VIGP Daily Hearing Summary For Tuesday, June 24
DAY 7
The day commenced with the GSXCCC Panel No. 2 (Mr. Steve Miller, Dr. Mathew
Bramley) who were to speak to the issues of load forecasting and GHG
emissions.
Mr. Miller began with a presentation concerning his views on BC Hydro's load
forecasting. He has performed a series of load forecasts and has compared
them to BC Hydro's. Mr. Miller criticised the lack of transparency of BC
Hydro's forecast methodology. Mr. Miller believes that BC Hydro's load
forecasts are on the high side and that BC Hydro's urgency to build the
VIGP, based on BC Hydro's forecasts, is not borne out.
Dr. Bramley also had an opening statement regarding the future financial
liability for GHG's that exist with VIGP. The government of Canada has
stated that it will have a GHG trading system in place by 2008, and this
trading system will determine the price to be placed on GHG emissions. GHG
emissions pricing is quickly emerging as a business issue in Canada and will
impact VIGP. GHG liabilities should be included in considerations of VIGP's
costs.
BCOAPA cross-examination of GSXCCC Panel No. 2:
BCOAPA had only a few questions for this panel. BCOAPA queried the cost of
mitigation and the derivation of the $15/ton used by the federal government
in valuing GHG credits. Dr. Bramley agreed that BC Hydro's hydro based
system may offer less chances of mitigation against GHG emissions and that
the federal government has never adequately explained how the $15/ton was
derived.
Terasen Gas (Vancouver Island) Inc. ("TGVI") cross-examination of GSXCCC
Panel No. 2:
TGVI queried Dr. Bramley on the applicability of his evidence (based on
VIGP) to TGVI's system and proposed expansion. Dr. Bramley stated that his
evidence would apply to TGVI but that a co-generation plant would have some
offsetting values. The Burrard Thermal plant and its GHG emissions were
raised in questioning. It was agreed that BC Hydro would likely have a
benefit to using VIGP over Burrard Thermal.
BC Hydro cross-examination of GSXCCC Panel No. 2:
BC Hydro began by challenging the evidence that Mr. Miller had provided,
particularly the load forecast graphs he had used to base his assertions on.
BC Hydro followed with a series of questions to Dr. Bramley regarding his
evidence, in particular the use of information from Innovest, a financial
consulting firm that specializes in environmental issues for investors. Dr.
Bramley had used a quote from an Innovest newsletter to suggest that BC
Hydro was not holding up to others in the industry with regard to potential
GHG liabilities. BC Hydro countered with evidence from Innovest in the form
of a ranking that the company does of companies and their environmental
attributes. The evidence showed BC Hydro in the top ranks of energy
companies and is rated as "AAA". BC Hydro was quoted as having below average
risk and above average performance in environmental management. Dr. Bramley
works for the Pembina Institute and BC Hydro pointed out that the Pembina
Institute considers BC hydro to be one of the more progressive Canadian
firms.
Commission Counsel cross-examination of GSXCCC Panel No. 2:
The commission counsel began with a brief series of questions to Mr. Miller
regarding load shedding and in particular, the difference between forced and
contracted load shedding. These were followed by questions to Dr. Bramley
regarding GHG offsets. Topics touched on included Power Smart's role as a
GHG offset, green energy acquisitions/investments and whether a GHG reduced
project would provide a credit or an offset. Commission counsel also queried
Mr. Miller on BC Hydro's approach to forecasting as opposed to his
methodology. In particular, BC Hydro may be emphasising transmission loads
to a greater degree than Mr. Miller has, since he focuses on distribution
level customers. Finally, the cross-examination concluded with a discussion
regarding the reduction of GHG's through Power Smart programs and GHG
intensities.
Resumption of BC Hydro Panel No. 4 - Continuation of cross examination by
GSXCCC:
The questioning began with queries regarding BC Hydro's GHG offsets and
whether or not they are Kyoto compliant. BC Hydro stated that BC Hydro's
offsets from its 50 per cent reduction commitment were not expressed in
terms of whether they were Kyoto compliant or not. Questions also focused on
BC Hydro's management of GHG's on a portfolio basis, their acquisition at
least cost, and the option value of CCGT's on the mainland. BC Hydro
maintains that there remains a very large element of uncertainty regarding
GHG liabilities as regulatory certainty does not yet exist, therefore BC
Hydro does not find it prudent to hedge against GHG's at this time. Finally,
the GSXCCC cross-examination concluded with some questions regarding BC
Hydro's portfolio analysis and the $/MWh of unit costs.
Mairie McLennon cross-examination of Panel No. 4:
Ms. McLennon's questions focused on a BC Hydro Power Smart news release and
the quote in the news release of a 20 per cent growth in population on
Vancouver Island, questions regarding peak demand savings from Power Smart,
the heritage contract submission, and downstream benefits ("DSB's).
BCOAPO cross-examination of Panel No. 4:
The BCOAPO began with questions comparing the seismic risk between the GSX
project and the Tilbury-Harmac gas pipeline route from Terasen. BC Hydro
confirmed that no study has been done comparing the two projects, although
each route has had seismic studies done alone. There then followed a series
of questions concerning the recently completed Conservation Potential
Review, which BC Hydro filed in this hearing. Of particular interest was the
$.06 cut-off in the CPR. Finally, the issue of DSB's completed the
examination.
TGVI cross-examination of Panel No. 4:
TGVI led off with questions regarding the Texada compressor and the value
the BC Hydro would get back if the TGVI proposal was successful (i.e. the
salvage value of the Texada compressor).
A prolonged series of questions then followed challenging and critiquing BC
Hydro's rebuttal evidence filed in response to TGVI's proposal. There were
questions raised regarding BC Hydro debt/equity per cent used in the GSX
hearing, the heat content of natural gas assumptions, the contract demand
being used by the VI Joint Venture, the dispatch of VIGP, the load factors
of ICP, line pack, the integrated operations of TGVI and GSX, the foreign
exchange risk taken on by BC Hydro and the addition of a U.S. shipper on GSX
at Sumas. The TGVI cross was completed with a final question regarding cost
causation on the TGVI line.
The day ended and BC Hydro Panel No. 4 continues on the morning of Day 8.