Electric Power Rates In BC Ever Increasing, Why

Why is it that BC Hydro customers are facing an almost never-ending series of rate increases when electric power is in ample supply, market prices for electric power are very low, the efficiency of producing electric power from natural gas is continuing to improve, and oil and gas markets are at the lowest level in years?  Well, contracts are contracts.  Remember the Gordon Campbell years when BC was to become a “renewable energy powerhouse?” With all the enthusiasm to develop renewable power, the Clean Energy Act was implemented in 2010 requiring Burrard Thermal to be shut down, 93% of the power produced by BC Hydro must be renewable, and BC was to be self sufficient.  In order to achieve these objectives, BC Hydro proceeded on a renewable energy buying spree.  So, as a result fiscal year 2015 purchases of electric power under those expensive long term contracts with IPP’s has increased by 2300 gigawatt hours (about half the annual production expected from Site C) at a total cost exceeding market value of at least $230 million per year or approximately 5% of  BC Hydro’s revenue from sales to domestic customers.  And there are more IPP projects coming on line in future years.

More details about electric power markets  and their importance to BC electric power consumers in future blogs.


About Daniel Potts

Dan Potts is a retired 75 year old grandfather and former forest industry executive. He earned a BS degree in Chemical Engineering at the U of Washington, 1962; MBA, Stanford University 1964. Major part of career was location manager of five different pulp and paper mill locations. These highly energy intensive facilities led to the development of an interest in energy issues. Upon leaving the forest industry in 1999, Potts became the Executive Director of the trade association representing BC Hydro's largest customers. This association sponsored intervention before the BC Utilities Commission on various proceedings affecting industrial customers. It also represented its members to government and BC Hydro when appropriate. Potts retired in 2010. He lives with his wife in West Vancouver and frequently travels south to visit his four children and eight grand-children.
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