Proposed legislation would end B.C.’s mandate to be electricity 'self-sufficient,' and the Greens say that’s bad news for small-scale renewable energy producers, including First Nations
By ZoëYunker, for The Narwhal
The BC NDP came to power promising to launch major jobs initiatives in clean energy. “We will bring investment in wind, solar and other clean energy projects back to B.C., and ensure we are including communities in the benefits of these projects,” the party’s election platform stated.
But now, in an about-face that has raised the ire of First Nations, the renewable energy industry and the BC Greens, the NDP government is proposing significant amendments to B.C.’s Clean Energy Act through Bill 17 that will slam the door on new wind, solar and run-of-river power development in B.C., leaving First Nations that have planned and invested in clean energy projects deeply concerned.
“I really believe our Indigenous nations could be leaders [in the renewable energy sector],” said Kukpi7 Judy Wilson, secretary-treasurer of the Union of British Columbia Indian Chiefs. “I think Bill 17 causes a retraction of that.”
The NDP says the amendments contained in Bill 17 are necessary to allow B.C. to buy more cheap electricity from the U.S. on the spot market. (B.C., which has a growing energy surplus, also sells electricity to the U.S. on the spot market.)
But the BC Greens say Bill 17 is unacceptable in its current form, in large part because it would severely restrict the ability of First Nations to participate in the renewable energy sector. The party’s two MLAs, Sonia Furstenau and Adam Olsen, said they won’t support the bill.
It’s not the first time the provincial Greens have said they would vote against a NDP bill since the Green caucus agreed in 2017 to support a minority NDP government by voting with the NDP in the Legislature. Last year, Green MLAs repeatedly voted against Bill 10, which introduced tax breaks for the LNG industry.
But unlike the LNG legislation, the NDP can’t count on the support of the BC Liberals — big proponents of independent power production — for Bill 17.
The ensuing stalemate means Bill 17 has quietly stalled, with this being the final week of the summer sitting of the Legislature. If the bill is not passed by February, it will die on the order paper.
Here are 11 things you need to know about the bill that managed to put the Greens and Liberals in an unlikely alliance.
First of all, what is the Clean Energy Act?
The Clean Energy Act was passed by the former Liberal government in 2010.
The act set the stage for B.C. to make unprecedented investments in renewable energy. Former premier Gordon Campbell said the act would allow B.C. to become a leading North American supplier of “clean, renewable, low-carbon electricity.”
Included in the act was the provision that B.C. procure 93 per cent of its energy from “clean,” or renewable, resources. The act also contained a “self-sufficiency” clause, requiring B.C. to generate enough electricity in-province to meet its own needs, provided that water conditions are average or above-average.
The act opened the door further for independent power projects to supply wind, solar and run-of-river electricity to the grid. It also allowed the Liberal government to proceed with a big hydro project BC Hydro had planned for decades — building the Site C dam on the Peace River in the province’s northeast — by stripping the watchdog B.C. Utilities Commission of its role to determine if building the dam was in the public interest. The utilities commission had previously rejected a proposal to build Site C.
What’s the controversy over Bill 17?
Firstly, the proposed changes to the Clean Energy Act would remove the provision that the province be electricity self-sufficient, provided that water conditions are average or above-average.
That would allow B.C. to import more cheap electricity from the U.S., even when the province can generate more than enough energy to meet its needs. In other words, water could be held back in B.C.’s hydro reservoirs, instead of being released to produce power, if it’s cheaper to import electricity from the U.S.
In email communication with The Narwhal, the province said that BC Hydro would also consider B.C.’s energy objectives from the Clean Energy Act in its energy procurement, including encouraging economic development and fostering the development of First Nations and rural communities.
The province did not respond to the Narwhal’s request for clarification on how it would weigh those objectives in relation to potential cost savings from imported energy.
Secondly, the changes would alter the rules around the province’s “clean” energy requirements.
Bill 17 mandates the province to increase “clean electricity” use from 93 per cent to 100 per cent, raising the question of what would happen to gas-fired facilities such as Island Generation.
But that doesn’t mean all the energy used in B.C. would come from renewable energy sources.
B.C. Energy Minister Bruce Ralston said the province could continue to import “non-clean” electricity from outside of the province, as long as it exports the same amount of its own “clean” electricity to the U.S.
Why do we keep putting the word “clean” in quotes, you ask? Well, the proposed amendments also allow the government of the day to determine what “clean” energy is.
According to the Union of B.C. Indian Chiefs and the BC Green Party, any type of power production — including coal and gas — could be included in the government’s definition of clean energy.
Notably, clean energy is not the same thing as green energy, which requires energy to meet certain environmental standards, such as protecting biodiversity, in addition to being low in carbon.
Why are the Greens opposed to the changes?
The Greens are opposed to Bill 17 on a number of counts.
Olsen said the party wants to see a clearly legislated definition of clean energy that doesn’t allow wiggle room for fossil fuels.
Furthermore, the Greens reject the NDP’s attempt to remove the requirement for electricity self-sufficiency.
The Greens are adamant that any changes to the self-sufficiency mandate need to be made in discussion with First Nations who have made substantial investments in B.C.’s renewable energy sector.
“It was very clear that those who are going to be most deeply impacted by this change were not consulted. They were not involved in the discussion,” said Olsen.
With the myriad threats from climate change and a need for economic opportunities across the province and particularly in Indigenous communities, Olsen said B.C. is facing big decisions about its energy future. Scrapping the requirement to be self-sufficient in energy production, without consultation, cuts the public out of the discussion, he said.
“This needs to be a very careful conversation, and not just chased by a single bottom line.”
What does the self-sufficiency mandate actually mean?
B.C.’s electricity self-sufficiency mandate is a bit of a misnomer.
Self-sufficiency means B.C. needs to generate enough power to theoretically meet its energy needs in-province, but it still trades a lot of power.
In 2018, for instance, B.C. imported more electricity than it exported — not because B.C. has a power shortage (it has a growing surplus due to reduced demand, including the recent spate of mill closures) but because Powerex reaps bigger profits when BC Hydro slows down generators to import cheaper power, especially at night.
B.C. is connected to a power grid that extends throughout Pacific Northwest and trades power via its trading arm, Powerex — a corporate subsidiary of BC Hydro that trades electricity with the U.S. and Alberta, on what’s called the Columbia Basin Hub. Think of a stock market, except it’s for electricity.
Powerex buys power when prices are low and sells when prices are high.
In 2019, even though B.C. had surplus energy, the province imported more power than it exported, because it was cheaper to import U.S. power than to generate power from the province’s dams and reservoirs.
Are B.C. energy imports clean?
When Powerex buys power from the U.S., it buys from some jurisdictions that primarily generate electricity from coal and gas.
The province does most of its trading with California. Although California has plenty of solar and wind energy it also powers 46 per cent of its utility-level energy with natural gas.
Other trading partners lean on coal to generate their electricity. Wyoming— another trading partner for B.C.— gets 90 per cent of its power from coal.
Kai Nagata, communications director for Dogwood, said there’s no way to determine whether the power used in B.C. comes from fossil fuel energy imports or if it’s generated within the province.
“I don’t see any mechanism by which to transparently review where the electrons come from,” Nagata said.
Why do the proposed changes matter?
The NDP’s proposed amendments to the Clean Energy Act open the door for B.C. to import more gas and coal-fired electricity. Observers say it could also likely be the nail in the coffin for independent power production, including projects that First Nations lead or in which they are involved.
BC Hydro hasn’t put out a call for power in more than ten years, Olsen said, and that might not change anytime soon. “I think there’s a really good case to be made that there wouldn’t be a call for power.”
In 2018, the NDP suspended the standing offer program that provided opportunities for small-scale renewable projects to sell power to the grid.
Observers fear that removing the self-sufficiency mandate could mean that contracts for projects already in operation might not be renewed.
“If that self-sufficiency requirement isn’t there, it does allow them [BC Hydro] to make a stronger argument for not accepting already- commissioned power,” says Kara Shaw, associate professor in the school of environmental studies at the University of Victoria.
That includes projects led by, or involving, First Nations that have already made significant investments in the renewable energy industry.
B.C.’s first operating wind farm, AltaGas’ Bear Mountain Wind Park near Dawson Creek, B.C, has been in operation since 2009. Photo: Don Petitt
Cole Sayers, coordinator for the BC Indigenous Clean Energy Initiative , said his community, the Hupačasath, signed a 20-year energy purchase agreement contract with BC Hydro in 2005 for a run-of-river project If the contract isn’t renewed, the Hupačasath will have to continue to foot the bill for the debt payments for construction costs, Sayers said.
“We’ll just barely be able to pay if off, and then it’ll sit there,” he said.
Sayers said the project’s revenue is on par with the funding they receive from the federal government, and can generate enough power for 100,000 homes. If the project stops, it would “have a huge impact in our community,” he said.
How does Bill 17 square with the province’s commitments to reconciliation with First Nations?
First Nations were not consulted on Bill 17, the Union of BC Indian Chiefs confirmed, despite a recent survey that found 98 per cent of First Nations are already involved in, or want to be involved in, renewable energy development.
That’s a problem, Wilson of the Union of BC Indian Chiefs said, particularly in light of the province’s recent commitment to reconciliation with First Nations.
Seven months before Bill 17 was tabled, the B.C. government passed the Declaration on the Rights of Indigenous Peoples Act.
The act enshrines the United Nations Declaration on the Rights of Indigenous Peoples, which states that “Indigenous peoples have the right to participate in decision-making in matters which would affect their rights.”
But Bill 17 flies in the face of that commitment, according to Mariah Charleson, vice-president of the Nuu-chah-nulth Tribal Council. “When we live in a province that is saying this on the one hand, but on the other hand [..] amending an entire act without bringing any First Nations people to the table for consultation, that is a huge concern.”
Wilson said the government’s handling of Bill 17 and other bills signals that it hasn’t grappled with the declaration’s implications.
“We’re seeing a lot of legislation come out now where it’s more unilateral.”
Mark Starlund, president of the Gitanyow Economic Development Corporation, thinks the government hasn’t realized that implementing the declaration in full will lead to financial costs. “You can’t verbalize something that you’re all supportive of but not actually support it physically.”
Starlund said supporting Indigenous involvement in renewable energy development could mean continuing to buy renewable power from independent producers even though importing American power might be cheaper.
Sayers said Bill 17 could compound the losses First Nations have already incurred from big hydro dams that have damaged fish habitat and flooded Indigenous territories.
“There’s [a] very colonial history to that energy infrastructure,” he said.
Would Bill 17 save B.C. money?
When Ralson introduced the bill, he said repealing the sufficiency mandate would allow B.C. to consider out-of-province options to meet future demand and keep hydro rates affordable.
That’s important, said energy expert Eoin Finn, a retired KPMG partner and energy policy researcher, because BC Hydro is not in good financial shape. “They’re in serious financial trouble.”
With over $25 billion in debt, BC Hydro has four times more debt than it does assets, Finn said.
Buying more U.S. power could save money for a number of reasons.
Firstly, power bought on the Mid-Columbia hub — referred to as “Mid-C”power — is cheap. It fluctuates according to the season and the time of day, but this year it averaged out to $20 per megawatt hour.
That’s much cheaper than the future cost of Site C dam power, which independent experts peg at around $120 per megawatt hour — and that’s even before anticipated unknown cost increases to the current $10.7 billion price tag.
Secondly, by scrapping the self-sufficiency requirement, the province would almost certainly buy less energy from independent power producers. The NDP, which is ideologically opposed to private power, claims independent producers are costing the province a lot of money.
Zapped, a report commissioned by the NDP government, claimed independent power projects cost the government $16.2 billion over a 20-year time period. The report said the government overpaid for power that it didn’t need.
“The old government signed insider deals for power at five times the market price,” Ralston said.
According to BC Hydro’s most recent annual report, the average price of independent power producers is $87 per megawatt hour. But some small family-run power projects whose contracts have not been renewed by BC Hydro said they were receiving far less.
Laureen Whyte, executive director for Clean Energy BC, said independent producers haven’t been given a fair trial.
Independent producers “absorb all of the risk” of developing their own projects, Whyte said, meaning that they’re not on a “level playing field” when competing against BC Hydro or power producers in the U.S.
That’s because BC Hydro can shift its cost overruns onto ratepayers or — as was the case last year when the NDP government gave BC Hydro a $1.1 billion bailout — onto taxpayers. U.S. power producers can receive ample subsidies from their federal government. Yet independent producers in B.C. face most of the costs of developing projects on their own, Whyte said.
What about wind and solar?
Finn pointed out that B.C. has abundant capacity for wind and solar power, which pair well with B.C’s already constructed dams and reservoirs that store power.
But Whyte said all new wind and solar projects are on ice without calls for power from BC Hydro. Bill 17 stands to worsen the situation, she said. “There’s no opportunity here now.”
The price of solar energy has dropped 90 per cent over the past decade. The B.C. NDP say importing energy from the U.S. could help save the province money, but groups like Clean Energy BC and many First Nations say that could hurt B.C.’s renewable energy producers. Photo: Science in HD / Unsplash
Wind and solar have also become less expensive and more efficient over the past 10 years, since BC Hydro issued its last call for power, Whyte said.
The average cost of solar has dropped 90 per cent to $32 per megawatt hour, while the cost of wind dropped 72 per cent to $28 per megawatt hour.
Whyte said B.C.’s terrain means those prices could be a bit higher, but they would still be far less than the cost of power from the Site C dam.
What if selling power to BC Hydro wasn’t the only game in town?
BC Hydro’s control over most of the province’s power lines leaves small scale energy projects and First Nations beholden to the publicly owned utility and whims of the political party of the day, according to Chief Patrick Mitchell of Kanaka Bar First Nation. “Politicians come and go but their decisions affect us.”
Some initial conversations around challenging that monopoly are underway.
This spring, a B.C. Utilities Commission inquiry looked into creating an Indigenous energy utility. The commission called on the province to reassess BC Hydro’s prohibition of retail access to its grid infrastructure for First Nations, and suggested that First Nations should be able to operate their own energy utilities.
The commission recommended that Indigenous utilities could serve customers on-reserve, but First Nations participating in the inquiry want broader access to the B.C. power market.
“I think there are lots of ways an Indigenous utility could play out,” Olsen said. “There are some models out there, and they’ve been presented to us and we should be exploring them.”
Running alongside conversations about Indigenous utilities lies another question: should BC Hydro control B.C.’s transmission lines at all?
Finn doesn’t think so.
The constraints BC Hydro places on small-scale energy in B.C. “has to stop,” Finn said. “I think the only way of doing it is removing the transmission network from the jurisdiction of BC Hydro.”
Decentralized energy systems exist all over the world, Finn pointed out. “There are models around the world that actually function quite well.”
For example, Alberta’s transmission lines are operated by an independent power broker that allows energy producers to sell their power to the grid at a competitive price.
For Sayers, eliminating BC Hydro’s monopoly on the power grid could lead to a more decentralized energy system that draws on different types of energy, something that Sayers says makes sense in the face of the climate crisis and increasing wildfires. “I think we won’t want a centralized grid that is prone to collapse.”
What happens next?
Bill 17 is waiting for its second reading in the legislature. If the NDP can’t get a commitment from the Greens or Liberals to support the bill, it will likely die on the order paper.
Author Zoë Yunker is an intern at The Narwhal and a master's of journalism student at the University of British Columbia