BC Utilities Commission

A strong voice for sustainability in the regulatory arena

By Tom Hackney, 12 September 2012

The government makes energy policy; the BC Utilities Commission implements policy by reviewing and approving (or rejecting) the energy plans of BC Hydro and other utilities.

In taking part in Utilities Commission proceedings, BCSEA faces powerful groups from industry, business and other interests. We make sure that sustainable energy principles and practices are fully included in utilities’ plans, and laws and regulations that support sustainable energy are implemented. We sometimes team up with like-minded groups to create a stronger voice for sustainability.

The Government of British Columbia has enacted significant sustainable energy policies through such documents as the BC Energy Plan (2007), the Clean Energy Act (2010) and the Demand-Side Measures Regulation (2008, updated 2011). These provide powerful tools to advocate for sustainable energy, including policies that prioritize energy conservation, policies that favour the development of greenhouse gas free renewable energy, and policies to reduce greenhouse gas emissions.

BCSEA represents the public interest and the interests of our members as ratepayers of BC Hydro and Fortis; and our members want their gas and electricity to be as sustainable as possible!

On March 18, 2013, I explained BCSEA's role at the BCUC to the Victoria Chapter. See the presentation slides. 

BCSEA’s current and recent BCUC work:

BC Hydro:

Integrated Resource Plan (IRP):

The IRP is BC Hydro’s main plan for meeting electricity demand for the next twenty years. In May 2012, BC Hydro published its draft IRP (http://www.bchydro.com/energy_in_bc/irp.html) and sought public comment.

In August, BCSEA commented on the draft IRP. These are the most critical points:

• BC Hydro’s energy conservation plans will fail to meet the energy conservation goals mandated by government in the Clean Energy Act. This is unacceptable.
• BC Hydro should invest much more in energy conservation and plan for much higher savings. If it does so, it can avoid the need for gas-fired power and can delay or avoid the Site C dam.
• BC Hydro has a critical role to play in reducing BC’s greenhouse gas emissions. Hydro should treat the Clean Energy Act’s 93% “clean or renewable standard” as an absolute minimum. Hydro should avoid using gas-fired generation.
• BC Hydro should reassess the cost of renewable energy – especially wind power – based on the most recent data, and should factor this into its portfolio analysis.

Hydro will file its submit the finalized IRP to cabinet in December. The expected general election in May 2013 may well affect when or even whether government reviews and approves the IRP.

Revenue Requirements Application [electricity rate increase]:

In its recent Revenue Requirements Application for fiscal 2012 to 2014, BC Hydro initially applied for a rate increase of some 32% over three years, a necessary increase to cover the costs of fixing aging infrastructure, extending service to new customers and paying for new energy supply contracts.

The Government of BC intervened and mandated the Review of BC Hydro, completed in June of 2011. Government used this to strong-arm Hydro to cut the rate increase in half. BCSEA argued that Hydro’s rates should not be artificially reduced, as this would hurt future generations.

In May 2012, the government shut down the RRA review, ordering the BC Utilities Commission to enact the rate increase that government had originally ordered.

Demand-Side Measures [energy conservation] Expenditure Schedule:

Along with its Revenue Requirements Application (see above), BC Hydro filed its plan for energy conservation and efficiency in the form of an Expenditure Schedule for Demand-Side Measures for the two fiscal years 2012 and 2013. This builds on Hydro’s previous energy conservation plan, filed in 2008, and is meant to be an ambitious increase in Hydro’s conservation programs.

BCSEA filed expert evidence by the Green Energy Economics Group, showing that Hydro should roughly double the savings it planned to achieve.

In May 2012, the BC government shut this proceeding down, along with BC Hydro’s Revenue Requirements Application (see above). This prevented BCSEA from arguing its case in an oral hearing before the Utilities Commission.

Dawson Creek – Chetwynd Area Transmission Project:

In July 2011, BC Hydro filed for approval to reinforce the transmission lines around Dawson Creek and the Chetwynd area, largely due to shale gas production in the Montney Basin around Dawson Creek. Gas producers require large amounts of energy to compress gas during production and transportation.

Electricity-driven compression is preferred over gas-driven compression, and electricity is made cheaper by BC Hydro’s rates, which average the cost of cheap ‘Heritage’ electricity enjoyed by existing customers with the cost of new generation made necessary by new customers. This would effectively subsidize increased production of a fossil fuel that will cause increased global warming.

BCSEA filed its final submission, opposing the project.

John Hart Generating Station Replacement Project:

BC Hydro applied in May 2012 for approval to upgrade the aging and seismically unsound penstocks and generating equipment for the John Hart dam near Campbell River (the dam itself is not being refurbished). BCSEA supports the appropriate maintenance of BC Hydro’s generation infrastructure, subject to environmental issues such as protection of the Campbell River fisheries, and other due diligence matters like cost control. A date has not yet been set for a hearing or final submissions.

Net metering re-pricing application:

In September 2011, BC Hydro applied to amend the terms of the existing Net Metering Service tariff (RS 1289). The tariff has been in place since 2005, allowing BC Hydro customers who make special application to supply power into the grid and get paid for their net contribution.

The re-pricing application would bring the rate BC Hydro pays into line with the rate paid under the Standing Offer Program for small renewable energy suppliers. This rate is an adjusted proxy for BC Hydro’s long-run marginal cost of power.

BCSEA supported the increased rate and also called for BC Hydro to be more proactive in advertising the net metering rate and supporting customers to take advantage of it. BCSEA also supported having BC Hydro address the call from some power producers to allow larger projects to come under the net metering tariff, rather than under the more onerous Standing Offer Program tariff. BC Hydro has scheduled discussions with interested parties for the fall of 2012.

FortisBC Energy Utilities (gas):

Revenue Requirements and Natural Gas Rates Application:

In May 2011, Fortis applied for approval of increased rates to serve customers for 2012 to 2014, including a schedule of expenditures for an expanded energy conservation plan costing $75 million. BCSEA filed expert evidence and brought expert testimony to the hearing to support Fortis’s initiative and encourage them to pursue even more ambitious conservation goals.

Energy Efficiency and Conservation stakeholder group:

Fortis holds regular meetings of interested parties to advise on its energy efficiency and conservation programs, and the expenditure plans that will be submitted for approval by the Utilities Commission. BCSEA attends as an advocate in the public interest and on behalf of its members who want the energy they consume to be as sustainably produced as possible. BCSEA advocates for the most ambitious achievable energy conservation programs, subject to cost-effectiveness.

Resource Planning Advisory Group:

Fortis holds regular meetings of interested parties to advise on its high-level long-term planning, including consideration of possible large changes in the demand for and availability of natural gas, possible changes in restrictions on greenhouse gas emissions and the like. BCSEA attends as an advocate of the public interest and the interests of its members who want the energy they consume to be as sustainably produced as possible. BCSEA advocates planning that fully reflects the climate change implications of fossil fuel use and the benefits of planning for a broad change to zero-emission energy sources.

BC Utilities Commission’s Inquiry into FortisBC Energy Inc. regarding Alternative Energy Solutions and Other New Initiatives:

In May 2011, the Utilities Commission started an inquiry into Fortis’s offerings of innovative energy services, including thermal energy services for buildings, natural gas fuelling services for commercial vehicles and bioenergy (methane generation from biological sources). The inquiry was triggered by a complaint from private enterprise interests claiming that Fortis, as a regulated entity, enjoyed an unfair competitive advantage.

BCSEA filed a submission, saying that alternative energy services should be encouraged because they reduce greenhouse gas emissions and often lead to increased efficiency in the use of energy. BCSEA is neutral on whether alternative energy services should be provided through a regulated or unregulated form of service. The Utilities Commission has not yet issued its decision.

FortisBC (gas)/FortisBC Alternative Energy Services: Thermal Energy Services:

Delta School District 37 Thermal Energy Services:

In November 2011, Fortis applied for approval of a contract with Delta School District 37, whereby Fortis would provide “thermal energy services” to 19 schools under a regulated rate structure. Fortis would renovate the energy systems of these schools, upgrading to ground-source loops and heat pumps, with high-efficiency gas boilers for back-up and peak power. BCSEA supported the application because it would significantly reduce greenhouse gas emissions and increase the efficiency of energy use.

PCI Marine Gateway Project Thermal Energy Services:

In May 2012, FortisBC Alternative Energy Services Inc. applied to provide thermal energy services to a new mixed use development (condominiums, office, cinema and commercial retail), including ground source heat loops and heat pumps, backed up by high-efficiency gas boilers to meet peak demand. Planned under the City of Vancouver’s new bylaw, this development is expected to reduce the greenhouse gas emissions by 50% relative to a business-as-usual scenario of gas boilers and electric baseboard heaters.

BCSEA supported the application because it would reduce greenhouse gas emissions and increase the efficiency of energy use.

Kelowna District Energy Service:

In August, FortisBC Alternative Energy Services Inc. applied for permission to construct and operate a thermal energy service in downtown Kelowna. The project would be a high-temperature loop using waste heat from the nearby Tolko sawmill, backed up by high-efficiency natural gas boilers. BCSEA is intervening to assess whether the design is the optimum for reducing greenhouse gas emissions and whether it would maximize energy efficiency and conservation. The proceeding is expected to take place in the fall of 2012.

FortisBC (gas) Natural Gas Vehicles:

BFI Compressed Natural Gas Fuelling Station:

In February 2012, Fortis applied for approval to build a compressed natural gas fuelling station for BFI Canada Inc.. The City of Surrey contracted BFI to provide waste collection services using natural gas vehicles, as part of the city’s greenhouse gas reduction strategy. BFI would buy 52 natural gas powered waste haulers. Fortis calculates that 419 tonnes per year of carbon dioxide (equivalent) would be avoided by the switch from diesel-powered vehicles to natural gas.

BCSEA supported the proposal, based on the net reductions in GHG emissions and the reduced pollution from natural gas. In general, BCSEA supports natural gas conversion for commercial vehicle fleets, where there are reductions in GHG emissions, but BCSEA does not support using natural gas for passenger vehicles. These should be electrified, achieving a much larger reduction in GHG emissions.

Vedder Trucking Temporary Service Agreement for Liquefied Natural Gas:

In July 2011, Fortis applied for approval for a temporary service agreement to supply liquid natural gas to Vedder Trucking, a short-haul trucking service in Vancouver which has purchased 50 natural gas fuelled tractors. Fortis claims the service would reduce GHG emissions by 3,800 tonnes of carbon dioxide (equivalent) per year, relative to business as usual. BCSEA supported the application, noting that while it supports the use of natural gas for commercial vehicles, it opposes this for passenger vehicles. These should be electrified.

Greenhouse Gas Reduction Regulation (“GGRR”) Application:

In August 2012, FortisBC Energy Inc. applied for approval of general terms and conditions to be used generally for future applications to provide natural gas fuelling stations and services. This follows from the passing by government in May of a new regulation (the “Greenhouse Gas Reduction (Clean Energy) Regulation”) under the Clean Energy Act, which is designed to support fuel switching from diesel to natural gas.

Government has clearly expressed its desire to support Fortis’s natural gas vehicle program, and Fortis seeks a general rate structure that will allow it to pursue further projects without extensive regulatory proceedings. BCSEA is intervening to ensure that the proposed terms would continue to support greenhouse gas reductions and that they would generally make sense and be fair to ratepayers.

FortisBC (electric):

Revenue Requirements Application and Review of 2012 Integrated System Plan:

In June 2011, Fortis’s electric utility (serving south-central BC) applied for increased rates for 2012 and 2013 and for approval of its long-term Integrated System Plan, including an expenditure schedule for energy efficiency and conservation.

BCSEA filed evidence and provided an expert witness to support Fortis’s energy conservation plans and encourage them to be more aggressive in their spending and planned savings on energy conservation. BCSEA also filed a comparison of energy conservation savings in other jurisdictions and a regression analysis, correlating conservation savings by North American jurisdictions with expenditures on conservation programs.

Surprisingly, Fortis and more than one interest group argued for less ambitious conservation goals and spending. In August, the Commission issued its decision. Unfortunately, it did not support BCSEA’s position on energy conservation; however, the Commission also did not cut Fortis’s conservation budget, as it cut other expenditures by Fortis.

Advanced Metering Infrastructure Project:

In July 2012, FortisBC applied for permission to install advanced (also known as “smart”) electricity meters on its system, to replace the regular analogue meters currently in place. BCSEA has intervened. BCSEA has not taken a position for or against the meters, and we will look forward to verifying whether they make sense.

BCSEA also wants to ensure that the review process is sufficiently broad and transparent that public concerns raised about electromagnetic ration from the meters will be adequately addressed. BCSEA notes that the installation of smart meters on BC Hydro’s system without a Utilities Commission review or other public process has resulted in strong public opposition to the meters and negative publicity.

River District Energy District Energy Utility Application:

In July 2011, River District Energy, an affiliate of Park Lane Ventures LP, applied for approval for a district energy system that would supply space and water heating to a mixed use development of 710,000 square metres of residential, retail, office and community uses.

The district energy system would eventually receive heat from Metro Vancouver’s Waste to Energy Facility in Burnaby and would reduce annual greenhouse gas emissions by 8,200 tonnes of carbon dioxide equivalent, but would initially be powered with high-efficiency gas boilers. The City of Vancouver has been encouraging this and other energy initiatives as part of its policy mandate to reduce GHG emissions and promote efficiency and the use of renewable energy.

BCSEA supported the application, based on the expected GHG emission reductions and improved energy efficiencies.

Updated by Tom Hackney, 12 September 2012.

BCSEA’s previous BCUC work:

[link to BCSEA Policy Archive page]