Yesterday the BC Government issued a press release entitled Province delivers on commitment to freeze BC Hydro rates. The release states:
The British Columbia government is delivering on its promise to freeze BC Hydro rates, putting an end to the years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources Michelle Mungall announced today.
You would be forgiven if you thought that this announcement meant that BC Hydro rates were not going to go up next year. Clearly the CBC , Black Press and numerous other news outlets thought this was the case. So imagine our collective surprise during Budget Estimate debates for the Ministry of Energy, Mines and Petroleum Resources when we found out that in fact this isn’t yet confirmed.
Instead, what the government has done is instruct its Crown Corporation, BC Hydro, to ask the independent British Columbia Utilities Commission (BCUC) to consider overturning its already approved 3 percent rate increase for 2018. It is entirely uncertain whether the BCUC will do this given the autonomy of this organization, the very legitimate concerns about the fiscal sustainability of BC Hydro, the ability for intervenors to provide further information and so forth.
As evident in the discussion below, Tracy Redies (MLA for Surrey Whiterock), Mike Bernier (MLA for Peace River South) and I worked collaboratively to unravel what was really going on. It was a very respectful, yet revealing, debate. In the end, both the BC Liberals and I felt it was important for the Minister to issue a clarification so that British Columbians understand that there is still uncertainty as to whether or not rates will be frozen.
T. Redies: Minister, today you made the announcement that you’ll be freezing B.C. Hydro rates for a period of one year starting April 1, 2018. That was a little surprising because yesterday you had talked about doing a review and trying to find cost savings.
I’m just curious now that you’re forcing B.C. Hydro into this $150 million hole, how is this going to be made up? Are additional capital projects going to be cancelled?
Hon. M. Mungall: We canvassed this issue quite extensively yesterday with B.C. Hydro staff. The announcement made today was actually exactly what I said we would be doing yesterday. So there’s absolutely nothing different from any of our conversation, any of the questions that the member opposite asked.
All the answers would still stay the same because, at the end of the day, I asked if B.C. Hydro staff can go home to Vancouver, or if they were required to stay to answer any further questions. I was told that there wouldn’t be anymore B.C. Hydro questions.
So I don’t have the appropriate people to go deeper if the member is wanting to do that. I’m happy to take any questions in writing and make sure that I get back to her in a timely manner.
That being said, it’s her time, so if she wants to ask questions, she can. But I’ll let her know now that my answers from yesterday would be the exact same today.
T. Redies: Thank you, Minister, for your answer. I’m just very surprised that you have made an announcement. That’s why we’re back today. You’ve made an announcement, or rather, the minister has made an announcement. Pardon me. The minister has made an announcement that is going to affect the company by $150 million.
Would there have been no discussions with B.C. Hydro in terms of how this would be made up? I mean, you wouldn’t just make a decision about $150 million without having some idea of how this was going to be made up. Surely, the minister must know something.
Hon. M. Mungall: As I was saying yesterday, the rate freeze has always been tied to a review of B.C. Hydro. Also, as I said yesterday, the rate freeze will be starting in April 2018. If it goes forward — we hope that it does — the BCUC, ultimately, is going to be looking at this.
What has happened is that we have collaboratively worked with B.C. Hydro. B.C. Hydro is changing its revenue requirement application from the 3 percent rate increase it had in that RRA for April 2018 to zero percent. They’ve amended their RRA that is currently before the B.C. Utilities Commission.
The B.C. Utilities Commission will then do the due diligence that is required and determine whether a zero rate increase is acceptable. Should it be acceptable, then we will move forward with that rate freeze and conduct a review of B.C. Hydro over the course of that year. Because the rate freeze doesn’t come into effect until April 2018, it actually gives us time, by the time all of the accounting is done in that year of review, to look at ways where we can mitigate any impacts of the freeze.
T. Redies: I’m now very confused. The minister and her government just announced today a rate freeze. But I think, based on her answer, she’s saying it may or may not happen because the BCUC might decide it’s not appropriate. Is that correct? Is there a rate freeze or isn’t there?
Hon. M. Mungall: There is going to be an application for a rate freeze before the B.C. Utilities Commission.
T. Redies: So if it wasn’t a done deal, why would the minister and her government go out with a public release today telling the public that there is going to be a rate freeze starting April 1, 2018? That makes no sense.
Hon. M. Mungall: I’m sorry if the member opposite didn’t feel that I was clear yesterday. I felt that I was. I thought that I was very clear that we would always be going forward to the B.C. Utilities Commission in this very fashion. That was part of the news release that we put out, and it’s what I said to reporters just an hour and a half ago. Members opposite, I do believe, had staff people recording that, so they can go back and see that. But that has always been the process that we talked about — yesterday as well as today.
T. Redies: I know what the process is, Minister. I know what the process is. I’m just confused as to why the minister would go out with a public press release announcing this rate freeze, when she didn’t know whether or not it was going to actually happen. Isn’t that a bit misleading for the public?
Hon. M. Mungall: As I said to the member opposite, the process was clear. It is in the news release. I was clear with all of the media about the process — that we’re bringing it to the B.C. Utilities Commission for review.
A. Weaver: With respect to the minister, I’d like to read the formal government press release. It says this:
“The British Columbia government is delivering on its promise to freeze B.C. Hydro rates, putting an end to years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources announced today.
“B.C. Hydro rates have gone up by more than 24 percent in the last four years, and by more than 70 percent since 2001. The minister says that in 2016, B.C. Hydro applied to the B.C. Utilities Commission for three years of increases, with a 3 percent increase planned next year, but will be pulling back its request, consistent with this administration’s commitment to a rate freeze.
“‘After years of escalating electricity costs, British Columbians deserve a break on their bills,’ said the minister. ‘From the moment we took office, we’ve taken action to make life more affordable. As part of that, we’re going to make sure that B.C. Hydro is working for the benefit of British Columbians and that its rates reflect that commitment.’
“The rate freeze will provide government the time to undertake a comprehensive review of B.C. Hydro. That review will identify changes and cost savings to keep rates low while ensuring B.C. Hydro has the resources it needs to continue to provide clean, safe and reliable electricity. Details of the scope and process for the review will be developed once government has made a final decision.
“After completing a comprehensive review of B.C. Hydro, any cost and revenue adjustments identified will be reflected in the rates starting in April 2019.
“The rate freeze” — again — “follows government’s commitment in its September budget update to phase out the provincial sales rates on electricity.”
It says nothing about approaching BCUC. It’s very clear, and I concur with the member opposite. I feel that this is quite misleading. I would like the minister to please clarify why the press release says, on the one hand, there’s a rate freeze, and now here today we understand that there’s not really a rate freeze but an application for a rate freeze.
Hon. M. Mungall: He read the press release in full, and he also read directly from the paragraph that talks about B.C. Hydro going to the B.C. Utilities Commission and exactly how the full process is taking place, how it’s tied to a review.
I am sorry that he finds it misleading. I personally am curious as to how he does. I mean, it seemed to be really clear to me.
T. Redies: Now that the minister has gone out with this press release, what does she plan to tell British Columbians if BCUC comes back and says: “No, you can’t have a zero percent rate increase”?
Hon. M. Mungall: That’s a fair question, absolutely, and we’ll cross that bridge when we come to it. We have to go through the B.C. Utilities Commission first. We value the input that the BCUC has in our rate-setting process. We value the input that they have overall in managing our public utility from an independent, expert body looking out for the interests of the public. So we feel that the appropriate process, as defined in legislation and regulation, is to go through the B.C. Utilities Commission first and foremost. We will see what their decision is.
T. Redies: We are not quibbling about the process with BCUC. This is a process that B.C. Hydro has undertaken pretty much every year. They have a regular dialogue with BCUC, and if there are going to be rate increases — I guess now zero increases — they have to get BCUC’s permission. What we’re questioning is why the minister would go out with an announcement that signals, I think, to the public very clearly that they are responding to their prompt campaign promise and they are delivering on a rate freeze when she doesn’t have any degree of certainty that she’ll actually be able to deliver on that.
Hon. M. Mungall: I think that it’s appropriate to bring the public along with government as we take action on a number of items. I think that it’s appropriate to let the public know that we’re taking action on this item that was very important to them.
It was clear on the doorsteps I knocked on and, I’m sure, on the doorsteps the member opposite knocked on — and on any doorsteps in this province — that people are concerned about affordability. Every dollar counts when we’re dealing with an affordability crisis. So we committed to freezing hydro rates as part of our larger package in dealing with affordability. I think it’s appropriate to then tell the public what we’re doing to meet that commitment and be upfront about it, and that’s what we’re doing.
M. Bernier: Just trying to understand and clarify this, then. The minister made an announcement earlier, saying that they’re saving $150 million of taxpayers’ money through the rate freeze. She’s also on record saying that she respects the autonomy of the Utilities Commission. But by this announcement, she’s also admitting, it sounds like, that she’s prejudging the outcome now of that same group of which she says she respects their autonomy.
Can the minister explain to not only this House but to the people in British Columbia, because now we’re really confused: are they saving $150 million right now? Or are they, as she says, just putting the application forward and having to wait now to see what the Utilities Commission is actually going to say and whether they’ll approve that application?
Hon. M. Mungall: So I just want to be very clear for the record that I’m not prejudging, and nobody in this government is prejudging, the outcome at the B.C. Utilities Commission.
What we are doing is the appropriate process, and we are being upfront and honest with the public. I think that is the right thing to do. I think we all in this government think it’s the right thing to do. And so that is what we’re doing.
M. Bernier: So can the minister then clear the air, in the sense of letting the public know and letting this House know: was it an accurate comment for her to make, then, that says that the taxpayers are now saving $150 million? Or is it more of a fair comment to say they’re waiting to see if the Utilities Commission approves their application? At which point, if approved, they might be saving money.
Hon. M. Mungall: Just to clarify. I’m sure the member meant this, but just in case, and for the people who might be watching at home, the savings of $150 million would be felt by ratepayers, not taxpayers. I’m sure the member knows that difference, but I just want to clarify for anybody who might be watching.
Again, I think what is important to note here and what I’ll be sharing — and it sounds like it might be over and over and over again — is that we made a commitment during the election to make life more affordable for British Columbians. We are living up to that commitment.
One of the ways that we said we would do that is to freeze hydro rates. There is a process to go through to get to that place, and we’re following that process, and we’re being upfront and honest with the public about what that process is. We intend to live up to our commitment, absolutely, but we’re going to follow the process to do that.
M. Bernier: So just to the minister, I’m well aware of the process. I managed a utility company — was part of that for 22 years. I worked with the Utilities Commission through rate applications for that entire time, so I’m well aware of it. And every single time, we were always told that we had to wait, because sometimes on a Utilities Commission application, there are opportunities for intervenors, there are opportunities for discussion, there are opportunities on a wide gamut of things.
And you could never prejudge what the Utilities Commission would say. It’s an independent body that’s actually directed to be independent to look out for the ratepayers of British Columbia — as we canvassed yesterday and the minister was quite open on, when we talked about Site C and the role of the Utilities Commission then.
So, again, I’m just trying to understand, because…. The minister is publicly saying that the taxpayers, to make life more affordable, are going to be saving $150 million, but I have yet to hear the commitment. Is she actually directing the Utilities Commission to accept this application? Is the Utilities Commission being told, then, by government that they have to actually put this rate freeze in and accept that?
Hon. M. Mungall: As I’ve said earlier, there’s been no direction to the B.C. Utilities Commission, and should they disagree with the rate freeze, we’ll deal with that when the time comes.
M. Bernier: Is the minister willing to retract her press release and the comments then, because her government has come out and announced that the taxpayers of B.C. are saving $150 million? I think it’s fair now to say, from the line of questioning here and the answers, that they’re actually not. It’s still a maybe.
I know that her government has made promises. I know that her government and the ministry have made commitments. I’m not trying to take away from that. What I’m trying to ascertain is whether those commitments are actually still a pie in the sky. Are they happening? Are we waiting for reviews? Or is she actually telling BCUC what to do?
It sounds like the minister is not directing the Utilities Commission to accept this application. So in essence, is the minister willing to retract the press release and say that in essence, again, the people of British Columbia aren’t necessarily going to be saving $150 million yet?
Hon. M. Mungall: We’re going to have to agree to disagree here. I feel very, very solidly that our press release, everything I’ve said to media and everything I’ve said in this House has been consistent. There is no inconsistency from my perspective. I feel that we’ve been upfront. We’re being transparent. The members opposite may disagree. I’m not really surprised by that. I mean, they’re the opposition, and that’s their job. But we’re going to have to agree to disagree here.
A. Weaver: Before I ask the questions, I’d like to seek leave to make a brief introduction.
Introductions by Members
A. Weaver: I’d like welcome a group from Vancouver Montessori School here, who are accompanied by their teacher, I understand: Mr. Michael Lee from Vancouver. I just saw them come in the audience, and I thought we’d introduce them and give them a little idea that what we’re debating here is the budget estimates for the Ministry of Energy, Mine and Petroleum Resources. The Liberal members opposite with the Green Party members are debating with government on this particular topic. With that, I welcome you, and I’m sure the rest of my colleagues here would welcome you as well.
A. Weaver: I’m really troubled by the line of questioning here, and I’m really troubled by what’s being revealed. I have read that press release carefully. It is very clear from that press release that the government is telling British Columbians that they are going to freeze Hydro rates by April 2018. That’s the only message that you can take from this press release. It’s the only message that we took from our no-surprises, good-faith confidence and supply agreement discussions about this issue here.
This is a surprise that we are not actually freezing rates, but we’re going to the BCUC to ask them whether they will give us permission to freeze rates. But we’re not going to influence them on the one hand, because we respect the independence of the BCUC. But on the other hand, we’re saying that we’re saving $150 million. You can’t have it both ways.
So I would like to reiterate the concerns expressed by the member for Surrey–White Rock and the member from Peace River South and suggest that in emphatic terms that I believe that the minister owes British Columbians a formal correction in a press release. I will ask: will she be willing to do that in response to the line of questioning that we have seen here today?
Hon. M. Mungall: I guess, also, the Leader of the Third Party and myself and our government are going to maybe have to agree to disagree in terms of the wording of the press release. I feel it’s very clear. He did read it out. I don’t know what is unclear about that, but I think we’re just going to have to agree to disagree on this.
A. Weaver: The press release should have said this, “B.C. government will seek the ability from BCUC to freeze rates,” not “B.C. government will freeze rates.” But they said, “B.C. government will freeze rates,” and that’s simply not correct. There’s no other interpretation here.
You know, sometimes it’s okay to admit that you’ve made an error, but it is not okay to double down in defence of something that is clearly wrong. Again, to the minister: will she correct this publicly? Because it is misleading, and people across British Columbia think that their rates are going to freeze in April 2018, when they’re not. They’re not going to freeze unless the BCUC says they will.
Hon. M. Mungall: We’ve been canvassing this issue for just over 45 minutes now. I haven’t offered any new information or anything different, and I think we’ve come to the conclusion that this government and members opposite are just going to have to agree to disagree in terms of the wording of a press release.
Today in the Legislature I rose in Question Period to question the Minister of Energy Mines and Petroleum Resources about the need for Site C in light of a nonexistent LNG industry. I further questioned whether or not she would defend the interests of British Columbians and ensure a fair price for our natural gas assets by evoking a cancellation provision with the Progress Energy royalty agreement (as Petronas has not made a positive final investment decision).
In addition, in April, 2015 when Bill 23, The Miscellaneous Statutes Amendment Act was introduced by the BC Liberals, the BC NDP and I spoke out about profoundly troubling changes to the way Royalty Agreements are managed under the Petroleum and Natural Gas Act. Under these changes, the Minister was granted the power to enter into secret agreements with oil and gas companies without the approval of Cabinet. I felt it was important important to see whether the Minister would agree to not undertake such agreements.
Below I reproduce the video and text of the exchange as well as a copy of our accompanying press release.
A. Weaver: I think I’m living in some kind of a fantasy world here in question period today. It’s quite remarkable.
To entice LNG projects to British Columbia in 2014, the previous government promised proponents electricity rates of 8.3 cents per kilowatt hour, but that wasn’t good enough. So two years later, they dropped the rate to 5.4 cents per kilowatt hour.
Now, we know the actual cost of power from Site C, if the government continues with this project. It will be over ten cents a kilowatt hour, while residential customers today are paying 8.6 cents at tier 1 and 12.9 cents per kilowatt hour at tier 2.
Not only are residential customers paying nearly twice what hypothetical LNG companies would pay, they’re also financing Site C to provide electricity to a nonexistent industry through a business model that will lose about five cents for every kilowatt hour of energy produced. That’s B.C. Liberal economics for you. Fortunately, for the members of that party, they have one leadership candidate who hasn’t run on their abysmal economic record.
My question to the Minister of Energy, Mines…
Mr. Speaker: Members, we shall hear the question, please.
A. Weaver: My question to the Minister of Energy Mines and Petroleum Resources is this. Will government admit that the only reason to continue with the construction of Site C is to provide ratepayer-subsidized power to a nonexistent LNG industry?
Hon. M. Mungall: Thank you to the member for the question. He is aware of the process that is undergoing right now. We’ve just completed the B.C. Utilities Commission review of Site C. That report was delivered just a week ago, and this government has announced that we are now moving into our analysis, and then we’ll be doing proper deliberations.
Next week myself and the Minister of Indigenous Relations and Reconciliation are actually going to be formally consulting with Indigenous communities and First Nations leaders who are directly impacted by Site C. Saying anything at present about future decision-making would likely prejudge that, and I’m just not going to be doing that.
A. Weaver: The previous government did everything industry asked them to make their LNG dreams a reality. “Jump.” “How high? How often? Where to? How many times?” They wanted to deliver unicorns to each and every one of our backyards, and when they couldn’t squeeze water from a stone, they tried desperately to squeeze even harder.
They even changed the natural gas royalty legislation so that the minister could negotiate sweetheart deals in secret. They signed a deal with Progress Energy.
Mr. Speaker: Members.
A. Weaver: They signed a deal with Progress Energy and its partners that would have locked in low royalty rates for years and cost B.C. millions. But that contract had an escape valve. One of its conditions was a positive final investment on Pacific Northwest LNG by June of 2017. Yet Petronas decided to kill the project.
My question to the Minister of Energy Mines and Petroleum Resources is this. When will the government stand up for the people of B.C., demand a fair price for our natural gas assets and terminate the long-term royalty agreement with Progress Energy? And will the minister confirm, for the record, that this government will not negotiate royalty agreements in secret with any other gas companies?
Hon. M. Mungall: I think there’s no doubt that anybody on this side of the House would agree with the member that the previous government made large promises and absolutely failed to deliver on those promises. I think we’ve canvassed a few of those: the jobs with LNG, the LNG prosperity fund, the “Debt-free B.C.” Families first, as well.
That being said, moving forward, we have committed to work with industry but also to make sure that our regulatory oversight bodies are doing their due diligence, as well, and that they have the resources to do so. On this side of the House, we want to make sure that government is working for all British Columbians and that we’re all together building a better B.C.
November 8, 2017
For immediate release
Site C, Hydro finances demonstrate need to reverse trend of failed Liberal economic management: Weaver
VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, is calling for an overhaul of BC’s approach to the energy file. Weaver says that the politicization of energy has got in the way of sound fiscal management and evidence-based policies that would protect ratepayers and allow BC to become a leader in alternative energy.
“Energy has been treated like a political tool in this province, depriving British Columbians of the leadership and sound fiscal management they deserve from their government,” said Weaver.
“Today, the NDP announced that they are freezing Hydro rates. B.C. Hydro is in a dire financial position due to the utter failure of the B.C. Liberals to responsibly manage our finances. They raided B.C. Hydro of more than half a billion dollars in dividends last year alone. ICBC is facing a similar financial mess for the same reason.
“Since the Liberals used LNG as a Hail Mary pass to clinch the 2013 election, they have been hell-bent on developing an industry that was never going to materialize. Due to Liberal enticements to LNG companies, British Columbians pay nearly twice as much as hypothetical LNG companies for their Hydro.
“Site C is yet another piece of this disturbing puzzle – it is billions of dollars over budget and was pushed through without proper oversight by BCUC to satisfy the LNG pipedream. BCUC, an independent body whose purpose is to protect ratepayers, was blocked from doing its job because of the Liberals’ blind pursuit to get to yes at any cost.
“The NDP is at a crossroads. They can continue down this path of reckless Liberal fiscal management, or they can keep their promise to be better. While I’m glad they’re reviewing BC Hydro, there are concrete steps they can take to reverse the trend of energy policy being used as a political tool. They can and should cancel the Long Term Royalty Agreement with Progress Energy, who, by the way, is responsible for the two largest unregulated dams in North Eastern BC. They can, and should stop the pilfering of BC Hydro by requiring dividends that, if not stopped, will amount to $2.8 billion by 2020.
“We cannot keep making political decisions while saddling future generations with debt. If the NDP truly want to make life more affordable, freezing hydro rates without developing an energy strategy – which will simply saddle our children with these costs – is not the solution. We have a generational opportunity to use this minority government to chart a new path for BC, one that takes us away from the BC Liberals fiscal mismanagement. It will require us to think big and to take bold action, but that is exactly what British Columbians deserve from their leaders.”
Jillian Oliver, Press Secretary
+1 778-650-0597 | firstname.lastname@example.org
Yesterday during budget estimate debates I took the opportunity to question the Minister of Energy, Mines and Petroleum Resources on a number of topics involving clean energy projects, the Columbia River Treaty Entitlement and the folly of proceeding with Site C.
The line of questioning was designed to get the Minister to recognize that continuing to construct Site C is a fiscally reckless way forward. My questioning culminated with me asking the Minister directly:
Why are you not making a decision today to terminate Site C?
I was not very impressed with the responses I received.
A. Weaver: I have a series of very short questions on the Columbia River entitlement. My first question is: how much power is British Columbia entitled to under the Columbia River entitlement?
Hon. M. Mungall: The Columbia River treaty is under the purview of the Minister for Children and Family Development. It’s not under this ministry, unfortunately.
A. Weaver: This line of questioning is very germane to the topic at hand. I would suggest the minister should be able to answer this question, because the amount of power that British Columbia is able to get under the Columbia River entitlement is exactly the same, almost precisely the same as the amount that Site C would provide.
My question, then, to the minister is: how much is British Columbia getting, on average, from electricity sold to the U.S. spot market that could otherwise come to B.C. under the Columbia River entitlement?
Hon. M. Mungall: It’s $125 million at current market prices.
A. Weaver: What does that translate to in terms of per kilowatt hour or per megawatt hour, in terms of costs, that is being sold?
I didn’t mean this question to take so long. It was almost a rhetorical question, because the answer is about $40 per megawatt hour, and that calculation is done very, very quickly.
The reason why I wanted to ask that question is I would have hoped that the minister would be on top of this file. Because $40 per megawatt hour is less than half what the projected future cost…. The revenues being brought to the province are $127 million a year. Why is B.C. Hydro not considering power available under the Columbia River entitlement to meet this hypothetical demand in either the low or medium forecast?
Hon. M. Mungall: Sorry I was taking so long. There’s no need to be antagonistic. I was just trying to get some further information to provide to the member in reference to his question. He doesn’t want that, so okay.
The reason why B.C. Hydro isn’t looking at the Columbia River entitlement is partly that the Columbia River treaty is up for renegotiation. I would hope the member would know that. As a Columbia Basin resident, it’s one of the things that we’ve been working on since well before 2014, the first opportunity to give notice for renegotiation because the treaty comes to an end at 2024. It’s one of the reasons we’re not able to ensure that it’s with any certainty.
I see the member for Kootenay East. He will know this as well. Any Kootenay MLA will know this and know what’s going on presently with the Columbia River treaty.
A. Weaver: Frankly, I find that answer quite remarkable. Of course I’m aware about the Columbia River treaty, and Site C is not to be built any time before 2024…. I mean, it will be 2021 before that’s built. The reality is that there is power available today, firm power to the amount available for Site C for any interim costs.
My follow-up question to the minister is this. Why is it that we have about 170 megawatts — or 117, I believe it is — in the standing offer program that’s gone through and there’s no call for power? Why is it that B.C. Hydro did not put a call out for power at ten cents a kilowatt hour and take, accepting those applications in the standing offer program…? Because we know that the price of Site C, as noticed by the BCUC and the ongoing tension cracks that we’re seeing, is going to come in higher than that. Why was no call for power at ten cents per kilowatt hour issued?
Hon. M. Mungall: First, the standing offer program and calls for power were different types of programs.
The call for power — B.C. Hydro did calls for power in 2003, 2006, 2008. After the last one, the recommendation to the previous government was to go forward with Site C rather than another call for power. Their rationale, at the time, was that B.C. needed more firm power, not more intermittent power and that intermittent power was being generated at a higher cost than what B.C. Hydro felt they could do in terms of constructing Site C.
That’s the reason why there hasn’t been a call for power since then. The member will note this government took action in terms of bringing Site C to the B.C. Utilities Commission, as that decision to move forward without a review by the B.C. Utilities Commission was done by the previous government, not ours.
A. Weaver: I correct my previous statement. There are 137 megawatts in the standing offer program ready to go, including 15 megawatts of an amazing solar facility by Rocky Mountain Solar in the Cranbrook area ready to go — on private land, with support of the local community, transmission lines through the property, ready to go, scalable to 50 megawatts. Give them a price. They’ll deliver. We have examples of pump storage on Vancouver Island and in the Kootenays as well, ready to go, but again, B.C. Hydro is not bringing them into the fold.
So my question to the minister is this. In light of the fact that we have the BCUC, why are you not making a decision today to terminate Site C? For four years now, the B.C. Greens have pointed out the fiscal folly of moving down this path solely to deliver to below-market contracts that were signed with LNG proponents that have left British Columbia. Why, based on all the evidence, are we kicking the can down the road until December when a decision could have been made in May, it could have been made in June, it could have been made in September, and it could be made today?
Hon. M. Mungall: I just wanted to ask my staff a quick question. The member brought up pump storage, and I interpreted that to mean pump storage that is active in the Kootenays, and that was something I wasn’t aware of going on. The reason why I wasn’t aware of it is because it’s actually not taking place in the Kootenays. There may be proposals that are currently being developed by some entrepreneurial individuals, but in terms of it actually existing right now, it doesn’t. So I was just curious about that.
To answer the member’s question about why a decision isn’t being made today, why a decision wasn’t being made in May or in June. I think looking back in terms of what has happened over the summer…. The member was very active in it, so I think he knows the answer to those particular timelines.
In terms of today, well, we’ve been very clear with our process. We’ve sent things to the B.C. Utilities Commission, as we committed to the electorate that we would do, as we committed that we would do in our supply agreement with the member and other members of the Green Party. That process has now finalized in terms of the BCUC’s report on November 1. And as we’ve said, to answer the member’s question, we have to do our due diligence. We have to provide appropriate analysis of the B.C. Utilities Commission report. We have to do that due diligence, and we have to take the time appropriate to do so, and so we are doing that.
That being said, we also recognize that there is a lot of uncertainty for people. I mean, I can absolutely empathize with people in the north. I know that members opposite in the B.C. Liberal caucus are representing their interests very well in terms of wanting to make sure that a decision is done in a timely manner, and that’s why we’ve committed to doing that by the end of this calendar year.
Yesterday during budget estimate debates I took the opportunity to question the Minister of Energy, Mines and Petroleum Resources on her plans for rolling out EV charging infrastructure in British Columbia.
As I mention in the discussion, reproduced in video and text below, the single biggest barrier in BC to the widespread installation of EV charging stations is the inability for anyone to charge for the electricity unless they are a registered utility. Those who install charging stations must give away the electricity for free. BC Hydro has installed only 30 (I’m serious ONLY 30) DC fast chargers throughout British Columbia! At these stations users presently pay 35 cents per kilowatt hour with a minimum of $2.00 per charge session.
Given that transportation is responsible for 40% of household greenhouse gas emissions in British Columbia, and given the growing uptake of electric vehicles provincially, nationally and internationally, it’s about time we work with industry to allow for charging stations to be installed throughout BC without relying on BC Hydro and public subsidizes.
A. Weaver: I have a couple of questions — I believe it’s within the mandate of the staff that you have present — with respect to electrical vehicle infrastructure. The questions are as follows. First off, what are the minister’s plans in terms of building out the electrical vehicle charging infrastructure in this province?
Hon. M. Mungall: Thank you to the member for the question. I’m actually really excited about the potential electric vehicles have in our future. How do we get there? Of course, the infrastructure for charging stations is really important, so I’m glad the member brought this up.
He’ll take note that there is $40 million in this year’s budget, over the next three years, to invest in the electric vehicle program, and $7 million of that is specifically earmarked for infrastructure, so for those charging stations.
We’re partnering with other utilities — B.C. Hydro being one of them, but others utilities like Columbia Power Corporation, FortisBC and local governments — to increase that overall $7 million and make those dollars go even further so that we can get more charging stations all across the province.
I’ll just let the member know, as well, that B.C. Hydro currently owns and operates 30 electric vehicle fast-charging stations. They have 29 more slated for construction. To accomplish that, they are partnering with FortisBC; with the province, as well, as I mentioned; Natural Resources Canada; and site hosts. So for example, you pull up to the Canadian Tire, and you see a B.C. Hydro fast-charging station. Well, that’s a result of that partnership.
A. Weaver: I do appreciate there being the high-voltage DC chargers that B.C. Hydro has done. Unfortunately, those chargers are not maintained by B.C. Hydro, and it is not uncommon to pull up to such a charging station and, actually, to have it inoperable.
My next question is: to what extent is B.C. Hydro planning to actually ensure that these high-voltage DC charging stations are in operation and are not going to go down on an ongoing basis? For example, Duncan was down for a couple of weeks. We also have one in the Interior where the executive director of the New Car Dealers Association was trapped with a Bolt that could not charge because the HVDC was down. Nobody told anyone about it.
The question is: to what extent is B.C. Hydro going to invest money to ensure, in the ones that they operate in collaboration with Greenlots, that these are actually in operation on an ongoing basis?
Hon. M. Mungall: It’s a new technology, as the member well knows. As we install these new technologies, we’re learning a lot in terms of how we do maintenance. That’s why B.C. Hydro has a program where they are ensuring that they’re doing their best in terms of maintenance. Also, what are they learning in terms of how this infrastructure rolls out and how it’s built?
Part of that $40 million that I talked about earlier, that $40 million envelope…. Well, $1.5 million is going to job training and public outreach and program analysis. For example, when we have these types of issues with the infrastructure around charging stations, we’re able to learn from it very quickly. We’re able to train people so that they’re able to maintain it appropriately and on time.
I appreciate that being out of a charging station for two weeks is excessive, and I’m sorry to hear that that happened. But moving forward, we’re definitely looking to learn from those lessons and ensure that we’re doing a better job.
A. Weaver: I would argue that the single biggest barrier to the introduction of electric vehicles in the province of British Columbia is, in fact, B.C. Hydro. In British Columbia, if you want to install a charging station, you simply cannot charge for power. B.C. Hydro and other utilities are the sole organizations that are able to charge a consumer for power. If you go to a gas station and you fill up with gas, you pay the gas station for the amount you wish to fill up.
We don’t need a public subsidy for the introduction of electric-vehicle-charging stations if malls, individuals and companies were actually allowed to install, in partnership with companies, and charge users for the ability to consume the power they do. That’s not possible in British Columbia, and that is the single biggest barrier for our introduction of electric-vehicle-charging stations.
My question is: to what extent is she exploring, as part of these measures, and looking at changing the requirement to be a registered utility in order to charge for electricity to use in your car? And to what extent can that be done through consultation with BCUC?
Hon. M. Mungall: B.C. Hydro is not the barrier that the member is talking about. In fact, B.C. Hydro is looking to partner with private businesses and individuals and is looking to see that infrastructure expanded. What is the barrier? There is one, and the member is right to identify it. It’s actually in the act with the B.C. Utilities Commission.
Responding to that, the ministry is working with BCUC on ways to address this barrier, on ways to allow private businesses to own charging stations and to flow through the charge of power that they would be purchasing. They’d also have a sound business model. They would be able to charge for the parking, for example, while somebody is charging their car while, maybe, they’re shopping at Canadian Tire. I obviously have a particular love for Canadian Tire because I keep bringing it up.
The point is that we do recognize that there are some barriers, and we are working on them.
A. Weaver: I do wish to acknowledge, I believe, the Chair, who showed leadership, which is what I’m arguing is needed here, through the actual installation of electric-vehicle-charging stations here at the Legislature. Unfortunately, the Legislature must subsidize the paying for that. The Legislature cannot allow, even though all of these are set up for swiping a credit card, for me to pay for my electricity or the Minister of Environment to pay for his electricity.
I come back to the issue. B.C. Hydro is the barrier to innovation. Twenty-nine charging stations across British Columbia, high-voltage DC, is hardly innovative when we have some down for weeks. This is not new technology. This is technology that is widespread and is in production around the world.
B.C. has the highest uptake of new electric vehicles in Canada. Four percent of new cars are electric cars in British Columbia, not too dissimilar from what California does with their own ZEV standard, yet we do not meet the infrastructure. The barrier is actually a proactive, innovative way of looking forward as to what’s happening in the future.
Coming back to the question then. Will the minister commit to actually work with industry — not with B.C. Hydro — to ensure that there’s a means and ways for industry to use their capital to install charging infrastructure, to allow electric vehicle users to swipe a credit card to pay for power that they want to pay for so that people will have incentive to install them, rather than requiring schools and hospitals and municipal halls and the Legislature and malls to pay for that?
Charging for parking does not work, because it is patently unfair unless you charge everyone for parking. You pay for the energy you use. Again, coming back to that. Will the minister work with industry — not with B.C. Hydro — to ensure that these can be installed in British Columbia like they can in most jurisdictions in the world?
Hon. M. Mungall: As I said, the ministry is already working with industry and being a mediator between industry and B.C. Utilities Commission on this very issue.
The member did ask that we not work with B.C. Hydro. Obviously, we will be working with our Crown corporation on this issue as well.
Today in the legislature, Shirley Bond, the MLA for Prince George-Valemont and I quizzed the Minister of Energy, Mines and Petroleum Resources about the delays involving approval of a permit expansion for Borealis GeoPower.
As I have discussed numerous times in the past, British Columbia is the only jurisdiction throughout the entire Pacific Rim that isn’t using its geothermal resources. As noted in a 2014 Canadian Geothermal Energy Association (CanGEA) report,
Below I reproduce both the text and video of the exchange between Shirley Bond, Michelle Mungall and me. As you will see from the discussion, I was troubled by some of the responses we received from the Minister. Nevertheless, the overall conversation was generally positive and bodes well for the future of this particular geothermal energy project.
S. Bond: I’d like to spend a couple of minutes talking about a project that is incredibly important when we’re talking about clean energy in British Columbia.
I’m wondering if the minister can give me a sense of her understanding and the status of the project that’s being suggested by Borealis GeoPower.
Hon. M. Mungall: To the member, I know that she is very interested in this project. It’s in her region. And I’ve been fully briefed on it by staff.
We’re very supportive of this project. I think it poses some pretty interesting opportunities. So far to date, in terms of geothermal production, which is what Borealis is, there hasn’t been any exploration that has proved up to be viable, but Borealis is doing that exploration. They’re confident that they can actually prove a viable geothermal source, and so we’re very supportive of them doing that work.
S. Bond: Thank you very much to the minister for her response. I appreciate that.
Certainly, in my riding, and particularly in Valemount and other parts of the region, the opportunity to diversify the economy is absolutely essential. One of the things that’s critical to that is a secure supply of power, because it’s very hard to attract industry and others if you can’t guarantee them a stable source of power. And there has been ongoing and…. I admit, over my 16 years as the MLA for this area, secure and stable power has been a significant issue.
So looking to diversify the economy, looking to create jobs — not a big number, but in our riding, you know, even one new job matters. So this project being proposed by Borealis GeoPower is a geothermal project. I have, certainly, over the course of a number of ministers, talked about the importance of looking at the portfolio, including alternative energy sources like geothermal.
The concern I have is that there continues to be a need for a permit expansion on the Canoe Reach geothermal project. I know that the proponents have been here. I have actually met with the leader of the Green Party about this project. And apparently, the permit is sitting somewhere waiting for approval.
Can the minister perhaps explain to us if and when that permit for expansion may be approved?
Hon. M. Mungall: As I said earlier in my response, our ministry is supportive of the project. We see a lot of potential. We’re excited about the opportunity for geothermal to potentially be proved up in this province. To date, it has yet to be done. We’re glad that Borealis is looking to do the work.
The ministry is actively engaged with them and is working with them throughout that permitting process. As the minister knows, there are statutory decision-makers involved in those stages. So my understanding at this point is that their applications are under consideration, and they are actively working with the ministry, and the ministry is actively working with them.
S. Bond: I appreciate that answer. I just don’t feel overly encouraged by it.
I appreciate the support for the potential of the project.
I think it is essential, as we’re having a major discussion in our province about clean energy, particularly in a region of the province that really needs to be able to diversify their economy.
I just want to walk through some of the…. I’m the first to admit that this permit was provided to the previous government — us, basically. This is not a short-term issue. In fact, the initial feedback about this application was provided in February of 2017. That was nine months after the original request from the Ministry of Energy, Mines — where it was stated that the ministry had completed the pre-tenure referral process. However, they were waiting, at that time, for the development of regulations. That wasn’t completed. The writ period came, the election came, and the new cabinet wasn’t formed until July 18.
This company, which is working very hard to…. It is one of the projects where I’ve seen significant support in my region, where people have stepped up and said: “This is something that we would like to see happen.” The delay has continued. The last information that certainly the company received was that the permit request was “with cabinet operations and the minister.”
It sounds to me like the permit is ready to be signed. I’m wondering if the minister can at least agree today that the ministry will look at where the permit request is and when it will be signed.
Hon. M. Mungall: I appreciate that Borealis and the member for the region would like to see this moving forward in a timely manner. I heard her comment about the length of time it already took under her government, that there was a nine-month time frame. If she’s wondering if, in the last four months, we’re moving at a more speedy pace, I can say yes.
A. Weaver: I’d like to follow up on the questioning from the member for Prince George–Valemount on this issue of Borealis. I, too, have met — with the member for Prince George–Valemount — several times with the proponents of this project. My understanding is identical to the former minister’s understanding, in that the permit is actually in the OIC process, waiting for signature.
My question would basically repeat, initially, the question made by the member: will the minister commit to actually looking, in terms of what’s in the queue in the OIC approval process, to determine whether or not she can expedite the signing of this permit? It is — I believe, as the member does — in her jurisdiction, not in the jurisdiction of a statutory decision-maker.
Hon. M. Mungall: I should let the member know that, due to the oath that I signed, I’m not at liberty to discuss cabinet agendas.
A. Weaver: I accept that as an answer. I do bring it to notice, though, as the member opposite did, that the answer that we did receive was one that, I would argue, is not the relevant answer, because permitting is not before a statutory decision-maker. It is before cabinet as we speak, in my understanding.
I’m coming to a question, then. This particular project, this Borealis project, is the at the end of a transmission line in a community, Valemount, that’s subject to brownouts already, at the same time as there’s an approval process for the development of a major ski resort, Glacier Destinations.
This is a community where the Simpcw Nation wants this to happen. Valemount wants this to happen. The company wants to develop. The holdup is primarily, almost exclusively, in the minister’s office. Will the minister commit to actually looking at this project so that we don’t lose yet another investment — not of taxpayer money but investor money — in a community that’s dying to get this forward?
Hon. M. Mungall: I’m glad that we have members from both of the opposition parties — the official opposition and the Green Party as well — who are supportive of this project. As I mentioned to the member for Prince George–Valemount, government is very supportive of this project. We have to do our due diligence. That’s government job, as a regulatory body. I believe members of the Green Party were just asking questions in question period to that effect — that government has a job to do in terms of a regulatory function. We are doing that.
The Borealis project — as I’m very happy to see that members from all sides of the House agree — is a positive project and a good opportunity for British Columbia, if they are able to prove up any exploration that they’re able to do of the geothermal resource. As I mentioned, there has been past exploration of geothermal resources in B.C. that have not been able to prove up a sufficient resource to generate electricity. We’re hoping that that may change with Borealis.
That being said, as I’ve said to members already, I cannot discuss cabinet agendas, but the due diligence around this project has been done. Our ministry, our government, is very supportive of it, and we look forward to continue working with them into the future.
A. Weaver: I’m surprised that the minister would suggest that exploration has been done in geothermal that has not proven up a resource when B.C. Hydro has done precisely no exploration on geothermal and companies associated with the Canadian Geothermal Energy Association have done exploration to say that we have an enormous potential. In fact, we are only the jurisdiction in the Pacific Rim that does not have a geothermal capacity — not because we don’t have it but because there has been no will to develop it.
I come back to this issue of Valemount. Valemount is at the end of a transmission line, a transmission line that leaves Valemount to brownouts all the time in the winter. B.C. Hydro has to upgrade that transmission line, and there’s a massive capital cost involved in doing that. B.C. Hydro produces power, is the sole purchaser of power and also is responsible for the development of transmission of power.
My question to the minister is: how does she ensure that the transmission component of B.C. Hydro actually talks with the part of B.C. Hydro that purchases power so that they recognize that the cost benefit of developing up transmission line power is there to avoid the unnecessary expense of capital to upgrade transmission lines? If you upgrade the power at the end point, you don’t need to bring up the transmission line to give more power to the end point. Will she commit to ensure that B.C. Hydro starts to talk between the different branches so that the actual full capital cost of moving forward is recognized when this is done?
Hon. M. Mungall: I just want to address something that the member said before I get to the actual answer of the question. The member said that B.C. Hydro had never done any exploration of geothermal. That is actually not the case. Let me take this opportunity to make sure he is aware of what happened in the 1980s.
B.C. Hydro actually explored a site at Mount Meager, as part of the federal geothermal program that existed in the 1970s and 1980s. They drilled dozens of holes to understand the temperature at that location. They drilled three production wells to attempt to find commercial resource. Unfortunately, they had no commercial success.
They spent about $25 million doing this activity, and the result was that there was just not enough steam or water to move into full electrical production. So I just wanted to make sure the member was aware that, actually, that work has been done by B.C. Hydro. I should also mention that further work has been attempted since then in that site, but yet with the same result.
In terms of the transmission that the member asked about, everyone is in agreement. Whether it’s B.C. Hydro or whether it’s the ministry, we all agree that there are definite benefits and reliability to the transmission site should Borealis be successful and be able to prove up this resource.
Again, I feel like there’s a little bit of a characterization from members opposite that somehow this government isn’t supportive of the Borealis project when in fact we actually are. I’m very pleased to see that that support is shared by all parties in the House.
A. Weaver: I’m sorry, my last question. I just to want to comment on the statement about Mount Meager.
Mount Meager was done in the 1980s — one location. There has been an entire report published by the Canadian Geothermal Energy Association in 2014 outlining the myriad places in British Columbia where geothermal capacity exists. To suggest that one study by B.C. Hydro in the 1980s represents a feasibility analysis in British Columbia is misleading. B.C. Hydro has not taken the proactive steps to explore geothermal capacity in British Columbia.
I reiterate. We are the only jurisdiction in the Pacific Rim that has no geothermal capacity — none — and it’s because B.C. Hydro builds dams. That’s what they do. In fact, they’re not actually tasked in their mandate to build geothermal, so why would we expect them to explore it?
I would suggest…. I do appreciate that the minister is supportive of this, but I think it’s important that the minister not dismiss the fact that B.C. Hydro has not explored British Columbia for geothermal capacity. It’s not me saying that. It’s the National Energy Board review of the Site C project that’s said that. It’s the Canadian Geothermal Energy Association report in 2014 that’s said that. It’s submissions to the BCUC process now that said it. So I would suggest the minister recognize that B.C. Hydro has not done exploration of geothermal in B.C. Experts across British Columbia and across North America have said exactly that as well.
S. Bond: Apparently, the minister didn’t feel there was a question there, so I’ll provide another one.
It’s like we have a raging agreement going on in this Legislature. It’s not about divulging cabinet secrets about the agenda, it’s about asking for reasonable explanation to these proponents about when they can expect the permit for expansion to be signed.
It’s a simple question. Can the minister or her staff provide us with some sense…? You know, this proponent and this community…. I appreciate the comments made by the leader of the Green Party. This matters a lot. This has taken enormous consultation. It is a community that is in agreement with this. The minister has said she supports the project. When can we expect to see the signed permit?
Hon. M. Mungall: As I’ve said before, we appreciate the value of this project to the region. We appreciate the opportunity it has to provide for British Columbia, for Prince George–Valemount in particular. That being said….
I appreciate that the member opposite would like a conclusive answer today. She knows the process of estimates. If I was able to provide that, I would have.
I’m not able to provide that for her today, but I will commit that we are working on it in a timely fashion. It’s unfortunate that her government was not able to approve it in such a way. We, however, will be doing that.
S. Bond: I just want to quote from a note that said “we have heard back from a staff member in the ministry on October 13, who said the permit request was with cabinet operations and the minister.” I hardly think that that is timely. We’re well into November now. It’s just a matter of actually sorting out who is going to advocate for that permit to be signed to get the matter completed.
My final question relates to B.C. Hydro. I understand that in a conversation with the BCUC, they are suggesting that B.C. Hydro partner with industry to develop geothermal projects. I’m not sure if the minister is aware of that. If she is, can she also tell me whether or not she has had a conversation with the minister who is responsible for Columbia Power Corp and the Columbia Basin Trust to talk about whether or not the Columbia Power Corp could be included in a discussion about a partnership of that nature?
Hon. M. Mungall: So first off, I just want to state for the record that B.C. Hydro is interested in geothermal and proved-up sources and working with companies like Borealis, should they be successful.
The member’s question was whether I’ve spoken with the Minister of Children and Families, who is also responsible for the Columbia Power Corporation. My understanding is probably coming from a letter she would have received from Borealis. Borealis was looking for funding, is my understanding, from Columbia Basin Trust and perhaps maybe a partnership, is my guess perhaps, with the Columbia Power Corporation in terms of moving forward and seeking some financial support. That is not within my ministry.
To her question of if I’ve had an opportunity to meet with the minister responsible for CBT and CPC, I have not yet to date.
S. Bond: Thank you very much for the opportunity to ask these questions.
As we’ve heard in this House today, Valemount has either the most power outages in the entire B.C. Hydro grid system or is at least one of the communities that has the most.
There is an opportunity with a geothermal project in the Robson Valley to actually do some very significant things, which actually has important trickle-down effects. Growing the economy — hard to do if you can’t say there is a secure and stable power source.
Certainly, as we’ve reviewed this file and met with Borealis, in the community and numerous times here in Victoria, what’s standing between getting to drill on the land and move toward operations is an outstanding geothermal permit.
I would simply urge the minister to advocate on behalf of this — getting the permit signed and getting on with what is an essential opportunity to look at alternative sources of energy in a part of the province that needs them significantly.