British Columbia and Electricity

From the Telegraph Journal New Brunswick

B.C.'s bitter power lesson
Published Wednesday March 10th, 2010
What does power policy on Canada's west coast have to offer New Brunswick?

Enlarge Photo In the case of British Columbia, it's an uncomfortable vision of what the future might be like if this province continues to go it alone.

B.C.'s attempt to be self-sufficient in power production is foolhardy, because it ignores the existence of low-cost, wholesale power sources in nearby jurisdictions. The conceptual shift to thinking of energy in terms of sustainable pricing rather than Crown corporation expansion is one New Brunswickers are still dealing with, but which promises to have a profound impact on the power debate.

Like NB Power, BC Hydro is a Crown utility. Its goal is to become self-sufficient in energy production by 2016. To attain this objective, the utility will need to invest billions to maintain the infrastructure it owns today and add capacity. This will send power rates up sharply and swiftly. The utility has asked for a nine-per-cent rate increase this year; the increase over the next four years could be as much as 33 per cent.

NB Power faces comparable challenges. Within the next two to three decades, three major facilities will need to be rebuilt or replaced: the Mactaquac Dam, Belledune power plant and the Point Lepreau nuclear generating station. The cost of refurbishing Mactaquac alone is estimated at more than $2 billion. NB Power also depends heavily on fossil fuels, which means its rates will increase with global fuel prices and the imposition of carbon taxes.

There is nowhere for NB Power's rates to go but up. And while New Brunswick boasts abundant wind and high tides, the province is still a long way from realizing their value. Tidal power technology is still in development; wind power has a high price point, because of the need to fire up other power generators to compensate when the wind dies down.

Why would a provincial government undertake the higher cost and risk of expanding domestic power generation at the expense of its citizens, when low-cost, sustainable alternatives exist?

This is the question economist Martin Shaffer is asking in B.C. It is a question that the citizens of this province have been challenged to consider by the Graham government's proposed power agreement with Quebec.

There is no technology or resource in this province today that can compete with the lower cost of hydro power, and no utility in the region with ready-to-sell hydro capacity that matches Hydro-Québec's operations.

These factors won't decide the political debate, but they must be given due consideration.