Council asks BC Hydro for a level playing field

Trent Ernst, Editor


Tumbler Ridge Council is asking BC Hydro to level the playing field for power producers in the Northeast.

Currently, the price of energy sold to BC Hydro under the Standing Offer Program uses a base price determined by region.

If an Independent Power Producer (IPP) were to set up a project in the Lower Mainland, they would be paid a base price of $103.69 per megawatt hour (MWh)

If they were to set up the same project on Vancouver Island, they would be paid $102.25/MWh.

But the same project, developed in the Northeast, would only be paid $94.86/MWh.

That is the lowest of any region in the Province, and nearly ten percent less than a project in the Lower Mainland.

Economic Development Officer Jordan Wall says this isn’t fair. “BC Hydro’s Standing Offer Program right now offers a lower price for electricity for people who produce power in Northern BC. Companies here get nine percent less for energy they produce as compared to Lower Mainland.”
According to BC Hydro, they adjust the price paid to proponents based on the location of the project. “BC Hydro does this to reflect transmission infrastructure costs and the impact of electricity losses as the generated electricity is moved throughout the province,” says a Hydro spokesperson. “Load centres are distributed throughout the province, but the main load centre is currently located in the Lower Mainland.”

Wall says this way of thinking is outdated or at least on its way out. “With energy requirements growing by leaps and bounds up here that’s not the case anymore. It’s being produced here, and it’s being used here.”

As a result, he says, IPPs who decide to build up here are being punished unfairly. “Council is requesting that BC Hydro end that practice. Let our power producers get the same value.”

Wall says that changing this wouldn’t affect a business’s ability to compete, other than the scenario where nine percent would make the project viable. “Nine percent is a significant calculation in a project,” says Wall. “That’s like growing your revenue by ten percent.”

Indeed, in 2013, Pattern Energy pulled the plug on their Tumbler Ridge Wind Project, saying it was “not financially viable,” primarily due to the high tax rates.

At the time, the class 2 mill rate in Tumbler Ridge was $56 per $1000, or 5.6 percent. They were hoping to have it lowered. While they did not give an actual figure for what they were looking for, speculation is they wanted it dropped two or three percent, which could have made the project viable.

However, warns Wall, even if this petition is successful, there’s no guarantee that the rates in Northern BC will be bumped up. “When they change it, are they going to bump us up to the Lower Mainland Rate? A mid-level rate? Maybe they will get rid of this altogether. It wouldn’t be fair to say if we’re successful BC Hydro would be paying IPPs nine percent more. Maybe BC hydro would drop everyone else’s rates. Who knows?”

But what it would do, he says, is level the playing field, and not make Northeastern BC a less desirable place to build a project than further south.

Wall says the District will be reaching out to other communities in the Northeast and asking them to write letters to BC Hydro as well.