Why a rushed BCUC review of Site C will be bad for our pocketbooks and our fight against climate change

July 18th marks a big changeover in BC. Sixteen years of Liberal rule comes to an end and a new NDP government (supported in the Legislature by the Greens) comes to power. One of the commitments our new NDP Premier has made was to submit the Site C Dam project to an accelerated review with the BC Utilities Commission (BCUC). It is my opinion that an expedited review of the Site C project will be bad for our pocketbooks while also having the potential to set back our fight against climate change.

Prior to the Site C Dam being approved it went through an independent environmental assessment by the federal and provincial governments. This Joint Review Panel spent two years looking at the project that included public hearings and the production and review of hundreds of reports. The output from this assessment was a 29,000 page Site C Environmental Impact Statement and an environmental approval certificate that included 77 separate conditions. Now one thing was missing in this review process: the Site C dam was never submitted to the BCUC for its review.

This was a conscious effort at the time. The government passed the “Clean Energy Act” that specifically exempted the project from BCUC review. Why? Well the BCUC is tasked with regulating B.C.’s energy utilities and is responsible for getting the best value for money for BC consumers. The problem is that the fight against climate change isn’t about getting the lowest energy prices for BC consumers, it is about reducing our carbon footprint. A BCUC review based on cost would look at the cost of Site C and look at the cost of a natural gas generation plant and go with the latter.

I can’t count the number of people who have told me that instead of building Site C BC Hydro should just re-open Burrard Thermal. Well re-opening Burrard Thermal certainly makes financial sense but it does not make climate sense. In a province that has the alternative of low-carbon hydro-electric power to turn around and generate electricity using natural gas represents climate negligence. That being said, exporting liquid natural gas (LNG) to countries that would otherwise use coal, makes sense from a global climate perspective.

So, if you are someone who doesn’t believe that climate change is an issue then you might have a legitimate case against Site C, but if you also claim to be concerned about climate change, demanding that we get the lowest cost energy possible only sets back the cause. Rising electricity prices represents a feature of the process not a bug.

I am frequently asked what will happen if Site C is submitted to the BCUC on an expedited review? Well the first thing is that they will not have time to get new data. It took the Joint Review Panel two years to assemble their report. The BCUC can’t repeat this process in 90 days.  Instead they will be relying on the data that was generated for the Joint Review Panel in 2012-2013. I don’t have to remind readers that a little something happened between then and now, notably the Paris Climate Agreement. Paris will have an incredibly important effect on our energy needs. It is going to reduce the options for future developments while increasing our demand for low carbon energy.

As for the availability of imports. Well in a post-Paris world the people we currently import electricity from will no longer have excess power to export. Rather the market is going to be turned on its head with Alberta and Washington going from exporters of electricity to importers and more importantly California, the 800 pound gorilla in the room, needing to fill a huge hole made by its closing of Diablo Canyon which supplies 9% of California’s electricity. This which will only drive up the price of electricity.

As for the individuals who claim that conservation will help us achieve our goals. Well efficiency and conservation cannot replace the electricity supplied by the Site C dam.  We have spent the last 25 years improving our efficiency and the results have been great. The problem is most of the major efficiencies that can be made, have been made. There are no more easy tricks to reduce electricity demand. Moreover it has been projected that the population of BC will increase by 1 million people in the next 20 years.  That increased demand cannot be addressed by conservation and efficiency gains.

An expedited BCUC review is like a family upon hearing they are pregnant planning to buy a new car only to discover half-way through the process that they aren’t going to have one child but instead are going to have triplets. That sleek looking sedan they were looking at with space for just one car seat in the back is no longer going to meet their needs. The data collected for the Joint Review Panel is not going to meet the BCUC’s information needs in a world that has changed so much with the signing of the Paris Agreement. Any legitimate review has to include consideration of our energy needs in a post-Paris future and needs to accept that some energy alternatives (coal and natural gas) are off the table. An expedited BCUC review will do neither. It won’t have the time to conduct the assessment necessary to address our energy needs under the Paris Agreement and, by regulation, it will be required to consider price to consumers and not greenhouse gas emissions. Talk about a guarantee that clean, low-GHG alternatives like Site C will be ruled out.

Any expedited  BCUC review that does not include considerations of our climate change commitments under the Paris-Agreement and the changes the Paris Agreement has made in the energy map of Western North America will almost certainly result in a decision that is bad both for our collective pocketbooks and for the international efforts to fight climate change.

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4 Responses to Why a rushed BCUC review of Site C will be bad for our pocketbooks and our fight against climate change

  1. chrism56 says:

    One of the biggest problems with financial analyses of power projects, like what the BCUC will do, is they use inappropriate discount rates for the assets. A hydro is basically there permanently. Running costs are very low. Even a total rebuild every 50 years is not much when spread over operating life. The stations can take a decade to build with a lot of capital expenditure up front.
    In contrast, GTs have a very finite life, maybe 100k hours at best. then they have to be replaced. However, they can be bought off the shelf and be up and running within 18 months. With the high discount rate that is invariably used, GTs will always come out ahead.
    Until they use appropriate financial models, analysis will always be skewed.
    The other issue that Australia is find is the lack of on-site storage. GTs rely on line packing as they need a high pressure gas supply, typically 40bar. If there is high demand on the gas, the pressure drops and can force the plants off.

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  2. Martin Kral says:

    I have been reading a number of article about adaptation to climate change given that it is already happening. We may be able to slow it’s progress but I truly do not believe we are able to control it with little changes like one dam here or a wind farm there. I think the adaptation has to be evolutionary.

    What if we are looking at the wrong solutions? What if the solution is not in how we use energy but in how we use water? What if we adapt crops to saline farming to feed the world and coastal flood plains were transformed into valuable farmland?

    This solution may not be possible in landlocked BC, but it could reduce the energy needed by the world population and the cascading effect would be the reduction in other natural resources like deforestation for new farm lands and scarce fresh water for farming just to name a two. CO2 is a valuable combination of elements that sustain life. If there is an increase, crops will flourish and that of course is a good thing. Salt-water farming would open up many new locations for food production and we would not need excessive energy to desalinate ocean water for crop farming.

    Any thoughts from you?

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