For about two years, BC Hydro has been working to cripple its Net Metering Program. The arrangement encourages customers to generate their own electricity and feed surplus power back to the grid.
When customers don’t generate enough electricity to meet their own needs, they buy electricity from BC Hydro. When they generate more than they need, that is taken by BC Hydro. A credit is banked in the customer’s account, which is then applied to offset electricity acquired from BC Hydro.
Once a year, if customers have credits remaining, they receive a payment from BC Hydro at a stated energy price, currently 10¢ per kWh.
The utility is seeking BCUC approval for alterations that will discourage people from participating in the program. These are the main changes:
- Limit the amount of electricity that consumers in the Net Metering Program can generate.
- Reduce the price paid for customers’ net contributions to the grid from 10¢ per kWh to the average Mid-C wholesale value. BC Hydro says that was 3¢ per kWh in 2017. US Energy Information Administration (EIA) reports that price is similar in the three months ended May 7, 2019.
BC Hydro says cutting the price by 70% for power supplied by its customers will improve fairness.
They did not comment on the fairness of continuing to pay independent power producers (IPPs) 10¢ to 15¢ per kWh, even when that power is surplus to needs and results in money-losing exports or reduced production in BC Hydro’s owned facilities.
The purpose for these changes is the utility’s survival in present form, despite technological advances.
Although BC Hydro is spending substantial amounts to convince citizens and regulators the Net Metering in present form is bad business, the program involves 1/10 of 1% of the province’s capacity and fewer than 2,000 customers. However, future growth worries the power company.
American economist Jeremy Rifkin says decentralized systems of advanced, clean-energy production and digital power distribution is revolutionizing the power industry.
Rifkin argues that as the ability to tap, generate and distribute power shifts from the exclusive province of governments and lease-holding corporations toward individual actors and communities armed increasingly with solar panels and wind turbines and smart grids, so too will bedrock relationships between producer and consumer, the government and the governed, be forever changed.
BC Hydro’s strategic planning in the last two decades has been massively flawed. Errors included a failure to accept that modern efficiencies resulted in declining per capita use of electricity by traditional customers. Despite changing markets, the utility added assets worth tens of billions of dollars, even while selling less electricity.
Additionally, BC Hydro tightly closed its eyes to advances in alternative generating methods. According to CBS News:
- The price of renewable energy has been dropping exponentially over the past decade—and shows no sign of reversing.
- Part of the reason is better technology—solar panels and wind turbines have gotten more effective at generating power
- Economies of scale help, too: “When renewables get cheaper, we buy more, and then they get even cheaper and we buy even more,” one expert said.
Rushad Nanavatty, principal at the Business Renewables Center at the Rocky Mountain Institute, a sustainability think tank, says consumers will bypass traditional utilities:
Now you see a situation where a group of buyers, each one of which might have a relatively small load, can come together and go to market with a much larger volume that would be attractive to developers, and make a deal that much more viable.
I’ve argued on this website that BC Hydro’s ratepayers are victims of corporate inertia. The company continues to do what it properly did for its first 45 years.
Unfortunately, now 58 years old, the company’s failure to adapt puts it on a path of destruction.
Categories: BC Hydro