To the editor:
As Christy Clark’s government moves ahead with their political decision to build Site C, there are three questions B.C. residents should be asking themselves regarding energy:
• What’s your conservation potential?
• How much are you willing to pay for electricity?
• How attached are you to getting your electricity from a large utility?
The case for Site C is based on BC Hydro’s integrated resource plan (IRP) which forecasts provincial electricity demand and evaluates options to meet that future demand. No future demand, no need for new generation.
In reviewing the case BC Hydro made in its IRP, the Joint Review Panel identified several flaws that led to a bias toward a Site C option, lack of consideration of other potentially more cost-effective options, and uncertainties in the forecasts that the demand for a project of that scale even exists.
So why does your conservation potential matter? BC Hydro is mandated to meet future demand and with that perspective assuming you’re more willing to stick to old habits and technology, and pay for a $9 billion mega dam is more conservative than assuming you’re willing to do too much to save energy costs. 4.61 million BC residents divided by $9 billion (excluding debt), that’s almost $2,000 per person, $5,000 per household to supply just over 7% of our electricity demand by 2030 according to forecasts. It’s likely with that kind of coin you could easily erase the need for Site C. To give you some perspective, the average BC house uses about 900 kWh per month. Recently I built a new house went almost 100% LED to test how far I could go. Without compromise, my last 6 month bills are consistently 60% less than that, long term money saved from my pocket rather than Site C.
How much are you willing to pay to provide electricity to your home? Good question. What is the long term BC Hydro rate forecast so we can make some informed decisions about our conservation and energy sources. This was not provided in the BC Hydro’s business case when the project was $8 billion and not announced to you when the price jumped to $9 billion and the project was approved. What we do know is that in 2013 a 28% rate increase over 5 years was approved and that still won’t bridge the backlog of what BC Hydro really needs to keep the lights on. So how much more are you willing to pay? And, have you asked Christy Clark how much your rates will be by the time Site C is built, say 2030?
So what if you made the easy step of maximizing your conservation potential and you saw the writing on the wall of at least 4% increases in hydro bills over the long term? Perhaps you’d do your own resource planning exercise and determine that financially it makes sense to develop your own electricity. The more likely scenario that could potentially collapse BC Hydro’s demand forecast case for Site C. Major disruptions are happing in the US as people are generating their own power and utilities in places like Arizona, California, and Florida are shedding customers. Remember when you cancelled your cable package for Netflix?
As rates from big utilities climb the price of solar continues to sink and both private sector and government are driving the train. Solar power is already beating the grid in 10 US states mobilizing the private sector to aggressively develop solar projects. By 2016, grid parity is expected to be achieved in all 50 states. The US Department of Energy’s Sunshot initiative a partnership with industry is aggressively targeting to crunch that further achieving 6 cents / kWh by 2020, far less than the unit energy cost predicted for Site C. By 2030, Sunshot’s goal is for 14% of the power in the US to come from solar. Contrast that with Site C projected to generate 7% of BC’s electricity demand at that time and the potential of solar taking a disruptive chunk from of Site C’s projected revenues is conceivable.
The ultimate disrupter however, would be pulling the plug on the big utility and rising rates all together.
Elon Musk’s seemingly limitless cheque book and ambition is setting the wheels in motion. Fed up by government and industry’s inability to act on climate change he’s motivated to take matters into his own hands in two of the most critical areas: electricity and transportation. Musk’s already proven solar development model with Solar City, is ready to change the game by taking control of the entire supply chain with this year’s purchase of solar panel maker Silevo and the development of the world’s largest lithium ion battery pant. Both initiatives have central objectives to make both electric vehicles and solar power more affordable.
Projections rarely go as planned, but when fundamental assumptions change and utilities have limited flexibility to account for them they can be plain wrong. This week the head of Site C’s Joint Review Panel spoke out and said he’s not convinced, why should we? Particularly since the BC Liberals are purposely avoiding a non-political evaluation of the project by the BC Utilities Commission to confirm it is in the best interest of the rate payer.
The future will tell if Site C’s high cost locks BC into a potential 100 year asset or liability, what is evident however, is that the risk need not be taken by the taxpayer (i.e. ratepayer). When the stakes are this high, the only conservative option is not a publically funded mega project but one that is flexible to respond to demand by being developed incrementally with shared costs from the private sector.
Robert Stupka, MASc., P.Eng