Fact Sheets

The cost at which BC Hydro acquires energy from private power producers is frequently misunderstood and misinterpreted. In particular, the average adjusted firm energy* price from the 2009/10 Clean Power Call has been compared to the non-firm spot market price for energy imported from the U.S. The allegation continues that the BC government’s policy of energy self-sufficiency will produce large surpluses of expensive power that will have to be sold into a much lower priced spot market.

In its current Revenue Requirements Application before the BC Utilities Commission (available at www.bcuc.com) covering the years F2012-F2014, BC Hydro requested a rate increase of 9.73% in each year, which compounds to a 32.1% increase over the three-year period.

With one minor exception, BC Hydro has planned its electrical system on the basis of self sufficiency since its inception. The reason is simple – almost all of its generating facilities are hydroelectric and subject to weather-related variations in reservoir inflows. BC Hydro cannot depend on cost-competitive imports and purchases on the spot market, but must have firm sources of supply that it either owns, controls or has long term contracts for.

To be considered in this scenario is the potential impact on supplies of electricity if the ambitious conservation goals recorded in BC Hydro’s Demand Side Management forecasts are not met. How would that supply gap be filled – at what cost – and at what impact on customer rates? And what would be the impact on B.C.’s mandated goal of self-sufficiency in electricity by 2016?

While there has been considerable discussion of BC Hydro’s multi-billion dollar capital budget for facility upgrades – and the 32% rate increase needed to support it – the future impact on rates of the expenditures recorded in the corporation’s ‘deferral’ and ‘regulatory’ financial accounts have yet to be determined.

BC Hydro currently records 89 Electricity Purchase Agreements (EPAs) with private power companies including those generally recognized as ‘independent power producers’ and large generators such as Alcan and Columbia Power Corporation. These EPAs represent about 14,244 gigawatt hours per year (GWh/year) of energy purchases.

Geothermal power is a form of renewable energy utilizing subsurface hot water or steam created by the heat beneath the earth’s surface. Heat from the earth’s molten core in areas of volcanic activity or at the juncture of the earth’s tectonic plates, flows naturally toward the cooler surface to form hot springs, geysers, steam vents (fumaroles) and boiling mud pots.

Wave energy is the term used for the energy generated from the power found in waves.

Large Hydro generates electricity by harnessing the power of moving or falling water to produce mechanical/electrical energy.

Run-of-River hydro power is one of the renewable electricity generating options available to British Columbians, along with wind, solar, geothermal and biomass energy.

Solar photovoltaic (PV) power is the conversion of sunlight into electricity via solar cells within a solar panel or module.

Tidal energy is the term used to describe the energy generated from power found in ocean tidal currents and the use of tidal height differences.

Typical wind turbines can now generate up to 3 megawatts (MW) of electricity each and are 200 times
more efficient than they were two decades ago.

Biogas is produced by the anaerobic digestion (absence of oxygen) of materials such as biomass, manure, sewage, municipal waste, green waste, plant material and energy crops.

Biomass energy generation is the creation of heat and/or power from carbonaceous substances such as solid wood or wood residues, agricultural crop residues, aquatic plants, animal wastes, and dedicated energy crops such as tree farms.