BC Hydro

BC Government: do the right thing!

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

Categories: BC Hydro, Site C

7 replies »

  1. Good article Norm so thanks.

    We all know the reality that when prices increase for nothing discernable that is new and better, humans begin to find ways of conserving or substituting.

    In formal circles this dynamic is called the “elasticity of demand”. In economically settled times the needle on the dial of living costs only moves marginally but in unsettled times, like now, it changes fast and a lot.

    BC Hydro has not processed the unwillingness or inability of its customers to pay what the monopoly wants and likely needs.

    Cheers

    Like

    • Thanks for bringing up elasticity, Erik – I was going to include an explanation of that but the thread was getting unmanageably long and I thought people might get overwhelmed. I’ve got a few more points to add to the thread today and will include your comment there.

      Like

      • Hi Lindsay;
        Yes it is hard to know when enough is enough. Today I ventured into the area of social justice/fairness because politicians and others, who are being paid for such work, are not doing their jobs. Instead they are listening only to those operating in self-interest ways.

        There is all sorts of documentation of this selfish condition prevailing in our culture for at least 60 years. Sort of validates the Obelisk in Froggner Park, Oslo.

        Even though I am part Norwegian I am unable to live that way.

        Like

  2. This is terrific Norm! I’m glad to see others catching on to this reality!

    So many years have been spent trying to educate people on how the electricity sector will be disrupted and you usually get blank stares.

    Tony Seba is a great resource for forecasts on the innovation that will occur in the arena. I highly recommend people look him up on YouTube.

    Thank you for continuing to broadcast the reality of our situation. Too few know what is going on in BC and we need a more informed electorate if we want a functional democracy.

    Like

    • I know it is slightly off topic but worth mentioning in this discussion, as it is a demonstration of the prevailing political DNA in BC. It demonstrates what we citizens are up against in BC.

      Starting almost at the beginning of the current century the BC Law Institute at UBC began publicly working on an examination of BC Contract Law and its unfairness. This work resulted in a published report in 2011 with the findings that yes BC Contract Law was/is unfair to the citizens of the province. The report did not stop with this conclusion but went on to suggest corrective legislation.

      Now from personal experience I can say , the few opportunities I had to ask Liberal and NDP elected members or candidates, there was universal aggressive disinterest in this condition of unfairness. The only MLAs showing curiosity were Green candidates.

      If you wish to test this issue try asking, in writing, the BCUC for a copy of an Independent Power Producer (IPP) contract. The last time the then Auditor General disclosed the total of all “Contractual Obligations” for BC only was in early 2017, just ahead of a provincial election. The then total wasv$100 billion of which BC Hydro’s share was $60 billion. These amounts are over and above “debt”.

      Just so everyone is current on a little of what is coming, the current Auditor General recently delivered one of his first reports following his recent appointment. In that report one of his announcements was that as of a year from now the BC government financial report will discontinue the use of the GAAP system and to be replaced by a different system. I have no idea if this means more useful disclosure of our provincial finances and so far neither the Federal AG or the Provincial AG have helped me understand the significance. Dismissal of GAAP maybe good or not.

      What the Governments, BCUC and BC Hydro all use for governance are laws which is nothing close to issues of social justice. I proved this last year in the Federal tax court where from my evidence the judge found in my favor.

      Liked by 1 person

  3. A memo on electrical usage.

    As many here know, the “Eye” uses transit as a reference point to the discussion of BC Hydro, Site C ,etc. and the following maybe instructive.

    When the Linear Induction Motored SkyTrain was first built, the LIM’s consumed about 25% less electricity than their ‘squirrel cage’ electric motor counterparts on light rail. This was one of the selling points.

    Today, because of modern design and advances in electri motors, the LIM’s now consume 45% more power than a modern electric motor used on light rail vehicles.

    This makes one go hmmmm.

    Assumptions made about BC power consumption and generation in the 1970’s and 80’s are not valid today.

    Electric motor design is also rapidly changing, with new concepts, materials and designs, making them even for efficient for future use.

    Think about it, LED lights and a host of other technical advances for commonly used products, which consume far less electricity than just a decade ago.

    Site C more and more looks like a dam with no future and a very chequered past.

    Liked by 1 person

  4. Good article Lindsay and Norm. Despite Hydros best efforts at convincing people that mega dams provide clean energy, the contradiction between those ads and their ongoing destruction of a very valuable part of our environment, has to be confusing for people. Sure Hydro wants to sell us more electricity and telling people that it is clean stops some people from trying to use less.

    I agree that the tech fixes for over consumption have been very good over the last couple decades. In a sense society has used those fixes as low hanging fruit, cheap and easy collection rather than holistic energy planning and use. The BCUC definitely needs to be reawakened and put back to the uses that it was designed for, namely examining proposals for developments and uses of electricity. A broad ranging and ongoing examination of our options should be its first priority.

    We have been subjected to a lot of quibbling over minor details, before the Commission, but we are stuck in the same general direction of producing and consuming more for the sake of producing and consuming more.

    Liked by 1 person

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