B.C.'s electricity exports to U.S. jumped 128% last year

By Fiona Anderson
Vancouver Sun
29-Mar-2006

The value of B.C. exports of electricity to the United States jumped 128 per cent in 2005, caused by rising prices and increasing demand, a report released by the provincial government said.

"After a slow start early in the year, B.C. exports of electricity surged in the second half of 2005 to their highest levels since the energy crisis that hit California back in 2000 and 2001," the report by BC Stats said.

Prices were already higher in the early part of 2005, but after hurricanes Katrina and Rita wreaked havoc on energy supplies, prices for all types of energy, including electricity, soared, the report said. In addition, a shortage of natural gas used by some power companies to generate electricity limited U.S. supply and increased demand for B.C. exports.

While the value of exports were almost 90 per cent greater than the value of imports, the actual amount of electricity shipped south was only 7.8 million megawatt hours, compared to imports of 5.9 million megawatt hours, said the report's author Dan Schrier. The discrepancy between amount and value arises from the ability of B.C.'s largest producer of electricity -- BC Hydro -- to arbitrage, he said.

BC Hydro, through its trading subsidiary Powerex, does that by buying electricity at off-peak hours, such as the middle of the night when prices are low, and selling it back at peak times when prices are higher, Hydro spokesperson Elisha Moreno said in an interview.

"A perfect example is that California uses outrageous amounts of electricity to fuel their air-conditioners in the summer," Moreno said. "So during the summer time, we can take full advantage of having that ability to trade into the States, and because supply and demand are constrained and they need energy, the price goes up."

In 2005, Powerex saw the value of its exports to the United States increase 152 per cent year-over-year, due to increased prices and volume, Moreno said.

In the last quarter of 2005, prices reached $98 per megawatt hour, a 58-per-cent increase over the price a year earlier, BC Hydro's third quarter report said.

But prices will never be as high as they were during the California crisis, when they reached "upward of thousands of dollars a megawatt hour," Moreno said.

fionaanderson@png.canwest.com