Independent Power Producers (IPP)

Self-interest or public interest?

A person objecting to British Columbia’s Bill 17 – 2020: Clean Energy Amendment Act, 2020 suggested to me that it was unfair to First Nations.

They linked to a press release by First Nations Leadership Council (FNLC). It included this:

The proposed Clean Energy Act amendments… will directly undercut BC First Nations that have developed power projects by allowing the government to purchase power from other jurisdictions.

…Many BC First Nations are seeking their own projects and this Bill will impact their sovereignty and self-determination to build energy self-sufficiency and economic development initiatives.

This was my response to the correspondent:

It is absurd to require provincial “self-sufficiency” in a single commodity among hundreds of thousands.

If First Nations are already contracted, those agreements continue, despite being a multiple of market price.

The purpose of importing power, as you probably know, is to profit from the ups and downs of the spot market, selling BC’s dispatchable power when the price rises, replacing it, probably hours later, with cheaper power when our solar generating neighbours are in surplus. It’s prudent business.

Because BC Hydro’s consumers are using less electricity in 2020 than in 2005, it will be some time before new capacity is needed.

I suspect any group of First Nations would be unhappy if BC Government suddenly decided that only made-in-BC pick-up trucks would be licensed and having those trucks made in the province would cost 3x market price.

Of course, FNLC misleads by stating the amendment will impact their ability to develop projects. Those can and should proceed because self-generation will likely cost less than the prices BC Hydro charges all consumers but those in subsidized industries like fossil fuel production.

What FNLC and others shilling for IPPs are really saying is that British Columbia should continue giving a unique and costly advantage to one particular industry, a sector that has grown used to taking in close to a billion dollars a year in above-market payments.


John Calvert and Seth Klein provide a better explanation.

4 replies »

  1. Energy self-sufficiency makes sense in remote places, such as Douglas, at the north end of Harrison Lake. In places where BC Hydro is already running a dependable supply of (mostly hydro) electricity, it does not.

    The concept of “self-sufficiency” means you’re taking care of your own needs. Creating your own power, where there is only a diesel-generated option, is great use of modern technology.

    However, self-sufficiency can also be interpreted as “I’ll make a surplus of something and trade it for something I don’t have — but want or need.” This is likely what the FNLC is getting at… but as you’ve said many times: we don’t need anyone’s over-priced surplus electricity, especially not in the springtime.

    The BC Liberals created an inflated value for independent power and now, when the current government and Hydro have shut the door on new IPPs, we have complaints from those who want a ride on the gravy train.

    I hope successive governments will not only keep the door shut the door on future higher-than-market-value IPPs — but will also downgrade existing contracts when they come up for renewal. (I’d like to see an announcement, when such downgrades are made. Ratepayers need to know.)

    Liked by 1 person

  2. It was only a matter of time! The Canadian Press is reporting that the BC Hydro latest quarterly report is claiming the the pandemic is adversely impacting the Site C progress and budget!
    I’m sure you’re on top of this Norm. I’m only surprised that it took this long to claim another excuse.
    Still not too late to Shutter Down!

    Like

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