The industrial power costs sending shockwaves through B.C. resource communities are raising more questions over the wisdom of BC Hydro’s multibillion-dollar Site C investment and the Clean Energy Act’s requirement that the province be electricity self-sufficient.
As detailed in “Soaring power bills threaten heavy industry, forestry in B.C.” (Business in Vancouver issue 1423; February 7-13), electricity is becoming an increasingly prohibitive operating expense for B.C.’s forest product mills. The annual PST bill alone for the power that Catalyst Paper uses is around $11 million, and that bill isn’t about to drop any time soon. Hydro’s rate for industrial customers, which has jumped close to 27% over the past four years, is set to rise another 9.4% over the next four.
The collateral damage at ground level: permanent mill closures that take hundreds of high-paying jobs with them.
The push from B.C. mill-town mayors to remove the PST from industrial power in the next provincial budget is consequently gaining momentum. But rising energy costs also raise concerns over Hydro’s finances and the timing of its dogged pursuit of another hydroelectric megaproject.
Hydro’s long-term debt is now hovering around $18 billion, up from $12.8 billion in 2012. It’s estimated overall Site C investment is pegged at $8.8 billion, and the province’s Crown power corporation plans to sink another $20 billion into electrical system upgrades over the next 10 years.
Were Hydro not bound by the province’s Clean Energy Act to be electricity self-sufficient, it could tap the Columbia River Treaty for power available now that would be roughly equal to what Site C will generate, but without the $8.8 billion price tag.
Rather than embark on a massive dam project like Site C, which comes at a huge financial and environmental cost, Hydro and the provincial government should be pursuing initiatives that provide B.C.’s residents and its core industrial sectors with the best power deals available from the North American power grid.