British Columbia will pay $58 billion to buy electricity from wind, run-of-river and other renewable power projects over the next 55 years, an eye-popping amount that has the province’s two major parties sparring over the role of the independent power industry in B.C.’s energy policy.
According to a review of the public accounts released late last month by Auditor General Carol Bellringer, BC Hydro’s deals with independent power producers (IPPs) are the province’s single largest contractual obligation—making up more than half of the $102 billion the province has promised to pay for goods and services.
With an election looming, the B.C. Liberals and B.C. NDP are trading barbs over whether that $58 billion is a good deal for British Columbians.
Independent power producers and supporters in government say the industry provides economic benefits to rural and First Nations communities while diversifying B.C.’s electricity grid. Critics counter that B.C. is locked in to paying a high price for power.
“While the number looks big, it really shouldn’t be seen that way,” said Paul Kariya, Executive Director of Clean Energy BC, an IPP industry group. “It’s not debt. I think what British Columbians are getting (from IPPs) is great service, good diversified electricity and the jobs and taxes and revenues—which come particularly from the 250 area code.”
BC Hydro has signed power purchase agreements with 100 renewable energy projects across the province, including wind, small-scale hydroelectric, solar, tidal and biomass. IPPs account for around a quarter of electricity generation in B.C., according to the energy ministry.
Compared to other provinces, B.C. relies more heavily on the IPP industry. Quebec, with around double B.C.’s population, has $38 billion in power purchase agreements, according to the auditor general’s report.
Up until the government approved Site C in 2014, which some predict will come online during a power surplus, BC Hydro issued regular calls for clean power proposals. Contracts to sell electricity to the grid can run from 25 to 40 years, Kariya said.
B.C. NDP Hydro critic Adrian Dix said government has locked itself into lengthy fixed-rate contracts at a time when technological advances are making clean power cheaper.
“BC Hydro has committed to them at high prices,” he said, saying the B.C. government and Premier Christy Clark are “exaggerating” future demand for power. “That’s a massive contractual obligation that previous to that was dramatically smaller.”
In a written statement, Energy Minister Bill Bennett defended the industry and attacked the NDP’s stance on IPPs.
“This government supported the Independent Power Producers’ industry. NDP Leader John Horgan called it ‘junk power,’” he said. “Our government wanted to create jobs and opportunities across the province and in First Nation communities. The IPP industry has attracted more than $8.6 billion in investment and established valuable partnerships with local communities and First Nations.”
Despite that support, the relationship between the industry and the B.C. Liberal government is touchy.
After government approved Site C, the Canadian Wind Energy Association announced it was leaving the province as development prospects in B.C. “dimmed.” Many expect the recently-completed Meikle Wind farm near Tumbler Ridge will be the last major wind development in B.C. for years if the province faces an electricity surplus.
Kariya said the industry supported an “incremental” approach to power supply in place of Site C, the $8.8 billion BC Hydro dam under construction near Fort St. John.
“Rather than build one big mega-project that you have to wait ten years to hit the switch on—and if you don’t need the power then you have that situation—in our case, you could have incrementally built,” he said. “I’m not knocking Site C. I think we made our best case in 2014, government said ‘you guys make a good case, it’s close, we’re going to have a tough decision.’ They made their decision, and that’s what governments are elected to do.”
Around 20 IPP projects are still under construction, according to the ministry. British Columbians go to the polls May 9.