British Columbia power costs to increase

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Source: GLOBE Foundation

Gold medals last forever, but Olympic cheer won't withstand an energy upheaval in British Columbia.

The Canadian province and its largest city Vancouver just hosted what many are calling the greenest Olympiad ever. With its reputation as a clean, coastal metropolis where quality of life is high, few observers or visitors seemed surprised that Vancouver set up online energy monitoring, made extra efforts in energy efficiency, and even aimed for carbon neutrality throughout this winter's Olympic fortnight.

Yet this week - just a few days after Canada's gold medal wins in men's and women's hockey over their neighbors to the south - Canadians and British Columbia residents in particular must confront per-capita energy consumption that beats the USA's average.

In 2006 (the last year for which data are available), Canadians used 8,262 kilograms of oil equivalent (kgoe) per person, compared to 7,768 kgoe for each U.S. resident.

As economic conditions fluctuate - 2006 was a boom year - intake numbers will move up and down as well. Nevertheless, provincial utility BC Hydro is preparing for a future with a clear upward trend in energy appetite and rising costs for Vancouver residents.

15% in Rate Increases Loom for BC Hydro Customers

As February turned into March, BC government heads in the capital Victoria looked up every once in a while to watch their national heroes go for gold, but their attention was focused mainly on the provincial budget.

Everyone knows that the Olympics are seen by host cities and countries as a spending target unto themselves. Historically, the public spaces, transportation upgrades, and economic activity are an easy sell (not to mention every sports-minded person in the world knowing your city's name).

Across Canada, Montreal's Stade Olympique still stands, though the last race of the Montreal Olympiad was run almost 34 years ago. In Beijing, on the other hand, the famed 'Bird's Nest' where the 2008 Opening Ceremonies were held is set for demolition - the Chinese evidently aren't interested in keeping urban mementos that hold 90,000 people.

Despite the desire to bask in Vancouver's afterglow, Finance Minister Colin Hansen announced on March 2 that he wants to pump up infrastructure spending in 2010 and 2011 while cutting funding in the out years to balance the budget. Where governments can rely on taxpayers to make such spending surges happen, BC Hydro is turning to ratepayers for the influx of funds.

BC Hydro customers are looking at 15% in rate increases over the next two years and up to 33% by 2013, with a 9.26% increase taking effect as soon as April 1. That adds up to about $7 extra on everyone's monthly bill - not enough to break the bank for most - but as incremental changes go, it's a sizable one that brings questions.

Namely: 'What are we getting for the money?'

Instead of a winter sports wonderland, BC Hydro is upgrading hydroelectric facilities that are a generation old. The newest site slated for capacity expansion is the Revelstoke Dam, built way back in 1984.

The utility has already started bringing school-bus sized transformers to the generating station site, the local Revelstoke Times Review reports, and the goal is to bring new turbines online by October. Eventually, the Revelstoke buildout will add 500 MW to the nearly 2000 MW already up and running, and 40,000 additional residential customers are expected to be served by the upgrade during peak usage hours. In total, BC Hydro (whose full name BC Hydro and Power Authority, indicating a reach beyond just dam-based energy) serves 94% of the province's population centers.

Of those 1.8 million or so customers, nearly all are expected to ramp up consumption in the coming decades.

Gold for BC Hydro? Not So Fast

On its website, BC Hydro awards itself a 'gold medal' for its consistent supply of power to the Vancouver Olympics. 'By flawlessly powering the games,' they say, 'we feel we've won a gold medal, too.'

Operating 30 hydroelectric plants plus a few natural gas ones, BC Hydro did avoid outages that could have left Bob Costas in the dark. Nevertheless, its upgrade plans don't seem to include any significant changes that will accommodate significant demand increases.

'The demand for energy could grow by as much as 40 percent over the next 20 years as the economy recovers, so we have to be ready for that,' BC Hydro spokeswoman Susan Danard said in Thursday's edition of Canada's Globe and Mail national newspaper.

Canadian national net energy consumption grew from 309 billion kilowatt-hours in 1980 to 529 billion kWh in 2006 - a 71% jump. If the 40% in 20 years reckoning is correct, British Columbia electricity residents may be upping their wattage at a slower rate than the country as a whole. However, much of BC Hydro's current price pressure is due to declining non-residential consumption.

Third-quarter net income at the utility was down 50% in 2009 from 2008, as the provincial forestry market weakened and mills used less power. When the timber companies perk up, the power supply rope will tighten even more. The $7/month surcharge may seem like a small bump to avoid power shortages in the jewel of the Canadian Pacific.

If British Columbia is going to continue as a model for energy efficiency, it needs to diversify. The Canadian Wind Energy Association says that as of late last year, every Canadian province has wind energy capacity. Nationally, about a million homes can run off wind-generated power that totals 3359 MW. That represents a tenfold increase over the past six years!

By advancing beyond dam expansions, BC could help make another order of magnitude increase in Canadian clean power achievable.

Jeff Siegel is in Arizona today, but he's told me to let you know that a full report on British Columbia's top green power developer is coming your way very soon.

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