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Shore Power Electricity Rate a Modest Step Toward Cleaner Air

By Bill Andrews

Ships use diesel to generate electricity. When ships are in port, their diesel generators are a major source of air pollution, greenhouse gas emissions and noise. Why not use clean renewable electricity from the BC Hydro grid instead? Good idea: it's called "shore power." 

Shore power in B.C. has been stalled by electricity rate problems, but that's about to change. BC Hydro is preparing an application to the BC Utilities Commission for approval of a new electricity rate class for shore power, outlined at a workshop on January 28 in Vancouver. More shore power at Port Metro Vancouver, Prince Rupert Port Authority and other B.C. port terminals should be 'coming soon.'

Shore power is...

Shore power is grid electricity provided by a port terminal to a ship at berth to substitute for onboard diesel electric generation while the ship is in port. Shore power is cleaner (fewer GHG emissions and less air pollution) and quieter than onboard diesel generation.

Shore power needs...

Shore power is clearly desirable, but adoption is only beginning to take off now after a slow start. Four pieces need to come together for shore power to work:

  • electrical connections on individual ships;
  • wires, connections and meters at port terminals,
  • pricing mechanisms that meet the needs of the electric utility, the port terminal and the ships, and
  • motivation (financial, regulatory, public image) on the ships, the port terminals and the utility to set up shore power and then use it.

Shore power in B.C.

BC Hydro currently has a ‘one-off’ contract with Port Metro Vancouver (PMV) to provide electricity to the terminal at Canada Place for use by cruise ships. PMV and Prince Rupert Port Authority (PRPA) have asked BC Hydro to establish a shore power electricity rate, so they can expand their shore power services. PMV wants to make shore power available to container ships at its Vancouver and Delta facilities. Notably, PRPA already has shore power installed at its container terminal but hasn’t yet offered shore power service to ships because there’s no suitable electricity rate in place.

Shore power is a “non-firm” rate

From an electric utility rates perspective, designing a shore power rate will be ‘doable.’ But there is a challenge.

A normal large electrical customer is on a rate that has two charges: one for energy (in kWh) and one for “demand” (the maximum amount of power delivered at a single instant, in kW). This is a rate for “firm” power – BC Hydro must provide as much power as the customer demands at any given instant. By paying the demand charge, the customer compensates BC Hydro for the cost of maintaining enough electricity supply to meet peak loads.

However, a demand charge would be too expensive for ships using shore power, and too complicated for the port to try to divvy up between ships. Fortunately, ships don’t need firm power – they have onboard electrical generation they can use if power from BC Hydro isn’t available. So the shore power rate will be for “non-firm” power: interruptible power, but no demand charge. The charge for energy will be BC Hydro’s usual charge for electrical energy (in the roughly ten cents per kWh range that residential customers are familiar with).

Utilities Commission approval is required

Why can’t BC Hydro just publish a shore power rate and let the ports get on with it? Approval by the Utilities Commission is required so that the new rate is fair to both the customers paying the new rate (not too high) and to customers in different rate classes (not too low).

Given the environmental benefits of shore power, it would be tempting to argue that the shore power rate should be extra low in order to motivate adoption and use of shore power. But that would be a cross-subsidy by other ratepayers that the Commission is legally required to prevent.

When BC Hydro makes its application for approval of the shore power rate it will have to prove that the revenue it will get from the ports under the new rate will be about equal to the cost of the service. For example, BC Hydro will have to show it will be willing to say ‘no, we can’t and won’t provide power to this ship at this time.’ If shore power is not truly interruptible, then not having a demand charge in the shore power rate would be unfair to other customers who would bear the cost of BC Hydro maintaining capacity to meet the peak load.

Proposal would broaden the shore power rate in B.C.

BC Hydro’s proposed Shore Power Rate would be available to an expanded range of port customers, including port authorities, terminal operators, wharf operators and dock operators that provide service to “eligible vessels.” Eligible vessels would include cruise ships, container ships, freighters, tankers, bulk carriers, and passenger and vehicle ferries.

The drive to increase the availability and use of shore power in B.C. is supported by California regulations that effectively require ships to take shore power while berthed at California ports. This of course increases the number of ships with shore power capabilities calling at B.C. ports. In addition, Transport Canada has provided funding for shore power facilities.

Q & A

Here are some Q and As in response to, as Stuart McLean puts it, “my long suffering editor”:

Who cares?

Q: Why should people care?

A: The biggest immediate benefit of more use of shore power in B.C. port terminals is the reduction of conventional air pollution from ships at berth burning diesel to generate power. Ships in port are a significant contributor to urban air pollution in Vancouver, Delta and other B.C. port cities. More use of shore power may also help reduce noise problems where port facilities are in close proximity to residential and commercial areas. Also, shore power in B.C. reduces GHG emissions a bit, since electricity from the BC Hydro grid is mostly from clean or renewable sources and is less carbon-intensive than burning diesel. I say “a bit” because a ship that uses shore power in a B.C. port will still be burning diesel when it’s not in port.

How much energy?

Q: How much energy are we talking about here?

A: That was asked at the workshop, and BC Hydro said it would respond in the workshop notes. It was said at the workshop that a cruise ship might use, say, 1200 MWh per month (noting that the ship is not likely to be using shore power for a month at a time.) In terms of demand, these ship-borne diesel generating plants are quite large. A cruise ship may have a 12 MW plant (six 2-MW generators). A container ship might have a 3 MW plant that runs at 1 to 1.5 MW on average.

How much pollution abatement?

Q: How much pollution abatement are we talking about?

A: I don’t know. Clearly, port activities are a significant source of air pollution in B.C. ports, as in urban ports around the world. Both Port Metro Vancouver Prince Rupert Port Authority acknowledge a responsibility to reduce air impacts and GHG emissions from their operations. Increased use of shore power would be only one of many actions the ports need to take to reduce their environmental impact.

What about other ports?

Q: How does this BC Hydro Shore Power Rate compare with other ports?

A: Ports up and down the American and Canadian Pacific coasts have various different electricity rate structures for shore power, corresponding to whatever electric utility happens to provide service to the port. Almost all of them have a non-firm (interruptible) rate, and most do not have a demand charge. This makes BC Hydro’s proposal typical of the better-designed shore power rate structures in other ports.

Oh, oh. Is this an end-use rate?

Q: How will this BC Hydro Shore Power Rate be viewed in the regulatory world? Routine? Groundbreaking?

A: In the B.C. utility regulation world, a shore power rate is an example of what’s called an “end use rate.” Other examples are irrigation and street lighting. End use rates are frowned upon in principle. There’s a ‘floodgates’ fear. Every customer likes to think his, her or its own use of electricity is extraordinarily beneficial to society and should be encouraged with advantageous electricity rates. From the perspective of the utility and the regulator (BCUC), there would be no end to the line-up for special rates: hospitals, schools, outfits that would create or retain jobs, and so on. To digress, a special rate for charging electric vehicles is considered an end-use rate and therefore faces the general regulatory disapproval of end-use rates.

My sense is that for a new end-use rate (like the Shore Power Rate, or an EV rate for that matter) to be accepted, there has to be three things:

  • proof that an existing rate won’t work for the use in question,
  • proof that the proposed end-use rate won’t entail cross-subsidization from other customers, and
  • substantial pressure on political, financial and social levels.

Forget about Vancouver, what about Victoria?

Q: Will the proposed Shore Power Rate do anything for residents of Ogden Point (City of Victoria) unhappy with air pollution from cruise ships berthed at the deep water port facility there?

A: Yes, at least it will be a start. Having the proposed Shore Power Rate in place would solve the problem of how shore power would be paid for. The cruise ships themselves are increasingly outfitted for shore power. The two remaining pieces would be for the operator of the Ogden Point terminal to put the money into setting up shore power facilities (BC Hydro does not pay for that); and for the ships to actually use shore power once the system is all set up.

Thumbs up?

Q: What approach will BCSEA and SCBC take in the Utilities Commission proceeding regarding this shore power rate?

A: BCSEA and the Sierra Club BC normally intervene in BCUC proceedings that affect their members’ and supporters’ interests as ratepayers who want a sustainable energy system. Assuming the evidence BC Hydro files in support of the Shore Power Rate passes muster, BCSEA and SCBC would definitely support approval of the new rate by the Commission.

For a copy of the BC Hydro Shore Power Rate presentation, please contact me at wjandrews@shaw.ca.

 

Bill Andrews is a lawyer who represents the BC Sustainable Energy Association and Sierra Club BC in BC Utilities Commission proceedings.