LTAP: Government mulls response to B.C. Hydro ruling

Sam Cooper
Victoria Times Colonist
July 30, 2009

B.C. Utilities Commission decision shoots down independent power

B.C.'s energy minister says the government is preparing a swift response that could include a legal challenge to the B.C. Utilities Commission's bombshell ruling against B.C. Hydro's massive call for clean energy.

This week, the BCUC refused to endorse B.C. Hydro's long-term call for 3,000 gigawatts of power from public and independent power producers because it was not "in the public interest."

Energy Minister Blair Lekstrom said he was surprised by the ruling. "It flies in the face of our agenda to reduce greenhouse gas emissions."

After the ruling, IPP investors have run for the exits, leaving a budding industry valued at up to $14 billion after the May 12 B.C. election with a dubious future, according to some analysts.

Plutonic Power Corporation, which has a pending $4-billion, 1,027-megawatt proposal on the Bute Inlet north of Powell River, saw its share price drop from $4 to less than $3 following the BCUC decision.

Company representative Elisha McCallum said Plutonic will not comment on its business prospects until the government and B.C. Hydro respond to the BCUC ruling.

NaiKun Wind CEO Paul Taylor, former head of ICBC, said IPP investors are worried.

"You just have to look at ours and [Plutonic Power Corporation's] stock price," he said.

"Investors are concerned and trying to understand what [the ruling] means."

Taylor said his company had lobbied the BCUC to approve B.C. Hydro's blanket call for power.

Naikun was one of about 60 bidding for contracts in the November 2008 call, and can still apply under a different process, he said.

"I found the ruling confusing," Taylor said. "It's totally in conflict with the government's clean-energy policy."

Lekstrom said there is a lot of concern from IPPs wondering if the government's plans will change with the BCUC ruling, but he insists it's full steam ahead.

"We are committed to our clean-energy industry and our climate action and energy plans," he said.

B.C. Hydro says it will return to the BCUC with a revised long-term acquisition plan.

NDP energy critic John Horgan said the BCUC ruling is a rebuke to Premier Gordon Campbell and his power privatization plans, and a victory for ratepayers.

The BCUC shot down government claims that the province needs more power, Horgan told Canwest News Service.

Horgan said power purchased from independent power producers would cost up to twice as much as B.C. Hydro energy, sending ratepayer bills through the roof.

"The government has been saying we have this crisis; we need the IPPs or the lights will go out," Horgan said. "Thank goodness we have a regulator that protected ratepayers and stopped Premier Campbell from privatizing power in B.C."

Eric Doherty of the Wilderness Committee, an environmental group strongly opposed to run-of-river projects, said the BCUC ruling is "telling B.C.
Hydro to put more emphasis on energy conservation and less on energy generation."