Lindsay Brown is a reliable information provider, particularly about energy in British Columbia. Her Twitter thread today should be required reading for every politician and BC Hydro ratepayer. It’s repeated below with permission.
Ms. Brown wants us to think about smarter ways to manage the provincial utility. Its job should be delivery of reliable, clean energy throughout BC, at the best possible price to consumers. Instead, the Horgan Government decided an important purpose of BC Hydro is to reward NDP financial backers with highly paid employment.
The Premier and his many clever advisors understand the Sunk Cost Fallacy but they believe that citizens of BC do not. As a result, the prime message to the public is not about political debts of the BCNDP. It is, “We can’t have all this money spent on Site C and get nothing in return.”
The reality is that doing the right thing—abandoning the project—would be an immediate admission of failure and poor judgement. Proceeding with an uneconomic megaproject requires no such admission.
I’ve been having a long, illuminating exchange on the future of electricity generation and distribution with an electrical engineer, a former top BC Hydro grid expert. The future that’s coming is counterintuitive. Many of us think we see what’s coming, but we’re all wrong.
How wrong are we about our electricity future? We are Great Horse Manure Crisis of 1894-level wrong. In 1894, London faced a mountain of horse manure & dead horses. They predicted only an expansion of the problem. They didn’t see transit/cars coming.
For those of us opposing the unnecessary Site C dam, one of the most troubling & persistent public misperceptions we face is the false idea that:
WE ARE GOING TO NEED A SHEDLOAD OF ELECTRICITY TO DECARBONIZE OURSELVES!! EVs ARE COMING! OH NO! BUILD MORE DAMS, MAYBE A REACTOR!
This MORE ELECTRICITY!! myth, driven by private interests who have much to gain from large installations and megaprojects, ignores the fact that due to fast innovation, our electricity use (load) is flat or declines even as economies and populations grow: it has become decoupled from GDP.
I’ll come back to this later, but you can read this FAQ on it (item #4). BC Hydro’s own EV expert states we have enough electricity for BC to switch to EVs and cars will charge on district energy.
Electrical engineer: Asking people to use less electricity is good, but the biggest drops in consumption come from technological innovations: eg. the massive drop in load from the system-wide switch from incandescent -> compact fluorescent -> LED. Dwarfs all individual efforts.
These tech innovations for energy conservation are driven by various things – government funding for R&D, universities, demand… Many more are coming. The myth we must chuck is the idea that to make big green moves means using tons more. Old thinking. Reality: ever more efficiency.
I think we can open our minds to understand growing efficiency: i.e. we can use less electricity while increasing our activities. But other glimpses of the future are more surprising than this decoupling of energy use from economy size. I work on energy and I found them astounding.
A couple weeks ago the electrical engineer/grid expert casually says to me:
In the future, electricity will effectively be free. You won’t pay per kilowatt; you’ll pay a subscription fee, like for your cell phone & internet. This is the only way to avoid “utility death spiral.”
First, what’s a “utility death spiral”? An energy utility pointlessly spends too much on new generation (#SiteC). It raises electricity rates to cover costs. As rates rise, consumers reduce usage and/or go off-grid. Utility’s revenues fall. It raises rates to compensate, etc.
Even without adding pointless corporate welfare projects like Site C, utilities have costs. They have to maintain dams, wires, grid. With so much renewable energy coming online, market price for electricity is low and, contrary to public opinion, we make little/nothing from exports.
Ability to export electricity depends on time of year/day etc. but just to give you an idea of how unprofitable exports are from Site C, say: It costs us over $125/MWhr to produce electricity with Site C and we can sell it – when we can even find a market for it, at about $25MWhr.
With cost of electricity cheap & falling, we can see a future where electricity is worth zip but it costs the utility to deliver it to your building/business. Currently the bulk of your bill is your usage, plus a small service fee. This will reverse. I had many Qs when I heard this!
It’s fairer to pay the utility for its delivery service when the trend of solar, wind & legacy energy is that the prices go below zero at times when utilities can’t get rid of electricity. Inability to make revenue means no $$ to pay for maintenance on infrastructure. SEE TEXAS.
The @BCUtilitiesCom, whose mandate is to protect BC consumers, sees the problem BC Hydro will face and is pushing it to switch to a flat subscription rate billing system. BC Hydro is in denial and its digging its heels in. Even tho it’s in deep financial trouble from Site C and IPPs!
So let’s go through all the Qs I instantly had for the engineer. Q: Won’t some people be paying more? Esp. if they’re conserving & keeping their bills low. A: Maybe, but not as much as if our current rates doubled due to #SiteC, which is possible. You could make it progressive.
The flat subscription rate would share the rate burden more equally in general, but you could make it progressive if there were, say, more charges per unit for larger homes. The kinks could be worked out to make it more fair. That’s just details.
My instant 2nd Q: but then won’t people waste electricity if they’re not paying per KWh (kilowatt hour)? Won’t it harm conservation? A: As I said, conservation comes from system-wide changes much more than from individual actions (tho they’re good too & you could reward them).
The basic switch in mindset is that the utility becomes a wires owner and is indifferent to where generation comes from. It is paid to keep the wires up & connected. It lets people use electricity & becomes responsible for mandating policy & tech that gets people to use less.
What this policy would look like would be that BC govt/BC Hydro would mandate heat pumps, get people off space heaters and gas furnaces. The utility can fully fund these programs because it will protect its revenue when customers are more efficient.
Why do we never consider that BC Hydro could put solar panels on your roof? They’d belong to BC Hydro & you wouldn’t have to shell out. You only pay for the service. It’s like Telus or Shaw technically owning your modem. This is FAR cheaper than Site C for both BC Hydro & us.
Those annoying BC Hydro ads with “Dave” are all about keeping your bill down with savings so you don’t get mad at Hydro when it applies to BCUC for huge rate hikes due to Site C. It’s akin to Horgan blaming youth for #covid19bc instead of looking to his own policy.
Personal responsibility for energy use/Covid/whathaveyou is fine, but we live in a society and real change happens system-wide, with policy, & pretending it doesn’t is at best poor govt/governance, & at worst a cynical deception. We should re-empower BCUC to force these changes