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The Clean Energy Act
Upgrades to infrastructure may do plenty to meet a growing demand for electricity. But the fact is, in a number of very expensive cases, BC Hydro need not justify those upgrades to anyone but itself.
That's thanks to the Clean Energy Act, which was passed by the provincial government on June 3, 2010. It's a policy that the provincial government introduced with much fanfare, saying it would set a foundation for "electricity self-sufficiency, job creation and reduced greenhouse gas emissions."
Then-Premier Gordon Campbell pledged that the Act would "maximize the value" of Heritage Assets like the Revelstoke and Ruskin Dams and keep rates "competitive" while making British Columbia a leader in the development of green energy.
The Act sets out 16 objectives, including the achievement of "electricity self-sufficiency," which means that by the year 2016, BC Hydro must have enough electricity that meets any demand figures cited in a rate application.
Electricity self-sufficiency also means that BC Hydro must acquire by the year 2020 the rights to 3,000 GWh of electricity, in addition to its energy needs by 2016. That could come through construction of a new dam such as the Site C project or purchasing more electricity from independent power producers. Nuclear power is outlawed as an option for meeting those obligations.
The Act also exempts a swath of projects from oversight by the Utilities Commission. (See lists at bottom)
With the Clean Energy Act in place, at least $7.423 billion worth of capital projects will not have to face an oversight process through the commission. That's over $7 billion in spending that BC Hydro need not justify to anyone but itself.
That includes the $930 million Smart Metering and Infrastructure Program; the $404 million Northwest Transmission Line; and any projects extended agreements under the 2009 Clean Power Call. The public can't be certain that any of that spending is necessary.
The Act also narrows, to a large degree, the Utilities Commission's ability to limit a rate increase. It states that rates must permit BC Hydro to collect "sufficient revenue" in a fiscal year that will allow it to achieve "electricity self-sufficiency."
Former Energy Minister Bill Bennett spoke eloquently about the Clean Energy Act at the Union of British Columbia Municipalities (UBCM) in Whistler last year. He called the Act one of the "most important" pieces of legislation passed in the decade that the BC Liberals have spent in government, adding it would guide economic activity in the province for years to come.