SITE C DEVELOPMENT(2004 – Revised 2006) In March and April 2004 BC Hydro filed its “Integrated Resource Plan and Resource and Expenditure Plan” with the BC Utilities Commission (BCUC). Both are important plans for the continued security of electricity supply in BC.
Among the proposed resource additions is Site C on the Peace River. It would add 900 MW capacity and 4800 GWh energy, an 8% to 9% increase over today’s installed capacity.
The need for immediate supply-side additions is irrefutable. BC’s appetite for electricity will grow over the next 20 years. In the aggregate, both BC Hydro and FortisBC are forecasting an increase of 30% to 35% by 2022-23.
Today BC is importing over 10% of the energy required to meet provincial demand and that figure will grow in the near-term.
Standing still only gets us farther behind. There is no question that Site C should be developed.
Site C is not enough It will be 9 to 10 years before Site C can be commissioned. In the meantime, BC’s energy deficit continues to grow which will be exacerbated by the Province’s current and forecasted strong rates of economic growth. Burrard Thermal is likely to be mothballed within the next 8-10 years which will remove one source, albeit a very expensive source, of generation from the grid which only enhances the need for Site C to be undertaken.
BC has all its eggs in one basket – 90% of our electricity production is hydraulic. In extended periods of low precipitation reservoirs are incapable of providing the flows required to meet provincial demand. As a result, British Columbians are exposed to market purchases, and price volatility.
In 2002 the BC Energy Task Force report pointed out that BC Hydro maintains a very thin margin for risk – 7% to 8% contingency for unforeseen events, compared to 10% to 15% in other jurisdictions. With “drought” conditions affecting reservoirs throughout the Pacific Northwest, and no alternative domestic supply, BC’s security of supply is clearly at risk. BC Hydro itself expects that in 2007/08 its ability to meet domestic peak requirements will be overtaken by demand growth.
BC needs supply side expansion and diversification now and an enhanced planning process to ensure the Province can achieve energy and capacity self sufficiency over the longer term.
As stated, The Chamber strongly supports the development of Site C. The Chamber would also note that BC Hydro has not constructed a large dam in the Province for over 20 years and is concerned with the overall capability of BC Hydro to undertake such a large, complicated and important project. As discussed earlier, Duke Point demonstrated that the private sector can develop projects more economically than can BC Hydro. The Duke Point developers would have delivered a project for almost $100 million less than BC Hydro’s failed Vancouver Island Generation Project (VIGP). The figures that BC Hydro has made public concerning Site C support The Chamber’s view that Site C should not be a project designed, developed, constructed and funded by BC Hydro. It is the Chamber’s view that Site C should be a private sector undertaking.
THE CHAMBER RECOMMENDS
That the Provincial Government;
1. support the development of Site C on the Peace River and furthermore that Site C be designed, developed, constructed and financed by private investors and preferably individual British Columbians through an initial public offering of shares;
2. establish an electricity market facilitator, with a mandate to take a long-term view of the electricity industry’s economic potential,to be developed and funded by private investors, in exchange for building long-term security of supply for British Columbians; and
3. urgently move toward fuel diversification in the electricity industry, particularly production by means of coal and coal-bed methane with appropriate environmental standards.
