BC's
new Energy
Plan came with a timeline,
but the timeline is missing one very important item; when
will BC Hydro's Integrated
Electricity Plan (IEP) be updated so as to be consistent
with the Energy Plan? That's like having a Green Throne
Speech followed by no provision in the budget for Green
initiatives. Without an updated IEP, much of the Plan is
just nice sounding rhetoric.
Appendices
A-F to Hydro's 2006
IEP, which is currently before the BC Utilities Commission,
are 628 pages long. The "Load and Resource" data
for Hydro's projections are in Table E-5 (pdf page 178).
Using that data you can see that Hydro projected a shortfall
of 23,100 GWh (gigawatt hours) by 2020; if 50% of future
needs are going to be met through conservation, as promised
in the Plan, then 11,550 GWh must be saved through some
form of demand management. That's 15% higher than the 10,000
GWh that a fact
sheet released with the Plan says will be saved, and
about 20 times more than Hydro expected to save through
demand management in 2006. In today's terms, it is equivalent
to eliminating 18.6% of current usage, or unplugging about
1 of every 5 Hydro customers. Perhaps that is why the Campbell
government described its conservation objective as "ambitious";
we'll have to wait to see what is required to make the objective
attainable.
BC Hydro
president, Bob Elton was quoted
by the CBC speculating about encouraging conservation
by going to a two-tier rate for residential customers. One
of many problems with that scheme is that residential electric
meters can't handle that kind of billing. Hydro needs to
provide an estimate of the cost of converting residential
electric meters throughout the province.
A goal
of the Energy Plan is to make BC electricity self-sufficient
by 2016. BC Hydro's 2006 IEP shows that about a third of
BC's electricity will come from private "IPPs"
(independent power producers). That leaves the problem of
what happens when contracts between Hydro and the IPPs expire
in 20 or 30 years. Unlike the heritage that WAC Bennett
left for future generations, the heritage of expiring IPP
contracts will leave future generations with private power
producers who will be free to sell to anywhere on the North
American power grid at prevailing market prices. Rather
than capturing those future economic rents to be used in
BC, as is the case with dams on the Columbia, the future
profits will go to the bottom line of dozens of private
companies. The long term plan of the Campbell government
appears to be the privatization of power generation. How's
that for electricity self-sufficiency?
From
the point of view of conservation, higher electricity prices
are probably needed. In the words
of the Plan: "A key demand side management tool
is pricing structures to either discourage consumption overall,
or shift demand to less costly periods." For decades
BC industry, as well as residential consumers, have benefited
from some of the lowest electricity rates in North America.
It doesn't take an economist to point out that lower prices
mean higher consumption. Energy Star appliances and energy
efficiency standards for building codes will help with conservation,
but those steps will be undermined if the policy of the
government is to keep electricity rates as low as possible.
Don't hold your breath waiting for a political debate on
that topic, at least not before the May 2009 election. The
issue shouldn't be whether we pay higher rates, but who
benefits from the profits derived from higher rates and
what mitigation should be put in place for low and moderate
income families who will pay much more in increased electricity
rates than they have saved with tax cuts.
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