Deep snow, late spring keep Hydro reservoir levels high

Utility finds itself in flexible position for electricity buying and selling

Michael Kane
Vancouver Sun
September 12, 2007

BC Hydro reservoir levels are at their fourth-highest level on record, thanks to this spring's unusually high snowpack.

That's good news for consumers, although it doesn't necessarily mean a break on rates, says Gillian Robinson, Hydro's media relations manager.

"It puts us in a good position for flexibility because we are always trying to sell available electricity when prices are high, and, of course, we buy when they are low," Robinson said in an interview. "In terms of keeping Hydro prices low, that's a great benefit to our ratepayers."

When it comes to setting rates, however, other variables come into play.

"Our peak demand season is the winter, so that will be a huge factor," Robinson said. "Also, in terms of prices, we don't know what we will have to pay if we have to import electricity during the coldest days of the winter."

Hydro is due to submit its rate requirements application for the next three years to the BC Utilities Commission early next year.

This year's high reservoir levels are due to a near-record snowpack and a delayed runoff period that stretched into July because of cooler, wet weather at the beginning of the year. The cooler weather prevented widely feared flooding during May and June.

Hydro's two largest reservoirs, the Williston on the Peace River and the Kinbasket in the Columbia region, are highly snowpack-dependent and account for 90 per cent of the publicly owned utility's energy storage.

"I don't know how full they are today, but they are very high," Robinson said. "We know that our reservoirs are at their fourth-highest level in the 47 years that we have kept records."

Since 2001, Hydro has imported an average of 13 per cent to 15 per cent of the province's annual electricity needs. That level is not expected to change in the short term, even though independent power producers now supply about 13 per cent of B.C.'s total production.

In 2004, B.C.'s last drought crisis year, there were warnings that taxpayers could spend as much as $1.1 billion on imports when reservoir levels are down.

At the time, Hydro president and CEO Bob Elton cautioned that North America's open markets for electricity regularly see winter price spikes to levels six times what it costs Hydro to produce from its Crown-owned network of hydroelectric reservoirs.

The Liberal government's energy plan calls for the province to achieve energy self-sufficiency by 2016.

While Hydro boasts the third-lowest residential electricity rates in North America, critics fear that advantage could be eroded by the government's insistence that all new energy be sourced from private power projects.

Meanwhile Metro Vancouver's Coquitlam, Capilano and Seymour drinking water reservoirs are at 69-per-cent capacity, about the mid-point of their normal range for this time of the year.

Despite a soggy summer, garden sprinkling restrictions across the former Greater Vancouver regional district will remain in effect as usual until Sept. 30, said Bill Morrell, media relations manager.