BC Hydro

Death spiral

Like BC Hydro, a Utah power company owned by one of America’s richest citizens is seeking to kill off residential solar power. John Weaver reported in PV Magazine:

Rocky Mountain Power has proposed an almost 80 percent cut to the rate paid to net metered solar electricity, dropping it from the current 9.2¢/kWh to a rough average of about 2.0¢/kWh... The utility charges between 10.7¢ and 14.5¢/kWh for residential electricity.

This type of action, aggressively attacking the value paid to individual’s exporting electricity to the power grid, is a Buffett marching order to combat a potentially existential threat – the “death spiral.”

BC Hydro recognizes the same self-generation problem and the same potential death spiral. They know that as utility prices rise, even if government declares avoided electricity costs are subject to sales and incomes taxes, customers will be generating more of their own power.

As a result, BC Hydro has applied to regulator BCUC to discourage net-metering customers from feeding surplus power into the provincial grid. Utility executives think it unwise for consumers to produce electricity near to where it is consumed.

In 2018, the National Renewable Energy Laboratory in Colorado reported that solar power systems saw a 5% drop in residential costs and a 2.6% fall in commercial during the preceding year. The agency also reported:

Solar module efficiency is really racing upward, with commercial projects in California seeing a 9.1% efficiency increase over 2017, and the average residential  efficiency climbing 6%. As efficiencies increase, many other items drop in cost per watt, since solar module ratings drive so much of the system’s price.

The same research group also reported:

Declining costs in available technologies have propelled interest in energy storage forward like never before. The price of lithium-ion batteries has fallen by about 80% over the past five years, enabling the integration of storage into solar power systems. …And as communities and entire states push toward higher percentages of power from renewables, there’s no doubt storage will play an important role.

Compared with the same period a year earlier, the United States saw a 93% increase in the amount of storage deployed in the third quarter of 2019…

A consumer’s cost to self-generate electricity has been falling steadily for years, and BC Hydro’s prices have risen at 4x the rate of inflation since 2006. It is likely that self-generation costs will continue to decline and it is an absolute certainty that BC Hydro rates will elevate steadily.

Organizational inertia inhibits efficiency, change and modernization. If government were willing to alter the hebetude of BC Hydro’s management, consumer-friendly directions could be taken.

Unless major changes occur at BC’s public utility—something the Horgan Government seems determined to avoid—the 60-year-old company’s death spiral will advance.

Categories: BC Hydro

2 replies »

  1. Quote: “Organizational inertia inhibits efficiency, change and modernization.”

    Organizational inertia also ensures the continues six figured salaries paid to senior bureaucrats.

    The same is true with TransLink, and just about every other crown corporation, university and major corporation.

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  2. “Nations around the world are moving forward quickly with renewable energy technology. Whether it’s wind, solar, battery technology or electric vehicles, the costs of these are dropping and demand is surging. British Columbia has tremendous opportunity to produce renewable energy and export renewable energy technology. By providing investment and leadership, the Province of British Columbia can support our technology sector and foster the good-paying research, engineering and trades jobs of the future.

    A serious long-term commitment to energy efficiency in all our public buildings will save money, will reduce overall demand for energy, and create good-paying jobs and apprenticeships in every community in British Columbia. And for every dollar spent, retrofits create twice as many jobs as dam construction. (BC Stats)”

    Nice words. Unfortunately John Horgan was just kidding. And the joke was on us.

    http://bcndpcaucus.ca/powerbc-2/

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