. Potential improvements to these assets, such as capacity additions at the Mica and Revelstoke generating stations, can make important contributions for the benefit of British Columbians.

Confirming the Heritage Contract in Perpetuity

Under the 2002 Energy Plan, a legislated heritage contract was established for an initial term of 10 years to ensure BC Hydro customers benefit from its existing low-cost resources. With The BC Energy Plan, government confirms the heritage contract in perpetuity to ensure ratepayers will continue to receive the benefits of this low-cost electricity for generations to come.

British Columbia's Leadership in Clean Energy

The BC Energy Plan will continue to ensure British Columbia has an environmentally and socially responsible electricity supply with a focus on conservation and energy efficiency.

British Columbia is already a world leader in the use of clean and renewable electricity, due in part to the foresight of previous generations who built our province's hydroelectric dams. These dams — now British Columbians' 'heritage assets' — today help us to enjoy 90 per cent clean electricity, one of the highest levels in North America.

All New Electricity Generation Projects Will Have Zero Net Greenhouse Gas Emissions

The B.C. government is a leader in North America when it comes to environmental standards. While British Columbia is a province rich in energy resources such as hydro electricity, natural gas and coal, the use of these resources needs to be balanced through effective use, preserving our environmental standards, while upholding our quality of life for generations to come. The government has made a commitment that all new electricity generation projects developed in British Columbia and connected to the grid will have zero net greenhouse gas emissions. In addition, any new electricity generated from coal must meet the more stringent standard of zero greenhouse gas emissions.

Zero Net Greenhouse Gas Emissions from Existing Thermal Generation Power Plants by 2016

Setting a requirement for zero net emissions over this time period encourages power producers to invest in new or upgraded technology. For existing plants the government will set policy around reaching zero net emissions through carbon offsets from other activities in British Columbia. It clearly signals the government's intention to continue to have one of the lowest greenhouse gas emission electricity sectors in the world.

Ensure Clean or Renewable Electricity Generation Continues to Account For at Least 90 per cent of Total Generation

Currently in B.C., 90 per cent of electricity is from clean or renewable resources. The BC Energy Plan commits to maintaining this high standard which places us among the top jurisdictions in the world. Clean or renewable resources include sources of energy that are constantly renewed by natural processes, such as water power, solar energy, wind energy, tidal energy, geothermal energy, wood residue energy, and energy from organic municipal waste.

Zero Greenhouse Gas Emissions from Coal

The government is committed to ensuring that British Columbia's electricity sector remains one of the cleanest in the world and will allow coal as a resource for electricity generation when it can reach zero greenhouse gas emissions. Clean-coal technology with carbon sequestration is expected to become commercially available in the next decade. Therefore, the province will require zero greenhouse gas emissions from any coal thermal electricity facilities which can be met through capture and sequestration technology. British Columbia is the first Canadian jurisdiction to commit to using only clean coal technology for any electricity generated from coal.

Burrard Thermal Generating Station

A decision regarding the Burrard Thermal Natural Gas Generating Station is another action that is related to environmentally responsible electricity generation in British Columbia.

Even though it could generate electricity from Burrard Thermal, BC Hydro imports power primarily because the plant is outdated, inefficient and costly to run. However, Burrard Thermal still provides significant benefits to BC Hydro as it acts as a "battery" close to the Lower Mainland, and provides extra capacity or "reliability insurance" for the province's electricity supply. It also provides transmission system benefits that would otherwise have to be supplied through the addition of new equipment at Lower Mainland sub-stations.

By 2014, BC Hydro plans to have firm electricity to replace what would have been produced at the plant. Government supports BC Hydro's proposal to replace the firm energy supply from Burrard Thermal with other resources by 2014. However, BC Hydro may choose to retain the plant for "reliability insurance" should the need arise.

No Nuclear Power

As first outlined in Energy Plan 2002, government will not allow production of nuclear power in British Columbia.

Carbon offsets and how they reduce emissions

A carbon offset is an action taken directly, outside of normal operations, which results in reduced greenhouse gas emissions or removal of greenhouse gases from the atmosphere. Here's how it works: if a project adds greenhouse gases to the atmosphere, it can effectively subtract them by purchasing carbon offsets which are reductions from another activity. Government regulations to reduce greenhouse gases, including offsets, demonstrate leadership on climate change and support a move to clean and renewable energy.

Benefits to British Columbians

Clean or renewable electricity comes from sources that replenish over a reasonable time or have minimal environmental impacts. Today, demand for economically viable, clean, renewable and alternative energy is growing along with the world's population and economies. Consumers are looking for power that is not only affordable but creates minimal environmental impacts. Fortunately, British Columbia has abundant hydroelectric resources, and plenty of other potential energy sources.

Maintain our Electricity Competitive Advantage

British Columbians require a secure, reliable supply of competitively priced electricity now and in the future. Competitively priced power is also an incentive for investors to locate in British Columbia. It provides an advantage over other jurisdictions and helps sustain economic growth. We are fortunate that historic investments in hydroelectric assets provide electricity that is readily available, reliable, clean and inexpensive. By ensuring public ownership of BC Hydro, the heritage assets and the BC Transmission Corporation and confirming the heritage contract in perpetuity, we will ensure that ratepayers continue to receive the benefits of this low cost generation. Due to load growth and aging infrastructure, new investments will be required. Investments in maintenance and in some cases expansions can be a cost effective way to meet growth and reduce future rate increases.

British Columbia must look for new, innovative ways to stay competitive. New technologies must be identified and nurtured, from both new and existing industries. By diversifying and strengthening our energy sector through the development of new and alternative energy sources, we can help ensure the province's economy remains vibrant for years to come.

Ensure Electricity is Secured at Competitive Prices

One practical way to keep rates down is to ensure utilities have effective processes for securing competitively priced power. As part of The BC Energy Plan, government will work with BC Hydro and parties involved to continue to improve the Call for Tender process for acquiring new generation. Fair treatment of both buyers and sellers of electricity will facilitate a robust and competitive procurement process. Government and BC Hydro will also look for ways to further recognize the value of intermittent resources, such as run-of- river and wind, in the acquisition process — which means that BC Hydro will examine ways to value separate projects together to increase the amount of firm energy calculated from the resources.

Rates Kept Low Through Powerex Trading of Electricity

Profits from electricity trade also contribute to keeping our electricity rates competitive. BC Hydro, through its subsidiary, Powerex, buys and sells electricity when it is advantageous to British Columbia's ratepayers. Government will continue to support capitalizing on electricity trading opportunities and will continue to allocate trade revenue to BC Hydro ratepayers to keep electricity rates low for all British Columbians.

BC Utilities Commissions' Role in Social and Environmental Costs and Benefits

The BC Energy Plan clarifies that social, economic and environmental costs are important for ensuring a suitable electricity supply in British Columbia. Government will review the BC Utilities Commissions' role in considering social, environmental and economic costs and benefits, and will determine how best to ensure these are appropriately considered within the regulatory framework.

Bring Clean Power to Communities

British Columbia's electricity industry supports thousands of well-paying jobs, helps drive the economy and provides revenues to sustain public services. British Columbia's electricity industry already fosters economic development by implementing cost effective and reliable energy solutions in communities around the province. However, British Columbia covers almost one million square kilometres and electrification does not extend to all parts of our vast province.

Government and BC Hydro have established First Nation and remote community energy programs to implement alternative energy, energy efficiency, conservation and skills training solutions in a number of communities. The program focuses on expanding electrification services to as many as 50 remote and First Nations communities in British Columbia, enabling them to share in the benefits of a stable and secure supply of electricity. Government will put the policy framework in place and BC Hydro will implement the program over the next 10 years. The Innovative Clean Energy Fund can also support technological advancements to address the issue of providing a clean and secure supply of electricity to remote communities.

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