Bill 17, Clean Energy Amendment Act – What does it mean?
July 27, 2020
On June 23, 2020, Energy Minister Bruce Ralston introduced Bill 17, the Clean Energy Amendment Act, 2020. Bill 17 does three main things.
First, it abolishes the “self-sufficiency” planning requirement that BC Hydro’s new generation resources must be located within BC. This will have no practical impact for 10 or 15 years or more until BC Hydro has a shortfall of electricity supply compared to forecasted load (after conservation and efficiency measures). Until then, BC Hydro has surplus energy for planning purposes and it has no “planning need” for new generation resources. To be clear, “self-sufficiency” is a long-term planning concept. It doesn’t affect BC Hydro’s operational decisions, such as whether to buy or sell power to meet load and reduce costs, or Powerex’s ongoing trading in the regional electricity market.
Why eliminate the new-generation-must-be-in-BC requirement now? The Government hasn’t said. Would-be sellers of power to BC Hydro are naturally offended at being told they will have to compete with foreign suppliers of when BC Hydro eventually requires new electricity supplies especially since much of the US renewable energy generation is government-subsidized. However, this will be a ‘tempest in a teapot’ until growing domestic load, including low-carbon electrification, sops up BC Hydro’s planning surplus.
It’s possible that eliminating the buy-BC requirement could be part of the Government’s agenda to sell more clean BC Hydro power to nearby jurisdictions that currently protect their own clean generators from outside competition. This relates to the next component of Bill 17.
Second, Bill 17 allows the Government to establish by regulation some sort of new clean electricity regime that the Government says will allow BC to increase its trade-in clean electricity with Alberta and US states. What this is all about is obscure, frankly. Minister Ralston told the Legislature that Bill 17 would enable the implementation of a 100% clean energy standard for BC. But BC Hydro already has a surplus of 98% clean, renewable, made-in-BC generation. The Minister said California and Washington have passed legislation “based on this approach.” But the Washington State legislation, for example, doesn’t require 100% clean electricity until 2045. BC is way ahead of that schedule. In the interests of transparency, the Government should explain what it has in mind.
The third aspect of Bill 17 is basically housekeeping. The amendment allows BC Hydro to sell portions of the Burrard site formerly used for the Burrard Thermal Generation Facility and now used for transmission support services. The Government says that approximately 120 acres of the 180-acre site is currently underutilized or vacant following decommissioning of the old natural gas generation plant. Without the amendment, BC Hydro would be barred from selling the land because it is designated a “Heritage Asset.”
Bill 17’s immediate impact is modest. Allowing BC Hydro to sell portions of the Burrard site is the only aspect of Bill 17 that affects the real world right away. Dropping the self-sufficiency planning requirement won’t have any impact until the future year when BC Hydro has a planning need for new power. Authorizing the government to create regulations for “clean energy standards” doesn’t require the Government to do so, and it doesn’t define what the new framework would look like.
Q: Does Bill 17 affect BC Hydro’s (or Powerex’s) purchase of carbon-intensive power from Alberta or US states in off-peak periods?
A: No, re self-sufficiency. Maybe, re-clean energy regulations.
BC Hydro’s subsidiary Powerex buys and sells power on a daily basis to make trade income that financially benefits BC Hydro ratepayers. Most of Powerex’s trades are for generic electricity; some trades are for electricity with “environmental attributes” like “clean” or “renewable” as defined differently by different jurisdictions. In any event, Powerex’s trade activities are entirely outside of both BC Hydro’s operational load-serving function and its long-term planning requirements. Powerex’s role would not be affected by Bill 17’s elimination of the self-sufficiency planning requirement.
Could clean energy regulations affect Powerex’s electricity trading? Maybe. But it’s impossible to know what the impact would be without knowing what clean electricity trading regime the Government intends to pursue.
Q: Does Bill 17 allow the Government to brand ‘any old power’ as “clean”?
A: Yes, but the Government already has – and uses – the authority to define “clean or renewable” resources. See the Clean or Renewable Resource Regulation (link below).
Q: Does Bill 17 mean the government can buy power from other jurisdictions and not have to buy power from First Nations independent power producers?
A: Yes, no, but, and also.
Yes, Bill 17 means that if and when (at some year in the future) BC Hydro requires additional clean electricity to be able to say that over the next 20 years it will have enough power to meet forecasted load (after conservation and efficiency) BC Hydro will be allowed to buy clean power generated outside of BC to meet this planning requirement.
No, Bill 17 does not prohibit BC Hydro from buying made-in-BC clean power to meet its planning requirements, whether from First Nation IPPs or other IPPs.
But, allowing an out-of-province clean generation to compete with BC clean generation will certainly put downward pressure on the prices the sellers can expect to get from BC Hydro. Indeed, that is the Government’s stated rationale.
Also, it should be understood that BC Hydro’s purchase of long-term clean power to meet its planning requirements is completely different than the short-term buying and selling of power by BC Hydro and Powerex (both owned by the BC government). They buy and sell power for two basic purposes: to cost-effectively meet fluctuating customer load, and to make a profit to reduce BC Hydro customers’ rates. This is not affected by Bill 17.
Q: Does Bill 17 support the Government’s CleanBC plan, as Minister Ralston told the Legislature?
A: Maybe, but the Government hasn’t said how. Bill 17 itself says nothing about low-carbon electrification, which is the central component of BC Hydro’s contribution reducing BC GHG emissions under the CleanBC plan.
Q: Is Bill 17 a mechanism to impose clean electricity requirements on the FortisBC electricity utility in south-central BC?
A: Could be. Bill 17 introduces a new concept of “regulated person” that must comply with the unspecified future clean electricity standards. A regulated person is defined to include BC Hydro plus, by regulation, other public utilities (such as FBC?) or entities that deliver electricity to “grid-connected customers” (another new term). FBC’s supply-side resources are mostly ‘clean or renewable,’ but FBC also relies for planning purposes on a small amount of market power.
Bill 17, Clean Energy Amendment Act, 2020,
Minister Ralston introduces Bill 17, Hansard, June 23, 2020
Clean or Renewable Resource Regulation,