Big Problems with Government's 'Self-Sufficiency' Definition: Wild Rivers Breathe a Sigh of Relief
by Wilderness Committee
VANCOUVER – The provincial government’s cost-cutting report on BC
Hydro, released publicly yesterday, resulted in the Crown Corporation
requesting a 50 per cent reduction in proposed rate increases and the
elimination of up to 1,000 employees. The report recommended deferring
capital projects and also flagged major problems with the government’s
definition of “self-sufficiency” which is driving private power
purchases.
The report was frank in acknowledging that the government’s
current definition of “self-sufficiency” and the requirement to
purchase an additional 3,000 Gigawatt hours of electricity by 2020 was
problematic from an efficiency, planning and business perspective and
would place an “undue burden” on ratepayers.
“The government panel was right to be critical. The bloated
self-sufficiency definition is nuts because it forces BC Hydro to buy
IPP energy it doesn’t need and that would be sold at a loss south of
the border,” said Gwen Barlee, Policy Director with the Wilderness
Committee. “The fact that the panel acknowledged this definition is a
‘burden on ratepayers’ and a ‘significant planning constraint’ to BC
Hydro is very telling.”
Currently, the self-sufficiency requirement is based on every year
being considered “a critical low water” year forcing BC Hydro to
purchase far more electricity than it needs from private power
producers. BC Hydro is already on the hook for $30 billion in energy
purchase agreements to power companies and would need to spend billions
more to reach the current artificially high self-sufficiency
definition.
On April 7, 2011 Energy and Mines Minister Rich Coleman struck a
panel of government bureaucrats to review BC Hydro’s rapidly rising
costs. The review was prompted by Hydro’s three-year 32 per cent rate
increase proposal and plans for a $6 billion capital works initiative.
The report was submitted to the BC government in June.
“The recommendation to re-evaluate the inflated self-sufficiency
requirement should take the handcuffs off BC Hydro and could stop
scores of wild rivers from being put into pipes,” said Barlee. “It’s
time for an immediate moratorium on run-of-river projects and the
government needs wake up and pull the plug on the costly and unneeded
Site C proposal.”
Private power projects, especially “run-of-river” developments, have
been a hot button issue for the BC Government. The projects have been
heavily criticized for lack of planning, low environmental standards
and the impact to the financial viability of BC Hydro. According to the
report, in Fiscal 2010 IPPs produced 16% of total domestic electricity
requirements, while IPP electricity costs represented 49% of the
overall domestic energy cost.
—30—
The Wilderness Committee is Canada's largest membership-based,
citizen-funded wilderness preservation organization. We work for the
preservation of Canadian and international wilderness through research
and grassroots education. The Wilderness Committee works on the ground
to achieve ecologically sustainable communities.
www.wildernesscommittee.org
