BC Hydro has included the energy needs of two new liquefied natural gas facilities in forecasts of future demand in a new draft report.
However, the draft integrated resource plan 2012 notes that BC Hydro could have to provide “significant” additional energy because other LNG proposals are in the wings.
B.C. Premier Christy Clark’s jobs plan calls for three LNG plants to be up and running by 2020.
The two LNG plants the BC Hydro report has accounted for include the relatively small Douglas Channel Energy Partnership, which would produce about 700,000 tonnes per year of LNG, as well as the bigger Kitimat LNG proposal, which would have an initial capacity of five million tonnes per year.
Both Douglas Channel and the Kitimat LNG projects have obtained some government approvals and have requested service from BC Hydro.
But other companies, including Dutch energy giant Royal Dutch Shell, have made LNG proposals, complicating the question of how to ensure there’s enough electricity to go around.
“BC Hydro has sufficient supply to meet the energy needs of the first two of three LNG facilities expected to come into operation in the next five years,” the utility says in the report. “BC Hydro is working closely with potential proponents and studying supply options to meet possible additional demand that could emerge if a third LNG plant is established in the longer term or if other additional electricity demand emerges.”
Companies are rushing to build LNG plants in B.C. to tap a hungry Asia-Pacific market. Royal Dutch Shell and three Asian partners are behind the biggest proposal, a 12-million-tonnes-a-year facility that backers would like to see make its way quickly through the regulatory process.
The proposed LNG boom is only one of the moving pieces in the draft report, which also recommends going ahead with the Site C dam, a Peace River project that could cost $7-billion or more if it is ever built.
Over the next few weeks, BC Hydro will be collecting input on the report and holding open houses to discuss elements of the plan.
According to BC Hydro’s December, 2011, forecast, energy demand could grow by about 50 per cent over the next 20 years, although some savings could be achieved through conservation. And the draft IRP shows a gap between supply and demand could emerge by 2017 and grow in subsequent years if BC Hydro doesn’t take measures to prevent it.
Under the Clean Energy Act, which came into effect in 2010, the IRP is not subject to review by the B.C. Utilities Commission but is subject to cabinet approval.
That rankles critics, who say BCUC oversight should be required.
“The utility needs to be regulated so that it doesn’t make bad decisions that will cost ratepayers and the Crown in the future,” NDP energy critic John Horgan said on Wednesday. “That’s the whole point. Cabinet says, ‘well, we can be that watchdog’ – well, not if you’re fixing rates, which they’ve just done, and choosing which capital projects are going to go forward.”
On May 24, the province announced electricity rates would go up by 17 per cent over the next three years, compared with a 32-per-cent increase BC Hydro had applied for last year.
The rate application had been scheduled for public hearings at the BCUC in June, but the province decided that “further process” would not be in the best interests of B.C. residents.