A 'BC Hydra' project that just won't die

Mark Jaccard
Vancouver Sun
11-Jan-2005

Hydra was a monster in Greek mythology that Hercules had difficulty slaying because each time he severed its head, one or two replacements popped out.

For citizens resisting BC Hydro's efforts to build an electricity plant fuelled by natural gas on Vancouver Island, the company's name has changed to BC Hydra.

Last month, after four years of struggle, including major public hearings before the National Energy Board and the B.C. Utilities Commission, BC Hydro cancelled the Georgia Strait crossing, a pipeline to ship gas to its proposed generation plant at Duke Point near Nanaimo.

But opponents of the pipeline and plant had no time to celebrate because Hydro simultaneously announced an agreement to sell the site to a private company, Duke Point Power, which will build the 250-megawatt plant and sell the power back to Hydro. The plant will be fuelled by natural gas from the existing Terasen Gas pipeline across the strait.

Opponents of generating electricity by burning natural gas, which emits local air pollutants and greenhouse gases, thought they had defeated the project when they convinced the B.C. Utilities Commission to reject Hydro's proposed plant in 2003.

But Hydra's (I mean Hydro's) pet project has popped back out, so they must battle again this month before the commission in a hearing to approve Hydro's electricity purchase agreement with Duke Point Power.

Ironically, the plant may not be needed. The B.C. Transmission Corp., now a separate company from Hydro, intends to replace some of the aging undersea cables supplying the Island with higher-capacity ones.

NorskeCanada, the largest consumer of electricity on the Island, has offered to shift operation of its pulp mills so that peak electricity demand can be met until the new cables are operating in 2008.

At the same time, BC Hydro is launching a province-wide electricity planning process that could lead to rejection of any natural gas plants for a decade or more because of the fear of rising natural gas prices and B.C.'s wealth of economical, environmentally friendly alternatives. These include more efficiency from Hydro's Power Smart program, combusting wood waste from pulp mills, small hydro and wind projects, cogeneration at industrial plants and large buildings, and perhaps large hydro.

A second irony is that while the provincial government and BC Hydro talk environmental stewardship, rejecting this natural gas plant is in fact the province's lowest-cost option for reducing greenhouse gas emissions that threaten climate change.

For the past 15 years, my research group at Simon Fraser University has been estimating for government, industry and non-government organizations the cost of alternative actions to reduce greenhouse gas emissions. It doesn't get any cheaper than this. Indeed, if natural gas prices continue their upward trend, we would reduce both our electricity bills and greenhouse gas emissions by cancelling the contract in favour of our other electricity options.

How did we get into this mess? BC Hydro's natural gas strategy is a legacy of the NDP government, abetted by Glen Clark's use of Hydro for political purposes, which included removing it from utilities commission oversight.

Once real dollars are spent on site acquisition, equipment and regulatory processes, it takes effort and time to turn the ship around.

The Liberal government, led by ministers Richard Neufeld and Joyce Murray, did the right thing in putting Hydro back under regulation. The commission, led by Robert Hobbs, did the right thing in rejecting the Duke Point project in 2003.

Even Hydro, under Larry Bell and Bob Elton, is now doing the right thing in launching a major electricity planning process to get the views of customers and other stakeholders.

But in a calamity of unintended consequences, the Duke Point project has re-emerged. There are many opportunities to play Hercules, but will any of the key players show leadership?

The government can tell its Crown corporation to drop the project for environmental reasons. When in opposition, Gordon Campbell called for cabinet rejection of the Kemano Completion Project for this very reason.

BC Hydro management can cancel the contract because of the gas cost risk and in the process give some credence to all those ads lauding its environmental image.

The utilities commission can reject the electricity supply agreement because of the gas cost risks.

What can you do? You might show up at the hearing. If you don't have time, you could at least write a letter to the premier and your MLA. Their ears function quite well in the months before an election.

You might even try writing BC Hydra. But Hercules would suggest caution.

Professor Mark Jaccard is with the school of resource and environmental management at Simon Fraser University.