BC Hydro, Oct 6, 2011
About independent power projects
Since the 1980s, BC Hydro has been acquiring power from Independent Power Producers (IPPs) to help meet its customers' electricity needs. IPPs develop and operate power projects using sources such as wind, water, biomass and waste heat, among others. IPPs include companies that specialize in power production, municipalities, First Nations and customers, working alone or in partnership.
BC Hydro receives approximately 12,599 GWh electricity each year from IPPs. A list of current IPP supply [PDF, 37 Kb] is available.
Why does BC Hydro purchase electricity from IPPs?
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BC Hydro faces a gap between the amount of electricity that we can supply from existing resources, and the amount we'll need to meet future demands from our growing population and economy. A variety of measures are required to ensure we have sufficient, reliable power for generations. These include implementing aggressive conservation and efficiency initiatives, maintaining and expanding our Heritage Assets, investing in our distribution and transmission systems, and adding more supply to our system through long-term electricity purchase agreements with IPPs.
How does BC Hydro benefit?
IPPs help us meet our customers' energy needs by developing and operating innovative, sustainable projects that help maintain B.C.'s competitive advantage resulting from clean, renewable energy supply. Ratepayers are not exposed to market risk with the long-term price certainty, while project development responsibilities and costs are shifted to the IPPs.
How does BC Hydro acquire electricity from IPPs?
BC Hydro acquires power from IPPs primarily through competitive processes and has been doing so since the 1980s. The amount of power acquired is based on customers' expected future needs. Through the years, BC Hydro has garnered extensive experience and expertise in energy procurement.
Merrimack Report on BC Hydro's Energy Procurement Practices
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To continue to learn from past experience and "best in class" industry trends, BC Hydro retained Merrimack Energy Group Inc. in September of 2010 to conduct an independent review of its energy procurement practices. Merrimack has significant experience working with utilities, regulators and independent power producers on energy procurement processes.
Merrimack undertook a thorough review that included input from IPPs, other stakeholders and First Nations plus a comparison with utility practices in other jurisdictions. In its findings, Merrimack found aspects of BC Hydro's current practices that meet or exceed industry standards as well as areas for improvement, as highlighted in its 2011 report [PDF, 744 Kb].
BC Hydro is in the process of adopting the majority of Merrimack's recommendations as outlined in this summary of BC Hydro's response [PDF, 30 Kb].
The following acquisition processes are underway to acquire additional energy:
* Bioenergy Initiatives to procure energy from projects that utilize wood fibre and biomass fuel sources,
* a Standing Offer Program for projects sized at 15 MW or less, and
* a Net Metering Tariff for customers with projects sized at 50 kW or less.
