February 14, 2019 – Vancouver, British Columbia
Clean Energy BC (CEBC) is very disappointed with the contents of the “Review of BC Hydro’s Purchase of Power from Independent Power Producers” conducted by Ken Davidson. In his report, there is a fundamental error in using an inaccurate and overly simplified proxy for the market price of electricity. It is stated, “Energy has only one price and that is the price it can be bought or sold at in the market. In the case of BC Hydro, the market value of all energy is the Mid-Columbian (Mid-C) rate.” No party that builds new energy projects – BC Independent Power Producers (IPPs), BC Hydro, or IPPs or utilities anywhere – uses a spot price like Mid-C. Projects are based on long-term fixed price arrangements.
Independent Power Producers have been essential to BC’s green power grid. Historic investments have enabled BC to become an internationally recognized clean power leader, propelling our province to meet the reduction targets in CleanBC and the Paris Agreement. IPPs across the province are proud to have invested in the infrastructure, jobs, and community building of BC.
Furthermore, IPPs have built strong and long-lasting relationships with numerous First Nations in the Province. Our partnership approach supports First Nations’ economic development and reconciliation by providing jobs, equity partnerships, and socio-economic benefits – often in remote areas where there are few other opportunities available. Research has shown that clean energy projects offer the single most powerful First Nations reconciliation tool available for the BC government. Historically, BC Hydro has lacked First Nation inclusion in their process, leaving a gap that IPPs have successfully filled to cultivate equity partnerships.
“When the B.C. NDP government chose to proceed with Site C, they did this knowing that they would deprive First Nations of the opportunity to invest billions of dollars in an industry that is within their values. It is a sad day that this is no longer an option to communities that were developing plans to build more projects.”
— Kekinusuqs, Judith Sayers, President of the Nuu-chah-nulth Tribal Council
The IPP run-of-river hydro, wind, and solar generation has diversified the power mix and brought power to regions and communities previously under-served. The majority of IPP projects have been approved by the BCUC regulatory process. During the period of time referenced in the report, the contract prices that were agreed upon were based on market rates that, even if BC Hydro were to have built the projects, would have been constructed at the same or higher rates. In addition, BC Hydro does not have the capacity or capability to build these types of projects.
IPPs contribute to property tax and water rental revenues collected by Government. In 2018, the total tax contributions made by IPP projects in BC were greater than that of the entire oil sector. If new renewable power projects had not been built, new power capacity requirements would have been met by gas plants with related emissions profiles.
Independent Power Producers negotiate in good faith with government, risking capital, investing in trail-blazing new partnerships with First Nations and utilizing the best market information available. The member companies of Clean Energy BC have historically championed BC’s climate leadership vision and continue to support the Province’s invigorated new CleanBC Plan. We look forward to a long-term relationship with the Province of BC as it endeavours to achieve its international commitments to carbon reduction through electrification.
“Our members are delivering low-cost, affordable, and reliable power throughout the world and in BC,” said Jae Mather, Executive Director of CEBC. “Other nations across the globe are actively accelerating the transition to renewable energy. The clean energy sector is driving the third industrial revolution, investments, and jobs, and BC’s future is locked into the low-carbon world. We look forward to working on the CleanBC plan with the Government of BC so that we may reduce our carbon emissions, grow the economy through investment and jobs, and build resilience with First Nations and communities throughout the province.”
For media inquiries, please contact Jae Mather, Executive Director of CEBC