Electricity surplus costly, NDP says
VICTORIA – BC Hydro stands to lose $1 billion over the next four years by selling surplus power at a loss, NDP energy critic John Horgan said Monday.
Horgan renewed the NDP's long-standing criticism of the B.C. Liberal government's push for electricity self-sufficiency, and its requirement that all new clean energy sources be privately developed.
Long-term purchase contracts signed under that policy mean BC Hydro can expect to lose more than $1 billion by 2015, Horgan said at a news conference at the legislature. He based his calculations on documents BC Hydro released when it filed its application last week for an environmental assessment for the proposed Site C dam on the Peace River.
The environmental impact statement for the dam shows an expected surplus of 5,200 gigawatt-hours for 2013 and similar surpluses out to 2015. Horgan said the current information suggests BC Hydro will have a surplus for the next 10 years.
"We're purchasing at $94 a megawatt-hour, and we can sell it for $37 a megawatt-hour [on the spot market]," Horgan said. "The net difference being $57 per megawatt-hour for power we do not need, power that BC Hydro was forced to purchase because of aggressive B.C. Liberal energy policy."
Energy Minister Rich Coleman said Horgan is using a "snapshot" of today's low spot market and extending the same demand and prices far into the future. The province has numerous mine projects underway or seeking approval, and liquefied natural gas export proposals are proliferating in northern B.C. that are also likely to increase demand for electricity, he said.
Coleman said the North American electricity market has likely reached bottom, with the U.S. using its own cheap natural gas to generate electricity and still suffering a slow economy with low power demand.
BC Hydro's Powerex division continues to buy and sell power, using dam capacity to effectively store power and sell it when prices are higher. Coleman said Powerex stands to make $200 million this fiscal year on electricity trading.
One of B.C.'s moneymakers is wind power produced with U.S. government subsidies. Wind power can't be stored, so Powerex buys excess power at a nominal cost and uses it while storing water in BC Hydro dams.