Introduction and Objectives
The government of British Columbia tabled the Clean Energy Act (the "Act") on April 28, 2010. This draft legislation has the potential to significantly impact the energy sector in the province. The Act is a clear response by the government to the recent ruling by the B.C. Utilities Commission (the "Commission") that BC Hydro's 2008 Long-Term Acquisition Plan, a plan highly focused on the development of clean energy in the province, was not "in the public interest". The Act opens the door for the export of clean energy to other jurisdictions. As of the date of publication, the Act has only passed first reading in the legislature and its final form could contain important changes.
The Act establishes a number of different objectives for the energy sector in B.C. Among the most important goals are to:
- achieve electricity self-sufficiency by 2016;
- become a net exporter of electricity from clean or renewable resources;
- generate at least 93% of the electricity in B.C. from clean or renewable resources and to build the infrastructure necessary to transmit that electricity;
- establish concrete targets for reductions in both provincial electricity demand and greenhouse gas emissions;
- encourage the use and development of green and renewable energy sources; and
- foster the development of First Nation and rural communities through the development of green and renewable energy projects.
Consolidation of B.C. Hydro and BCTC
The Act consolidates the BC Transmission Corporation ("BCTC") and BC Hydro. All of BCTC's assets, rights, liabilities, property and contracts are to be transferred to BC Hydro. BC Hydro is tasked with several new responsibilities, including the creation of an integrated resource plan outlining means of servicing the province's energy demands over the next 30 years. The energy plan must address infrastructure development, demand reduction initiatives and energy export policies. BC Hydro is also required to develop prescribed long-term energy sales contracts for domestic consumers. The plan must generally rely on no energy and no capacity from the Burrard Thermal Plant, a conventional natural gas-fired generating station.
Reduction in the Commission's Role
The role of the Commission is significantly reduced. The Commission's approval is no longer required for many of the province's "marquee" energy projects. These projects include the Clean Power Call, Site C, the Northwest Transmission Line, the Standing Offer Program and several other listed generation projects. The Commission does, however, maintain its authority to establish rates for domestic electricity usage.
Standing Offer and Feed-in Tariff Programs
The Act modifies the Standing Offer Program published in June 2008 by allowing it to accept projects capable of producing more than the initially established 10- megawatt threshold. If selected by BC Hydro, these larger projects can enter into standard form electricity purchase agreements.
The Act also grants BC Hydro the ability to establish a feed-in tariff program for provincial energy production. Feed-in tariff programs are generally designed to encourage the use and development of renewable energy through provisions granting long-term supply contracts, access to transmission systems and purchase prices linked to the sources of energy production.
Heritage Assets
The Act protects certain specified "heritage assets" by reinforcing the prohibition on their sale, thereby ensuring they remain under BC Hydro's control. Heritage assets are specifically designated low-cost projects which are intended to provide the province with electricity.
Smart Meter Program
The Act also requires BC Hydro to establish a "smart meter" program which involves the installation of electricity usage monitors in private residences. The information recorded by these meters will help BC Hydro plan and develop future infrastructure projects.
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