BC Hydro

Path of destruction

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

10 replies »

  1. Given the small number of customers involved, as you outline, you really, really have to wonder about B.C. Hydro’s strategy. It could be though they see a time when more customers will want to participate in the program and that might “endanger” all their good friends who own IPPs, etc.

    There have been power companies in the U.S..A who tried to prevent people from using solar and refused to accept the incoming electricity.

    its all about the money. given the debt load B.C. Hydro carries, and if rates went up dramatically, I suspect many of us might have a really good look at that roof over our heads, especially strata complexes and put solar panels on our roofs. now that really would put a stick in the spokes of B.C. Hydro and their pals.

    Its time the current government did something about B.C. Hydro and their “little” plan. If the big girls and boys can receive 10 cents a K. then so can the small fry.

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  2. Unfortunately, your theory fails when you consider two things: the population of BC continues to grow and there is a big push on for electric cars (last I heard, if one our of four BC households buys an electric car today, our electrical grid crashes tomorrow). We should have built Site C ten years ago.

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    • So much misinformation in two sentences.

      Firstly, BC’s population grew 16% from 2005 to 2018. Yet, BC Hydro sold less electricity in 2018 to residential, commercial and industrial customers than in 2005. Growing efficiency and improved conservation can keep per capita consumption on the decline.

      Should have built Site C ten years ago? That would have increased the surplus power available for sale into weak markets at a fraction of its cost. Alberta won’t pay 12¢/kWh for BC power when it can produce its own for less than 4¢/kWh.

      One in four households are not going to buy electric cars today and crash the grid tomorrow. Pure electric vehicles (BEVs) accounted for less than 1% of sales in 2018 and because of range anxiety, most of those are for use in large urban areas.

      The numbers of BEVs may grow but internal combustion engines will remain the preferred option in BC for years to come, particularly as that technology improves

      More importantly, renewables like wind, solar and geothermal provide opportunities to meet future demand at low costs without destroying prime farmland or areas that are culturally significant to First Nations.

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      • “By day, Alec Tsang works as a senior technology analyst at BC Hydro, where he’s the public utility’s point person on electric cars.”

        “One study by the University of Victoria’s Pacific Institute for Climate Solutions found that even in winter, when electricity demand is highest, B.C. had the unused capacity on its grid to charge nearly 2.4 million light-duty vehicles — almost all the 2.8 million registered vehicles in the province.
        ‘Even the most optimistic projections of electric vehicle adoption still represent a really gradual load growth on utilities’ grids,’ Tsang said. ‘So in terms of generation and transmission, that large perspective, most utilities wouldn’t have any problem meeting that demand.’”

        https://www.cbc.ca/news/technology/canada-electric-cars-electricity-system-1.3526558

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    • Exactly, Stephen. If I had solar panels on my house and was being paid IPP rates for my excess power: how could I legitimately rail against the BC Liberals’ IPP program?

      If Hydro gets away with this downgrade of home-owner-power compensation, they should be announcing the same treatment for all IPP contract renewals or start-ups. The BCUC should demand it.

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  3. The grid will definitely not collapse even if more than 25% of BC drivers would switch to BEVs tomorrow. Here are the calculations:
    1. BC Hydro has 1.78 million customers (from BC Hydro’s site in 2017).
    2. a quarter of those running BEVs would be 445,000 customers.
    3. Half of BEV owners also install solar to compensate for the increased demand, result: 222,500 BEV customers with demand for electricity.
    4. Average consumption of electricity for a BEV driven 15,000 km per year (Canadian average) is 2100 kWh.
    5. 222,500 BEV owners using 2100 kWh per year, increases demand on BC Hydro system by 467 GWh
    6. in 2017, BC Hydro sold 57,652 GWh.
    7. Increased demand on the system due to 225,500 BEVs amounts to 0.8 %.

    0.8%! Hardly a ‘collapse’.

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  4. Thanks for your elucidating figures t_fish. I happen to be one of the 1,861 BC Hydro customers to avail myself of this excellent opportunity. The other 1,778,139 customers that have not taken advantage of this offer….should. I produce my own power for my own use, and when I can’t because of snow or cloud I get to use their power which I can pay back when my sun shines. I have no interest in becoming an IPP, and if I inadvertently do, I could care less whether I’m paid a nickel or a dime – I’m not in it for the compensation.
    I understand that with the installation of 4 panels, which BCH will allow, I can generate sufficient power to run my EV.
    I do however have two bones of contention:
    1) Why in the world did Hydro publish 500 plus pages of garbage in their latest BCUC amendment for the edification of it’s 1,861 solar contributing users? I’ll bet it created a number of person years employment to produce; and many more to read, let alone comprehend.
    and
    2) Why wouldn’t they ENCOURAGE the production of excess power by Solar contributors thereby further negating the need for useless projects like Site C?

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  5. never did get a handle on math, but when I see the stats you produce and those by some others, I can follow it. the grid is safe, no collapse.

    We’ll see more people purchasing hybrids. They work well in rural and semi rural areas. But they are expensive and many people simply can’t afford them, not to mention their repair bills if they do break down.

    We live in an earth quake zone, so personally I would not purchase an all electric vehicle without having a gas powered vehicle.

    For commuting electric and hybrids are great. Driving less than a couple of times a week, it makes economic and environmental sense to keep the gas vehicles. Too many people toss out perfectly good products because there is something else which is more “efficient”. In my opinion, that isn’t very environmental at all.

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  6. Sadly, the entire province and its bureaucracies are guilty od\f lazy and dated thinking.

    As bureaucrats advise politicians, they then become engulfed in dated and lazy thinking,

    We see in your item, BC Hydro’s grossly dated and now incompetent planning and compared to more enlightened areas, such as Europe, household generation of power is now common place.

    Hydro’s attempt to curb household generation of power smacks of industrial senility, where the future is based on big and expensive hydro projects and not much cheaper and far more efficient local, household generation of electricity.

    We see the same thin in transit, with bureaucrats at TransLink fixated on SkyTrain light-metro and big ticket subways as a transit cure all, ignoring the fact that they don’t work and much cheaper yet more efficient LRT is the key to reducing congestion. This 1970’s vision of transit is slowly killing public transport with massive costs and huge debt, yet little modal shift from car to transit.

    The highway’s ministry is also fixated on 1950’s style of bigger and better highways to cure congestion, yet bigger and better is soon choked with cars.

    Almost every bureaucracy in the province is hiding behind a wall of hubris and ennui, oping that yesterdays solutions will work in the 21st century.

    Well they don’t.

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