FORT ST. JOHN, B.C. – It could be some time before a joint review panel considering the proposed Site C Dam in northeastern B.C., makes a decision about sending the project to a public hearing.
The panel is now seeking even more information from B.C. Hydro about the estimated $7.9-billion dam, which would produce electricity for about 450,000 homes annually, but flood a wide area of farm and First Nations land along the banks of the Peace River.
Panel members began preliminary assessment of the proposal over the summer.
They now want details on 54 additional issues, ranging from the dam’s impact on wildlife, to the loss of Peace River wetlands and the estimated increase in electricity prices that would be needed if development of Site C were shelved for 10 or 20 years.
B.C. Hydro has just submitted responses to the panel’s first round of questions, and the regulatory clock remains stopped while Hydro prepares answers to the latest queries.
Once all the information is received, the panel could schedule public hearings, decide what further information it requires or make a ruling on whether a public comment period should be held. (MooseFM)
My colleague Damien Gillis told you so! Independent economist Erik Andersen told you so! The Campbell/Clark government has taken the jewel of our diadem, BC Hydro, and forced it into what would be, for any company in the private sector, bankruptcy.
We learn this from a leaked internal BC Hydro document, headlined in the September 11 Vancouver Sun, where Independent Power Projects (IPPs) share part of the blame for the massive power bill hikes on the way for Hydro customers – over 26% by 2016! By 2024, rates will allegedly skyrocket by 57.3 per cent!
Minister Bill Bennett says that the costs from IPPs are “not that great” but doesn’t give any figures. According to Jim Quail of COPE Local 378 – the union that represents many Hydro employees – these losses are due to “a failed experiment with independent power producers”.
$55 Billion in over-priced IPP contracts
What we do know – and have known for some time – is that BC Hydro has signed on for some $55 BILLION of power from IPPs, over the next 20-40 years, to buy power at 2 -3 times the market rate, sometimes far more. We also know that Hydro didn’t have to spend one cent for private power (we’re now a major net exporter, at a considerable loss) and we also know that on Minister Bennett’s orders, at least 10 IPP contracts for unfinished projects will be cancelled.
Minister Bennett, trying to act as if he and his government had nothing to do with the mess Hydro is in, says:
[quote]I’ve been very forthcoming since I took over as minister, in terms of saying to the public that there will be some rate increases. I have always coupled that statement with my commitment that I will do everything I can to keep the increases to a minimum.[/quote]
And while we’re at it, how can a BC Hydro report come as a surprise to the minister?!
LNG is the answer to all our fiscal problems…or so they tell us
When I started preparing this piece, I asked this question: “How are you going to deal with these huge power bill hikes, Minister?”
There is only one way – find some other pathway to the taxpayer’s pocketbook. Be honest, Mr. Bennett, your government has screwed up big-time and no matter how you tart it up, the taxpayer will pay every red cent of Hydro’s debt.
Amazingly, a magic fairy has fixed everything overnight. A day later, “back of the envelope” Bennett has figured out how to deal with a 26% rate increase.
I had underrated his ability to whip into place a change in government policy that truly takes the breath away, for now, 24 hours after the BC Hydro report was leaked, natural gas is the answer! I wonder what policy is on for tomorrow, Minister?
Do you remember when natural gas was a filthy fossil fuel? When the Liberals loudly condemned the Burrard Thermal plant, which for a few weeks of the year, when Hydro is short of power, supplies a tiny amount by natural gas?
The Campbell/Clark government came out in 2002 with an energy policy principally in line with the preferences of the right-wing philosophies of Alcan, General Electric, Accenture and the Fraser Institute. It declared that all new power henceforth (with the exception of Site “C”) would come from private projects.
Map of 700+ IPPs – proposed, under construction, and on-line (ippwatch.info)
This policy designated some 700 rivers to be ruined and sent BC Hydro down the one way road to financial collapse. The only thing in the way for Hydro’s bankruptcy was the bigger and bigger assault on citizens’ wallets.
Of course, now that natural gas has gone from being a toxic fuel to clean energy overnight, can coal-fired power plants be far behind?
A government out of control
This government is out of control. It has had a decade to analyze BC Hydro and assess its power needs and how to meet them – and yet it couldn’t be more off-base.
Why? Because they have made these highly improvident deals with IPPs. Any study of the Hydro problem will run afoul of industry, which is on a gravy train and supported by the Fraser institute. Most of all, they’re hugely frightened that these secret IPP deals – which you’re paying for – would be made public.
Am I bitter?
Frankly, I am, but perhaps not for the reason you might think.
I am a native and lifelong citizen of British Columbia and yes, I’m a British Columbian above all else. Since the scales fell from my eyes in 2005, I’ve fought against IPPs. Everywhere I spoke, audiences would look heavenward, assuming I was exaggerating – I must be, for no government would do this!
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In many meetings I was heckled by shills for the IPP racket, who would try to discredit me by asking red herring questions about Hydro’s workings and by discussing the minutiae of these secret contracts, which only they could claim to know.
I became more and more frustrated and when the NDP blew the election in 2009, I despaired for the province and kept on speaking and writing. I thought some relief would come after the election last May. I’m no NDP fan, having whipped their ass in 1975 and 1979, but I could see that they were the only hope.
Empty vindication
I knew that vindication for Damien, Erik and me would come but what would that mean? It wouldn’t bring our rivers back and it wouldn’t stop the fiscal ruination of BC Hydro.
Now we have a government acting as if the huge mess came from the Wicked Witch of the West. Maybe it has something to do with sun spots or chemtrails.
There will be no political penalty. Just before the next election, the Liberals will trot out a modest increase in electricity rates. According to this leaked document, that’s exactly what they’re planning to do, drastically curbing power bill hikes – just as they did this election year, when they capped increases at 1.44%, further compounding Hydro’s long-term financial woes for short-term political gain.
So yes, I’m bitter that our government and private power industry have destroyed much of the province I love so dearly and dragged our once proud power company to the portals of bankruptcy.
WINNIPEG – Manitoba’s Métis federation is appealing an environmental licence granted for the construction of a controversial $3-billion hydro line.
President David Chartrand said the federation has formally registered an appeal with Conservation Minister Gord Mackintosh. A plan to build a 1,300-kilometre transmission line up the west side of Lake Manitoba would have a significant impact on the Métis, he said.
The hydro line is to run through the heart of Métis territory and would affect traditional cultural activities such as hunting, gathering and trapping. The area is already under “significant environmental stress,” Chartrand added.
“The Manitoba government cannot continue to cavalierly ignore its constitutional obligations owing to the Manitoba Métis community in relation to new development in this province,” Chartrand said in a statement Wednesday.
Consultation lacking
The province’s Clean Environment Commission recommended in July that the government grant an environmental licence to the project, known as Bipole III. But the commission attached a number of conditions and criticized the province for not heeding previous recommendations to improve environmental assessments in Manitoba.
The commission also chided Manitoba Hydro for not consulting enough with aboriginal and Métis communities, Chartrand said.
“This licence now gives Manitoba Hydro ‘carte blanche’ to continue with the status quo,” Chartrand said.
[quote]This is unacceptable to the Manitoba Métis community. The days when the Manitoba government and its agent — Manitoba Hydro — can simply do as they please in relation to lands the Métis rely on for their identity, culture and way of life are over. Our people have been ‘collateral damage’ to Manitoba Hydro’s plans too many times in the past. We will not allow this to happen again.[/quote]
Chartrand said the federation is first appealing to the minister but is prepared to take the matter to provincial court if necessary.
“It is unfortunate that we may be forced into the courts again, but we will not accept Manitoba’s complete disregard of our rights and interests as it pushes forward on its agenda for Manitoba Hydro.”
$3.28 billion project for power exports
Manitoba Hydro has said the project — which is expected to cost $3.28 billion — is needed to make transmissions more reliable and to export more surplus power to the United States.
The Clean Environment Commission held hearings on the project for 10 weeks last fall and this spring before recommending an environmental licence. The NDP government granted the licence last month.
At the time, Mackintosh said the licence includes numerous conditions such as extensive wildlife monitoring and preservation of as much wetland, forest and farm land as possible. He also promised that the province will continue to listen to the concerns of aboriginal communities and will take those into account when considering other project permits.
In 2003 the public utility forecasted BC-only needs were to be 56,241 gigawatt hours (GWhrs) by 2013. In reality, last year’s reported domestic sales (excluding sales to others disclosed as long-term supply contracts to out of province customers – page 68, BCH 2013 Annual Report) were 49,595 GWhrs, – an error of 6,646 GWhrs. (Hydro’s fiscal year ends March 31)
In 2007 BC hydro forecasted BC needs in 2012 would be 57,201 GWhrs. Reported domestic sales – again, net of sales to others – were 49,922 GWhrs, an error of 7,279 GWhrs.
Hydro’s short-range forecasting isn’t much better – even just one year out. In 2010, the crown corporation forecasted BC needs in 2011, 12 months forward, would be 52,024 GWhrs. Reported domestic sales were 49,013 GWhrs, an error of 3,011 GWhrs.
Forecasting errors are irrelevant if no one takes notice of the values. Unfortunately, your government, BC Hydro Board and senior executives saw these forecasted needs as their license to build, contract, borrow and spend, big-time. Using current cost numbers for the proposed dam on the Peace River, Site C, each annual GWhr of error was/is the same as borrowing/contracting for $2+ million.
The amount of borrowing error in the 2003 forecast was about $14 billion at Fiscal 2013.
For the 2007 forecast it was more than $15 billion at Fiscal 2012. The 2010 error for only a one year period was about $7 billion. The further out in time, the bigger the crime.
Population growth, electrical demand stay relatively flat
One should remember this history of continuously being wrong, always exaggerating future BC needs when addressing the new “Integrated Resource Plan” by BC Hydro, vintage 2013.
Like all government-generated material, when it comes to a vision of the future, it will be universally bullish. BC’s population is going to grow fast. Economic activity is invariably going to grow fast, they maintain.
There is lengthy discussion by BC Hydro that sets out how the domestic demand forecast is constructed. Heavy reliance is placed on new construction data, population projections by the provincial government and GDP projections from the same source.
[quote]BC’s population is on a shrinking trend
[/quote]
There are three categories of customers the forecasters treat separately:
Residential customers
Commercial and light industrial users
Heavy industrial users
Contrary to BC Hydro’s and the government’s narrative, BC’s population is on a shrinking trend. During the decades of the 70s, 80s and 90s, provincial population rates of growth were 7% for 5 year blocks. This bullish growth slowed in the first decade of this century, registering a comparative growth figure of only 5.5%.
This growth trend reversal has yet to influence the provincial government and BC Hydro.
Confirmation of this shrinking population growth trend is also found in the government’s fertility records. In 1972the posted fertility factor for BC was 1.966; now in 2013 it is 1.435. Not wishing to endorse a diminishing population trend, the folks in charge of this report and forecast have simply “flat-lined” at 1.400 indefinitely.
Higher GDP ≠ increased electrical demand
A second important indicator for the BC Hydro forecasters is provincial GDP. A logical connection, one would reasonably think. GDP gets frequent mention in the discussions of how demand is generated for both the commercial and heavy industrial customer groups. This seems to be where BC Hydro forecasters get matters seriously wrong.
From 2003 through to now, the annual reported GDP value of BC has increased by 63%. In 2003, it was $138 billion and by 2013, the government was reporting it to be $225 billion. During the same period, none of the three groups of customers increased their amounts of purchased electricity.
[quote]From 2003-2013, residential rates have increased by 50%. They need to increase another 40% now.[/quote]
In cases like this, on the evidence, there is a big disconnection where one would not expect there to be. It clearly diminishes the value of the BC Hydro’s forecasting and seems to explain just why they have continuously made errors.
What this disconnect also suggests is that a considerable chunk of BC’s economy and finances is leaving the province. This economic “leakage” is probably why BC Hydro forecasts remain so irrelevant.
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If the above were not enough, don’t forget that BC Hydro has yet to collect over $5 billion of deferred charges – a controversial form of borrowing against future rate increases. It is not apparent that the BC Hydro forecasters adequately accommodated demand reductions in response to the certainty of sharply higher rates. In the period 2003 to now, residential rates have increased by 50%.
Reaction to this increase has been minimal, as folks have found ways in their personal budgeting to make accommodations. Per capita consumption for the past ten years has been steady at about 3,800 KWhrs. When rates increase, as soon they must, by 40%, the public response is likely to be one of enthusiastically embracing energy conservation and even withdrawal from the grid.
There is immediate relief available for BC Hydro’s embattled customers. Minister Bennett should be required to remove the excess debt associated with new generation designed to serve a misguided cabinet-crafted economic development program.
Plans to provide inexpensive electricity to resource development projects – such as mines and liquefied natural gas plants – are pure gambling. Leave the speculation and gambling to the private sector, where participants have a risk appraisal discipline that comes with using personal money.
This is a major vindication for all of us who have pointed out the obvious – BC Hydro cannot go on paying over two times the market for electricity. It simply can’t deal with the $50 BILLION-plus bill it must pay for the privilege of losing money hand over fist.
Let us always remember that this policy was put in place because the Campbell Clark government, egged on by big business and the loony right wing Fraser Institute, said we would need the energy and that only the private sector could handle this need.
How deep will the cuts go?
The obvious question to the minister is how far will he go? Will he place a moratorium on all future IPP projects? What about other contracts already signed? Will he look at IPP dams in production?
What about the fairness of those deals, which were stated by the BC Utilities Commission as “not being in the public interest”? What if in examining these secret contracts, the minister finds them to be, as I suspect, unconscionable bargains?
Will he start monitoring IPP plants and enforcing environmental rules? Why now, ten years after the Energy Plan, is the minister analyzing this IPP mess?
[quote]Why now, ten years after the Energy Plan, is the minister analyzing this IPP mess?[/quote]
Let good ol’ Uncle Rafe tell you why.
As many have been saying, BC Hydro is bankrupt – at least it would be if it were in the private sector. Its only recourse to avoid actual bankruptcy is to pass this mess off to voters, and that will mean big-time trouble for the Clark government. Premier Clark is now looking towards the election of 2017 and can see her government in deep, deep trouble. She sees the BC Hydro situation as the big issue – demonstrating how the pitiful NDP campaign last May was so harmful to the province.
The premier’s difficulty is that she was part of the energy policy a decade ago and supported it because right wing ideologues like the Fraser Institute advised her government that publicly owned enterprises were to be despised and done away with. In short, the present damage to BC Hydro is irreparable, which was the whole idea in the first place.
LNG Hail Mary
Premier Clark lost all the Campbell nitwits and is now supported by a caucus that was glad to see the end of him. They don’t have an ideological approach to BC Hydro and see their own survival as dependent upon cleaning up this energy mess.
Premier Clark knows this and has a solution: build Site “C” for about $10 BILLION, sell power at a huge discount to large energy producers if they will “mine” gas, largely by “fracking”, then take that gas to Prince Rupert, liquefy it, using huge quantities of subsidized power, then sell it to Asian markets. This will, opines the Premier, not only wipe out the province’s debt but also will put $100 BILLION into a “Prosperity Fund” – and we’ll all be on easy street.
All of this depends, of course, on getting a market for this gas. That depends on its putative customers needing gas in 2017 and beyond. What happens if these future customers have lots of gas? That has largely happened.
(Let me digress to note that recently The UK and Israel have each discovered enough natural gas for 25 years, the point being that the likelihood is that by 2017 – the absolute earliest any of BC’s LNG will be ready for export – gas will be a glut on the market.)
Mr. Bennett is no fool and sees that placing everything on #12 Red on the wheel is madness, while also realizing that what I’ve just said is so obvious that not to deal with it could not only defeat the government but destroy the right wing coalition.
[quote]Premier Clark has no vision because visions cost money.
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Premier Clark has no vision because visions cost money. She sees that the energy situation is catastrophic. She will rely on companies pledging to build LNG plants yet the shovels are barely turning. As the months and years progress, she will “suddenly” find that the world – especially including Asia – will be awash in natural gas. More and more, like Mr.Macawber, her policy will be based on the hope that “something will turn up”.
Thanks to the pitiful press we face, and the just-as-pitiful NDP election campaign last May, the public is largely in the dark about this mess – but that won’t last until the next election in 2017.
Minister Bennett and his colleagues will dip deep into the top hat but, alas, there are no rabbits there.
LNG plants like this one proposed for Prince Rupert could throw a monkey wrench into BC Hydro’s plans
BC Hydro is providing the public just six weeks to respond to its 5,000-page draft Integrated Resource Plan (IRP) – and that doesn’t sit well with a Vancouver-based water advocacy group.
The BC Tapwater Alliance is calling for extended public consultations on the crown corporation’s plan for meeting future power demand in the province.
In an open letter to Energy Minister Bill Bennett, coordinator Will Koop writes:
[quote]After downloading all of the 80 component documents associated with the report (almost 5,000 cumulative pages), and scanning through all of the documents, we concluded that the Minister’s six-week schedule for public input is deficient and unreasonable.[/quote]
The Common Sense Canadian highlighted numerous concerns with the draft plan last week, following its release. Chief among these were Hydro’s failure to address in realistic terms the enormous energy demands associated with “supporting” the proposed Liquefied Natural Gas (LNG) industry.
The plan calls for the building of the multibillion dollar, taxpayer-funded Site C Dam, which would impact close to 60,000 acres of prime agricultural and forested lands. As we’ve repeatedly demonstrated in these pages, the power from Site C is simply not necessary for our current or long-term energy demands in BC.
BC Hydro has chronically overestimated the province’s power needs, justifying in recent years taking on pricey, unnecessary private power contracts. On that point, the BC Liberal Government announced late last week that it was dumping its contracts with ten unfinished private power plants and considering deferring another nine. The reality is the province’s electrical consumption has plateaued over the past five years. We were a net exporter to the tune of well over 10% of our yearly electrical demand in 2012, yet lost $360 million on power sales as we were forced to resell private power at a substantial loss. With exports trending dramatically upward and demand flat, we have no need for Site C – now or in the foreseeable future.
That is, unless Hydro decides to subsidize the enormously energy-intensive LNG industry by powering some of the dozen plants now being planned for BC’s north coast. These complex variables have been given short shrift in the development of Hydro’s IRP, as the BC Tapwater Alliance maintains.
The crown corporation released the documents in late August, following an initial round of limited consultation with various stakeholders. Those discussions occurred prior to the announcement of a number of LNG plants currently on the table, which dramatically alter the conversation.
Yet, it only announced a public feedback window last week, giving citizens and concerned organizations until October 18 to review and respond to 5,000 pages of technical documents. To Will Koop and his organization, this is all highly undemocratic – especially considering the profound, long-term ramifications of things like Site C, LNG and private power projects:
[quote]Given the critical and serious nature of BC Hydro’s future planning of the public’s diverse well-being, ecology, economy, and assets, elements fundamentally connected to the service functions of the electrical grid, we strongly believe that if the Minister adopts all of our recommendations he will better serve the public’s vital interests, and through a timely process of transparency.[/quote]
The water advocacy group is calling for:
Extending the public comment period to November 30th, 2013.
Mandating Hydro-led public forums throughout BC during the month of October, 2013. “A panel of BC Hydro and Public advocate representatives can present information and then field public questions and provide answers. The events should be videotaped and then posted on a government website.”
Making public all written submissions for citizens to access and review
Creating a subsequent period for Hydro to review these written submissions, which should being in December and run til the end of January
Establishing a final written submission period during the first two weeks of February
Given the circumstances, these are sensible and fair remedies to the obvious shortcomings of Hydro’s initial public review period. The Canadian Environmental Assessment Agency recently caved to demands for a longer public comment period regarding a proposed LNG project near Prince Rupert – based on seriously flawed information discovered in Progress Energy’s project description. BC Hydro and the BC Liberal Government should follow the Harper Government’s lead, acknowledging their mistake, and taking seriously the above recommendations.
Processes like these should be designed to maximize public participation. It’s hard not to conclude that Hydro and its government masters are motivated by the opposite intentions when they offer such a short window for consultation on a subject so important to the future of the province’s economy and environment.
Reported by the Vancouver Sun on 17th August, 2013: Powerex (subsidiary of BC Hydro) “has reached a $750 million out-of-court deal to settle claims it drove up electricity prices in California more than a decade ago”. Energy Minister Bill Bennett indicated, “The loss [penalty] will be applied to BC Hydro’s debt in deferral accounts and paid down by BC Hydro’s five-per-cent rate-rider.”
So what was done by whom, how and when? One certainty – BC Hydro’s customers had no hand in the fraud, nor were they ever asked if they wanted their electricity supplier to be engaged in much out-of-province trading.
Trading of electricity by Powerex was historically thought of as a marginal business, only to facilitate occasionally bringing in electricity to meet provincial short-term needs and to sell temporary surpluses to others. Oh, how far off the rails did matters go?
In Enron’s salad days, its board and executives were held up for admiration for their unbridled, rapacious conduct. The Wall Street mantra, preached by the likes of Merrill Lynch and Goldman Sachs, that “greed is good”, prevailed at Enron and, by extension, with the many “wannabees”.
For no reason other than it was there to be done, California was singled out as a worthy place to enjoy the benefits of electricity “deregulation” and this transpired with Enron leading the charge.
The average annual market price for electricity – measured by the PX-Day Ahead Prices, expressed in USdollars per megawatt hour (MWhr) – were stable at $30 for the years 1998 and 1999. In 2000, this price level continued without much change through to the end of April. By December the monthly average was US$385.60 per MWhr. In an 8 month period, electricity measured at the wholesale level, had increased by nearly 1,300%.
That scale of that price increase, in such a short period, just did not make sense in what had always been a stable industry, where balance is well maintained by producers and customers. Just imagine yourself facing a 1,000% increase for gasoline, bread or water. Your sense of outrage would be through the roof, and rightly so.
This pricing change would have been recognized as a game-changer by everyone in the electricity industry in North America. Ignorance of this change by the likes of Powerex, BC Hydro and even the BC cabinet is unbelievable.
This polite representation just describes the fraudulent conduct of the few to extort unearned money from the innocent and many. Morality did not exist among the producers and marketers, making all participants guilty in an active conspiracy to defraud the innocent.
So, just how big a deal was this fraudulent behavior for Powerex/BC Hydro and the government? Starting in 2000, Powerex reported a gross volume of trading in GWhrs of 23,410 at an average price of CDN$48.22 per MWhr. Given the currency differential then, this price was roughly in accord with the US prices above.
Only one year later, with volume almost the same, the average per unit price increased by nearly 500% to CDN$228.37. That change in unit price is one huge “speed bump” not to notice and ask why. It wasn’t until 2004, after the stuff hit the fan in California, did trading prices return to the normal steady state of about CDN$30 per GWhr and has mostly held there until now in 2013.
If the electricity professionals at Powerex, BC Hydro and the provincial cabinet claimed to have missed noticing a 500% price change, you would think they would have noticed unplanned revenue increases of about $8 billion over the course of 2001-2003. Long before 2003 the evidence was in of a fraud being perpetrated on the citizens of California that no one in the Pacific Northwest would have been unaware of.
Even if the $750 million settlement looks like a good deal, it is now easy to understand why the Governor of California showed Premier Campbell the back door when he, Campbell, sought to have run-of-river power generation designated “green electricity”, thereby qualifying this energy for pricing premiums in California.
Dumping this penalty onto the shoulders of BC Hydro customers is an act of accountability avoidance. The BC cabinet should be ashamed for continuing to make BC Hydro customers victims targeted for the immoral, if not illegal conduct of others.
If you take BC Hydro’s recently released draft Integrated Resource Plan (IRP) at face value, you will conclude the following:
BC faces a serious power shortage in the coming decades
In order to meet this gap, we need a combination of conservation, plus the $8 Billion Site C Dam (sure to cost far more in reality)
As a province, we currently need 57,000 gigawatt hours (GWhrs) of electricity per year
BC Hydro should and can supply the massive, energy-intensive Liquefied Natural Gas (LNG) industry with public electricity
There’s only one problem: virtually none of this is true.
Hydro’s dismal track record
For starters, Hydro has a long history of seriously overestimating power demand. In the early 80s, when Site C Dam was first proposed for the Peace River, concerned citizens were told we desperately needed the power. Failure to build Site C would surely mean brown-outs across the province. Then the economy changed and the project was shelved. Guess what? No brown-outs.
Throughout the past several decades, Hydro has consistently been off by 10-20% (sometimes more) in its forecasting – which our resident economist Erik Andersen has detailed in these pages – and that proud tradition continues today.
Historical and future forecast supply and demand (BC Hydro draft IRP)
This chronic overestimation of our power demand helped justify a massive investment in sweetheart private power contracts (IPPs) over the past decade, for which we are now paying 2-3 times the market rate. And, because it mainly comes at a time of year when we can’t use it (the Spring freshet period, when our needs are at their lowest and our big dams at their fullest), we are forced to dump much of it at a loss to our neighbours. In fact, we lost some $360 million last year on power sales, due to these IPPs.
That’s largely because we exported to neighbouring customers 7,400 GWhrs of electricity at an average contracted rate of $43 per megawatt hour, while we pay up to $90-120/MWhr for private power! Other power exports ranged in price – anywhere from one tenth to one half the cost of IPP power. According to Stats BC, last year we were a net exporter of over 5,800 GWhrs of power – more than 10% of our domestic demand.
Remember that 57,000 GWhrs we supposedly depend on each year now? Try closer to 50,000 – where our demand has been plateaued for the past several years, following a dip below that during the depths of the 2009 recession. Check out this neat accounting trick: Hydro includes as part of our domestic demand that 7,400 GWhrs of contracted sales to out-of-province customers – some of which we buy unnecessarily from private power operators, then resell at a loss! So, already, the baseline of this report is inflated by well over 10%.
The LNG wildcard
The reality is our conservation efforts are working nicely already and, despite rising population, our power needs have stabilized and show no real sign of increasing above the 50,000 GWhr region where they currently sit.
That is, unless we decide that our public electricity should power a stupidly energy-intensive LNG program. To put things in perspective, just one of the dozen or more LNG plants proposed for BC’s north coast over the past year – from Shell and its Asian partners’ – would eat up the entire output of the proposed 1,100 MW Site C Dam. That’s one plant. This is because it takes enormous amounts of energy to super-cool gas and turn it into liquid, before loading it onto tankers bound for new markets in Asia.
Hydro acknowledges this in its report, suggesting that “while most LNG producers will use direct-drive natural gas turbines to run the cooling process to convert natural gas to liquid form [read: burn some of their own gas to make electricity], many are expected to take electricity for ancillary requirements, such as lighting, control systems and office requirements. Others may choose electricity for all their energy needs. As the LNG industry develops, BC Hydro will continue to support the needs of this sector.” (emphasis added)
Hydro is proposing “to meet the initial 3,000 gigawatt hours of LNG load and will prepare to meet further LNG requirements as they emerge.”
Proposed Site C Dam – artist’s rendering
It is clear that if any of these plants are banking on using subsidized public electricity for their cooling processes, Hydro will be way out of its depth, even with Site C Dam. If, on the other hand, all they plan to do is power the lights and coffee machines at these plants, then do we really need to flood an 80 km stretch of the beautiful Peace Valley, impacting close to 60,000 acres of prime agricultural and forested lands? Do taxpayers really need to spend – let’s call it what it is – over $10 Billion on a dam we can’t afford, all to power just a fraction of the LNG industry?
The IRP’s LNG section reads like a fumbling, make-it-up-as-we-go reaction to a government program that suffers from a serious lack of clarity and reality. What does LNG really mean to our power demands? How specifically is Hydro planning on working with the industry? Should ratepayers and taxpayers bear the potentially enormous costs, environmental impacts and energy demands to help foster this industry?
LNG is a wildcard in our electricity planning that this report does nothing to resolve.
Site C unnecessary
Moreover, on the matter of Site C and its need, consider that: a) we’re already a net exporter of far more power than we can expect from Site C every year (which more than doubled from the previous year) – that doesn’t sound like a province short on power, and even if it were, Site C wouldn’t be the place to start; b) The BC Utilities’ Commission – the public’s energy watchdog – has been stripped of its oversight of Site C. This is the body whose mandate it is to review projects, above all, based on need. How can we judge BC Hydro’s report and trust its assertion of the need for Site C Dam when the regulator overseeing this very thing has been barred from overseeing it?
In some matters, Hydro is on the right track, such as promoting conservation to address future potential energy demand. Like I say, this is already well underway, thanks in part to the crown corporation’s own programs, and should be an area of serious focus going forward. The significant rate increases on the horizon for Hydro customers may do more to incentivize conservation than any other measure Hydro can come up with. How has this been factored into their model?
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Meanwhile, Hydro’s plans to increase flexibility and energy security within our power grid by adding turbines to existing dams and beefing up transmission capacity in certain corridors are logical (I’m not talking the convoluted, over-priced Northwest Transmission Line here).
Yet Hydro seems to pay only lip service to these sensible solutions, while it stands by its inflated projections, the need for Site C Dam, and committing our public utility to LNG.
There is one curious piece of the report, aimed at stick-handling the touchy topic of private power contracts. Two former Hydro CEOs have gone the way of the dodo for raising concerns about this program, which was, in fairness, foisted on our public utility by the BC Liberal Government.
Somewhat surprisingly, Hydro pussyfoots around the notion of cancelling some of the 47 unfinished projects for which there are 30 or 40-year contracts in place – necessary triage to slow the utility’s hemorrhaging – and coming up with cost savings from those in operation:
[quote]
As BC Hydro plans to meet the future needs of customers for decades to come, it also needs to stay focused on keeping electricity rates competitive with those charged by other public utilities in North America.
The IRP recommends managing the costs associated with BC Hydro’s current energy portfolio of [Energy Purchase Agreements] and selecting the most cost-effective plan to meet customers’ needs within the context of the Clean Energy Act. As part of this cost-management effort, the IRP recommends reviewing IPP projects not yet in commercial operation and renewing cost-effective EPAs that provide benefits such as enhanced system reliability and economic activity.
[/quote]
Government rethinking IPPs?
NDP Energy Critic John Horgan also picked up on this nugget in the report. According to The Vancouver Sun: “Horgan said the review of independent power contracts — and possible termination of these contracts — is a significant departure for the Liberals, who have been supportive of independent power producers.” Horgan’s assumption is that the mere mention of this notion in Hydro’s report hints at a change in Liberal Government policy – which is reasonable, considering the tight control it has subjected Hydro to over the years. The crown corporation isn’t in the habit of going out on a limb with policy suggestions like this one without a mandate from its government masters.
Is it possible that the Liberals, now feeling the full weight of this IPP anchor around their ankles, faced with unavoidable, politically unpopular power bill hikes, are having second thoughts about their pals in the private power racket? Time will tell. The sooner and more of these contracts we can dump, the better for everyone concerned.
As for Site C, unless the people of BC want to subsidize the oil and gas industry with cheap public power and a $10 billion dam for LNG, we simply don’t need it. If we ever do need a little more power, we can get it from conservation, claiming an option we have for 1,200 MW (more than the total of Site C) of electricity under the Columbia River Treaty, and – heaven forbid! – buying a little power from our neighbours, as needed. If we were doing that today, we’d be paying half to a third the price for new power than what it would cost from Site C or IPPs. With our net exports trending dramatically upward, that shouldn’t be an issue for the foreseeable future.
Hydro is accepting public feedback on the draft report – with information on how to submit feedback promised this week – and will be conducting public consultations this Fall.
The environmental assessment for Site C Dam is also requesting feedback on how to structure its public hearings – submissions will be accepted up until September 16 and can be emailed to: SiteCReview@ceaa-acee.gc.ca
AUG 29 UPDATE: The BC Liberal Government announced today the cancellation or deferral of 4 IPP contracts. Minister Bill Bennett is saying the number could reach 20 by the time Hydro has completed its review, connected to the IRP process and belt-tightening mandated by the government.
Living as close to the Peace River as a home can legally get, my family watches a daily nature show that few people realize exists. I would like to share with you a snapshot of spring on the Peace, as we are privileged to see it.
The old cottonwoods along the driveway are a nursery for many different birds. A family of kestrels (sparrow hawks) uses a large branch on their home tree to sun themselves each morning and scan the undergrowth for voles and chipmunks, both rodents plentiful here. A few trees upriver, a family of flickers occupies the trunk of a tall stump. The yellow-orange undersides of these large woodpeckers flashes through the woods each day, almost matching the bright yellow warblers that flit among the alder in our yard.
In front of our home is an island, which elk and deer use as a nursery. They swim out to the island to give birth away from the keen noses of predators like bears and coyotes. Then, when the fawns are strong enough, mothers coax them into the water for the chilly swim back across. One morning in June, I witnessed a cow elk giving birth at the river’s edge! As the calf lay in the shallows, mother took a quick swim, then nudged baby to shore. All clean and less likely to attract a bear’s attention! (Bears do swim to the island occasionally, but they generally linger around the many berry patches on the mainland.)
Canada Geese (photo: Donald Hoffmann)
On this island, a long cliff provides nesting sites for several families of Canada geese. This year, a slightly more exciting species has arrived: Great Horned Owls! My family watches through our spotting scope as a grey ball of downy fluff fledges out into a magnificent young owl, gaining strength and flight feathers until ready to launch out over the river on that first big flight!
Downstream, a similar cliff on our side of the river is home to a colony of about fifty cliff swallows. The whole flock swoops over the river as one, collecting bugs (hopefully mosquitoes) to bring back to their babies, safely tucked into perfectly constructed mud nests that hang in clusters from sandstone ledges.
At the base of this cliff, there is a long, narrow cave that foxes have converted into a den. Every morning at about 6:30, mother fox comes out for a drink before she goes off hunting. If she takes too long to return, her impatient kit sets up a series of sharp barks to call her home. Once, I was lucky enough to see the little rascal, all bright eyes and big ears, before he growled and disappeared into the darkness of his home.
A merganser duck shepherds her eight ducklings around the back-eddy below the cliff, keeping them together with her earthy quacks. Occasionally, she must sharpen her voice and shout at more adventurous babies as they wander too far in their pursuit of the various minnows sheltering in the calm waters of the back-eddy.
A young eagle, its mottled plumage beginning to show the white-headed pattern of adulthood, alights on a snag atop the cliff. A regular visitor here, we refer to it as Tristan’s eagle, because our youngest son takes such delight in the bird’s presence, and because they are the same age.
Mother merganser issues a series of sharp quacks to gather her vulnerable ducklings to her, just as the eagle swoops down to try for a fluffy snack. Mother puts up such a fuss, quacking, flapping and splashing up a maelstrom; the young eagle becomes disconcerted and gives up.
Fox (photo: Don Hoffman)
Mergansers aren’t the only ducks to seek refuge here. We’ve identified at least eight different species using our property for a much-needed rest along their migratory routes. Not just in spring: swans, both tundra and trumpeter, grace us with their elegance each autumn as they move south. Every season is amazing here, even winter when the river otter comes to fish and play on the ice, while the resident beavers are sleeping.
If the Site C dam were to happen, all this would be gone. The cottonwoods, the cliffs, the back-eddy, the island. All these homes would be lost forever to the rising waters and endlessly sloughing banks of the reservoir. And that’s just one tiny portion of the big picture: this proposed project is in all of our backyards. Where would our animals go? What would happen to them? Is it really worth it?
Thank you for taking the time to read this account. I sincerely hope my words can have some benefit to this beautiful region and all of its residents.
An abandoned tanker carrying jet fuel for forestry helicopters battling summer fires lays overturned, leaking 33,000 litres of toxic fuel into the Slocan Valley’s Lemon Creek
by Nelle Maxey
It was a beautiful day.
The day was Friday July 26. It was just like any other sunny summer day in the Slocan Valley, located in the West Kootenay region of British Columbia 650 kilometres east of Vancouver.
It was the height of the tourist season. Bed and breakfasts, restaurants, and retail stores were swollen with visitors. Kayaks, canoes, rafts and tubes filled the Slocan River as swimmers cooled themselves at public and private beaches along the river. Others were in their gardens, assessing if the beans were ready for canning and the garlic ready for digging. People picked raspberries and blueberries from the loaded bushes, dug potatoes, plucked zucchini, and lettuce for dinner. It was a bumper year for gardens in the valley. Farmers were in their fields cutting hay. Market gardeners and local greenhouses irrigated their crops and picked produce to sell.
All this of course was normal. What wasn’t normal, however, was the drone of helicopters flying over the Slocan Valley’s Winlaw area, dumping water scooped from the river on the two-day old Perry Ridge fire.
Then disaster struck the Slocan Valley.
At about 1:30 p.m., a large tanker truck delivering jet fuel for the Ministry of Forests fire-fighting helicopters tumbled into Lemon Creek and dumped 33,000 litres of jet fuel into the swift-flowing creek which joins the Slocan River downstream of the spill.
The driver was on the wrong road. If the driver was on the right road, they would have used Uris Road north of the Lemon Creek bridge. The tanker was on Lemon Creek Road south of the bridge. This stretch of road is a narrow, decommissioned logging road that had been closed to traffic due to slides and crumbling banks.
In the official record of what happen, one report says the driver was to meet forestry personnel who would direct them to the helicopter staging area. This never happened. Instead, the driver proceeded on his own up Lemon Creek Road, past two signs that indicated the road was closed. The driver eventually found a place to turn around and was on his way back down to Highway 6 when a road bank gave way under the weight of the tanker.
The driver, not seriously injured after the accident, scrambled up the 15-foot bank and walked the 6 kilometres back to Highway 6 where a passing vehicle picked him up so he could report the accident. RCMP arrived on the scene at approximately 3:30 p.m. in the afternoon, although the fumes were so bad they could not approach the area. Once it was confirmed the truck was carrying jet fuel, the Interior Health Authority was notified at 6 p.m. on Friday evening. A few hours later, the first evacuation order was issued for 800 residents within 300 meters of Lemon Creek and the Slocan River for 3 kilometres upstream and downstream of the spill. It took many hours before the volunteer firemen and search and rescue teams could be organized to notify residents of the evacuation order. The first phone calls went out around midnight with volunteers going door-to-door in the most affected areas.
Meanwhile back at the spill site, officials estimate the tanker released the 33,000 litres of fuel in about 40 minutes. The fuel slick reached the Winlaw Bridge sometime around 6 p.m. (about the same time the local health authority was notified of the accident). Children swimming in the river near Appledale just north of Winlaw were later reported to have skin rashes. People who were canoeing in the area also reported health effects. Residents along the river between Winlaw and Lemon Creek reported that the smell was so strong by 5 p.m. that they closed up their homes and left the area. Within 24 hours of the accident the slick had traveled 60 kilometres: down the Slocan River, then into the Kootenay River to just above of the Brilliant Hydroelectric Dam at Castlegar. The first boom to stop the slick was established there on Saturday afternoon.
The plume was 2 to 3 kilometres long and 30 to 50 metres wide. A Ministry of Environment spokesperson said a boom was put in place at about 1:30 p.m. on Saturday just above the Brilliant Dam. The spokesperson said the boom’s effectiveness in containing the fuel was being monitored. Officials didn’t know at this time if fuel had entered the dam works.
The evacuation
Within hours of the first evacuation notice issued by the Interior Health Authority, the evacuation was expanded to include everyone in the valley. Anyone living within a 3 kilometre radius of the river between Lemon Creek and Playmore Junction (where Hwy 6 joins Hwy 3 to Nelson and Castlegar) were to evacuate. This affected 2,500 residences. As the fuel progressed down the river, health authorities had become worried sleeping people would not smell the fuel.
People with emergency services and volunteer fire departments began making phone calls and knocking on doors. The evacuation order included a “Do Not Use Water” order to “all users of water supplies within 10 kilometers downstream of the spill.” Later, the wording of the order changed to suggest water wells were okay to use. This was revised again to say shallow wells near the river might be affected. Today, a week after the accident the order explains that if your creek surface water or well water doesn’t smell like jet fuel, then it’s okay to use. Essentially, a smell test was the only test for private water supplies that didn’t originate from the rivers or Lemon Creek. The evacuation order also contained the following statement: “Jet fuel poses an immediate health risk to people. Exposure can burn skin, inhalation can harm respiratory systems and may cause brain damage. It is also dangerous to consume.”
The boundaries of the evacuation and a timeline of events are shown below:
Fifty volunteer fire fighters from the four valley fire departments worked overnight and into Saturday to notify residents of the evacuation. Even though they had help, they concentrated on people closest to the river and spill site. They notified over 800 residents in all. Much of the notification went by word of mouth to neighbours, family and friends, all of which took place at night. Many residents in the north end of the valley left even before the order was issued due to the heavy concentration of fumes.
By noon on Saturday, the fumes had dissipated enough to lift the evacuation order. Residents trickled back into the valley all day Saturday. Unfortunately, at the north end of the valley some people returned to homes that were saturated with the smell of fuel. Even people’s gardens and hay fields were contaminated, not to mention the watering tanks for livestock had a layer of fuel on top of the water.
By this time, people in the valley settled down and most residents assumed the scare was over. Then the town hall meeting was held.
Many questions, few answers
On July 30, hundreds of residents from all areas of the valley jammed Winlaw Hall for a meeting to hear presentations from local government officials, provincial authorities and employees from the company involved. The meeting was not well organized. The handouts did not contain contact information or the names of the speakers. At first, many residents did not have their questions answered as they were told they were not on topic. Then the format was changed and residents were allowed to ask questions of any panellist. Many questions required responses from multiple panellists.
The health official immediately declared the serious nature of this event and explained the reasons for the evacuation. Though benzene was not a component of the jet fuel spilled in the creek, kerosene was a component and is dangerous by skin contact or ingestion. This applies to humans and animals. Aquatic life is at special risk as the specific type of fuel spilled (Jet Fuel A1) is listed to have a chronic toxic effect on aquatic ecosystems.
Residents were informed the “Do Not Use Water” order would stay in effect for 5 to 10 days at a minimum. The order applied to recreation in the river as well as water use from the river and Lemon Creek. All such water systems should be shut down so the contaminated water is not drawn into pipes and hot water heaters. Other surface water users from the creeks not affected directly should use their own judgement and apply the “smell test” to their water. Deep wells were unlikely to be affected. Shallow wells along the river should not be used as they may be contaminated.
This was the first time some residents heard the information about shallow wells and surface creeks. Individual water licence holders or well owners would not receive assistance to have their water tested. Registered purveyors on water systems with more than two users could receive assistance to have water testing done. Residents were also told to wash all vegetables 3 times for 3 minutes before use with potable water (a Catch-22 for residents without potable water supplies), and were also told not to buy local produce.
As residents poured into the line-up for the mic and began asking questions and sharing their stories, the consequences of the spill and the fact that little help had been available were becoming more apparent. The problems associated with the spill were most severe at the north end of the valley, from Lemon Creek to Winlaw. Homes were contaminated with the fuel smell. Fruit trees and vegetables were contaminated. Hay fields and pastures were contaminated. No water was available for livestock, poultry or gardens.
Many people were without any water for drinking, washing dishes, flushing toilets or showering. Similar water problems prevailed all along the river to the lower valley – especially contaminated hay and pastures, no water for gardens and livestock, as well as difficulty hauling enough water from potable water tank stations for resident needs. The meeting was held five days after the spill and potable water tanks had been set up in four locations in the valley only on the day of the meeting.
As of Saturday, August 3, the water and the rocks in Lemon Creek still smelled of jet fuel. There was a sheen visible and emulsion (milky-looking jet fuel and water mix) under rocks in the creek at the Lemon Creek bridge on Highway 6. The road has been remediated just before the accident site where fuel spilled from the tanker. There is no fuel on the road at the actual location where the truck went off. There is water from seeps in the rock face running across the road at that location. You can see this water in published photographs. Workers at the site agreed that the water run-off contributed to weakening the bank that collapsed under the truc, resulting in the fuel spill.
Recent developments:
Until further notice, a “Do Not Use” order for drinking water and recreational use remains in effect for Lemon Creek, Slocan River and Kootenay River above and below Brilliant Dam. Fuel is still visible in the containment booms and along the shoreline.
Garden vegetables, fruit, eggs, and dairy milk that were contacted by the fuel vapor are SAFE to consume as long as they do not smell like fuel or have a fuel sheen. Interior Health is advising residents to thoroughly wash fruit and vegetables with alternate water sources to remove any dirt and debris prior to consumption. Food products that have been irrigated with contaminated water AND smell like fuel should be discarded.
Aproximately 1,000 litres of contaminated material has been recovered.
RCMP have issued Vessel Operating Restrictions for the Slocan River from Lemon Creek to the Kootenay River, which will be lifted when the clean-up has been completed.
The smell of jet fuel is still apparent in the Lemon Creek area and responders equipped with gas monitors have been testing the air quality outside residences close to the spill site.
Many residents in the valley are still waiting for promised testing.
A Resiliency Centre is being established at the Winlaw Elementary School to support residents with shower, lavatory and emergency support services. It is expected to open within the next couple of days.
Polaris Applied Sciences from Kirkland, Washington was hired to conduct a Shoreline Clean-up and Assessment Technique, or SCAT. Leading the SCAT team is Polaris principal, Dr. Elliott Taylor, a world-renowned expert in spill clean-up operations. The assessment is underway and is already providing additional information which is helping to clean up the waterways by providing operational focus to the response teams and prioritizing where we focus our attention.
Light “flushing” activities are being conducted to free product (Jet Fuel A1 / without additives) from stream banks and vegetation to make it available for collection. Nearly 1,000 metres of containment boom has been deployed throughout the Slocan River system and it is capturing any free-flowing product. The product is being skimmed off the water into a vacuum truck and removed to a licensed waste facility. In areas where soil is impacted, the soil is being removed and trucked to a separate licensed waste facility. A significant amount of contaminated water and soil was recovered.
Experts continue to collect water samples, sediment samples, and fish and wildlife from the impacted water courses. Wildlife mortalities to date have been collected and sent to the laboratory for analysis.
Water quality test results are being sent to the Interior Health Authority to assist in making a decision on when the “Do Not Use Water” order may be lifted.
Responders equipped with gas monitors have been testing the air quality throughout the area of potential and observed influence. To date, atmospheric concentrations have been within established government standards; however, the smell of jet fuel is still occasionally apparent.
Nelle Maxey is a grandmother who lives in the beautiful Slocan Valley in south-eastern BC. She believes it is her obligation as a citizen to concern herself with the policies and politics of government at the federal, provincial and local level.
