In recent weeks, there has been much discussion in The Golden Star about the numerous privately-owned hydroelectric facilities being approved for development on many of B.C.’s waterways.
Generally referred to as ‘run of river’ hydroelectric projects, these independent power projects (IPPs) usually involve the diversion of a waterway into a pipe that leads to a powerhouse with a turbine that generates electricity.
The provincial government says these projects are a form of ‘green energy’ that is necessary to meet an energy gap. But opponents question why these projects are being given to private companies seeking profit, and why this move has been made without public consultation.
There are two such projects currently going ahead on the Blaeberry River and Cedar Creek, and an application is in place for a water license on the Kicking Horse River.
The Kicking Horse River application was made in 2002 by a company called Terreton Hydro Corporation.
According to the Ministry of Environment Water Stewardship Division, the license has been in the application process since it was submitted, and the company has not provided any development plans.
The Golden Star could only find a Calgary mailing address for Terreton Hydro Corp., which was on their water license application, and there was no information available about the company or the project online.
The Golden Star has learned that Terreton is an independent company created by Sunrise Energy Limited, a privately-owned oil and gas exploration company based in Calgary.
Sunrise Energy Limited vice president and chief financial officer, Joel Johnson says the project planned for the Kicking Horse would be roughly located between the new Park Bridge, and the Yoho Bridge, east of Golden.
“We’ll probably start just south of the new bridge, and end at the five mile bridge,” Johnson says.
The water from the river will be collected in a miniature dam known as a weir, and run through a large pipe into a power plant located under the Yoho Bridge (five mile), Johnson explains. He notes the facility will produce about 12 megawatts (MW) of electricity.
Johnson says a project in that area of the canyon would have less environmental impact because of previous disturbances there, and also the greatest capacity to produce electricity.
“As you know, that area is just finished with the Trans-Canada Highway expansion,” he says. “The train has gone through. I don’t think there’s anything you could do there that would have any impact on the environment in the area. It’s been ripped up for a long time.”
He also says the location was chosen to minimize the impact on local river rafting companies and kayakers.
“Why we like that location is that it’s too rugged - right underneath the bridge where rafters have to take out. That was one of the location choices criteria, to not have it interfere with the rafting business. So it’s very wild and it’s a steep drop underneath there. It is, in fact, I think too wild for kayakers, too.”
Johnson also notes the project would use the existing power lines which carry electricity from Golden to Field to hook up their project to the main power system.
“We would just have to build a connection office out there,” he says.
The Golden Star requested more details, such as the amount of water that would be diverted from the river from the company, but none were forthcoming.
Johnson says when Sunrise Energy made their application for a water license on the Kicking Horse in 2002, it was initially turned down by BC Hydro as a source of ‘green energy’ to purchase, and has been in the application phase since that time.
“At that point we were waiting for business terms and conditions to improve,” he notes.
But since then, Johnson says things have changed, and BC Hydro has issued an open call for private power contracts, and they’ve increased the price they’ll pay for electricity.
“So now we’re reviewing our economics and reviewing the proposal to determine if it’s viable again.” viable again.”
According to BC Hydro’s website, when the company put out its first call for ‘green power’ in 2002/03, 30 applications were approved through the evaluation process.
Last year, BC Hydro put out an open call for proposals from private power producers for ‘clean power’, with the goal of buying 5,000 gigawatt hours (GWh) of energy from IPPs producing power from hydroelectric, solar, wind, and other carbon-neutral sources of energy.
IPP Watch (www.ippwatch.info), a volunteer organization that tracks IPPs in B.C., shows there are currently 128 approved licenses for hydroelectric facilities on 115 waterways, and 435 license applications on 466 waterways around the province.
Minister of Energy, Mines and Petroleum Resources, Richard Neufeld notes BC Hydro called for a total of 30,000 GWh in their Integrated Electricity Plan.
“When we put out the energy plan in 2007, we said to (BC Hydro), ‘you get half of that from conservation,’” Neufeld says. “The rest of it comes from the private sector, and internally from BC Hydro.”
Neufeld says the province needs this new energy because at current levels of generation, B.C. won’t have enough electricity to meet its energy needs in the future.
“The reason we’re out looking for electricity is because, for a decade, nothing was really built in any amount, and we continue to use more (electricity),” he says. “In fact, during the 1990s, the amount of generation built only covered 11 per cent of the load growth.
“We’re net importers (of electricity). We’ve been net importers . . . probably six or seven out of the past 10 years. That means we don’t generate enough electricity in the province of B.C. with our own systems to keep our lights on . . . We were a net exporter for many years, and now we’re a net importer. And that’s because there has not been any new generation to speak of built for many years.”
Neufeld notes that BC Hydro has been instructed to start generating more electricity by upgrading their existing facilities, and the rest of this gap will be filled by independent power producers.
He says IPPs can build and run these facilities at less cost than BC Hydro.
“IPPs have been supplying energy to BC Hydro for quite a number of years,” Neufeld says. “And it’s because they’re usually smaller plants; they’re usually dispersed. They’re not what BC Hydro would usually own or operate because most of them are too small.
“Hydro is good at running and managing huge electrical systems and huge dams. They do it very well. But when it comes to building anywhere from 1 MW to 20 MW facilities, that’s not their forte. You can get a better deal from IPPs.”
Columbia River - Revelstoke MLA, Norm Macdonald has taken on the issue of IPPs in the province.
Macdonald contests the provincial government’s claim that the province needs all this new energy, and their stance that it should be produced by privately-owned power companies.
He says the talk of an “energy crisis” by the government is misinformation deliberately put out to justify privately-owned power.
“They talk about importing energy from jurisdictions such as Alberta, but BC Hydro does that for economic reasons,” Macdonald says. “They don’t have to get power from Alberta. But in Alberta, they’re dependent on thermal electric plants, and they can’t reduce or increase what they produce in a short time. In the middle of the night they don’t need it, so they just sell it off. In B.C., we buy it from them at a low cost.”
He adds that since BC Hydro can control its electricity production by releasing water from the province’s huge reservoirs at will, the province sells electricity to Alberta and the United States when it has the most value.
“And even if there was a need for more electricity, why not do it with BC Hydro,” Macdonald asks. “Why not do it ourselves like we have always done.”
He also says the claim that private interests can produce power for less is false.
“Nobody can borrow money cheaper than government,” he explains. “And all government does when it makes these projects is hire companies to build them. But the government owns the facilities they build. We have, with BC Hydro, the cheapest electricity of pretty well any jursidiction in North America.”
According to BC Hydro’s Integrated Energy Plan, electricity produced from small, ‘run of river’ IPPS will cost between $65 and $95 per MWh. This energy is deemed to be somewhat unreliable by the plan because it’s dependent on the amount of water flowing through the creek at any given time of the year. Energy from the large, publicly-owned hydroelectric facilities costs $43-$62 per MWh, and is reliable because it’s generated with water collected in huge reservoirs.
Neufeld says no matter who undertakes these projects, the cost of the electricity is bound to increase.
He notes that since large dams, such as the ones on the Columbia River system, were built in the 1960s, the electricity generated from them costs less because the facilities are long paid for.
“There’s only so much generation you can do out of those cheap assets,” Neufeld says. “The fallacy is that if (BC Hydro) goes out and builds something today, it’s going to cost the same amount of money as what it would for the IPPs.”
Macdonald calls it a complete giveaway of public resources.
He says, while BC Hydro may have been instructed to generate more electricity from their current facilities, the Provincial Energy Plan set out by the government in 2002 stated that BC Hydro was no longer allowed to build new power projects. He says 200 to 300 sites had previously been identified by the Crown corporation for development of small hydro projects, and these are now being handed over to private interests.
When private companies apply for water licenses on the province’s rivers, they have to pay $5,000 to $10,000 for their license. After a company gets a water license, they can get a contract from BC Hydro which guarantees BC Hydro will purchase energy from them at a rate set out by the Crown corporation.
These contracts last from 10 to 40 years, and at the end of the contract, the private company owns the generating facility, and can re-negotiate with BC Hydro.
Neufeld says these contracts provide a reliable source of energy for the province for their duration.
“The old saying is that when all those contracts come due, (the companies) will be able to hold everybody up,” he says. “But they all come due at different times.
“And to be honest, someone who’s generating 10 MW on a river does not have the sophistication or the ability to say, ‘Hey, I’ve got 10 MW, can I sell it to you?’”
But Macdonald says perhaps the most important part of this issue is that the government went ahead with this plan without proper legislative debate.
“That’s what raises alarm bells because none of it seems like it was done in an up-front way,” he says. “When I think back, I’m sure there were public hearings and things like ads in the paper (about the two local projects going ahead). But there hasn’t been a full debate on the public policy like there should have been.”
He notes the provincial government signed a memorandum with the Union of B.C. Municipalities, saying they wouldn’t make any unilateral decisions about IPPs without local municipalities agreeing.
But in 2006, the government passed Bill 30, a Miscellaneous Statutes Amendment Act that made minor alterations to various laws in the province, including the law that took the final say about IPP zoning away from regional government, and gave it to the provincial government.
This change was made around the time the provincial government was trying to push through an IPP on the Ashlu River in the Squamish-Lilloet Regional District, which residents and the regional district had refused to allow.
Neufeld says this law simply put these projects on the same level as any other industry development in the province.
“All Bill 30 did was treat the electrical industry no different than we treat the mining industry,” he says. “The communities have input into it. They don’t have the final authority if it was BC Hydro doing it, even before Bill 30.”
Aside from the potential for having rights to rivers taken away, and power interests controlled by for-profit ventures, the proliferation of these private projects across the province without the approval of the general public is one of the main things that has many people around B.C. up in arms.
This issue was raised in Golden for the first time by the local Council of Canadians Chapter, which held an event to create awareness about national energy security on Feb. 2.
The Council of Canadians is a national, non-partisan citizen’s advocacy group with chapters across the country.
Historically, energy in B.C. has been a public resource, and the Council of Canadians says it is being taken away without consent.
“This is a move on the provincial government’s part - a decision that’s been made without public consultation - that’s locked us into an agreement that we (the public) haven’t agreed to,” says Council spokesperson, Laura Shaw. “I think the stakeholder engagement process is so inadequate. Stakeholders haven’t had a say in this move toward privatization. Suddenly we have a public company purchasing private energy.”
A major goal of the council is to bring issues such as this to people’s attention. And few in Golden were aware of the pending water license on the Kicking Horse River before the group held their day of action last month.
The council also refreshed memories about the two projects slated to go ahead on Cedar Creek and the Blaeberry River in the next three years.
A public consultation was held in Golden about these two projects in 2006. But in the second part of our coverage on IPPs, The Golden Star will re-examine these two local projects, and look at how they fit into the larger picture of independent power production in British Columbia.