B.C. studying hydro deals for industry to offset price increases

An electricity rate review now under way will look for measures to soften the blow of price increases for large industrial users, including power-hungry mines.

Such steps could include special rate packages for heavy industry along the lines of energy policies in Alberta, B.C. Mines Minister Bill Bennett says.

"We're looking at those kinds of things," he said Wednesday at an industry gathering for the release of the PricewaterhouseCoopers 2013 Mining Industry Survey.

Rising electricity costs are a worry for the mining sector, which is already grappling with falling commodity prices that have resulted in some mines being closed or put on hold.

B.C.'s overall industrial electricity rate is lower than Alberta's, but Alberta has packages linking rates to time of use, Mr. Bennett told reporters after the event. "There are different kinds of approaches to rates that are novel and are worth looking at," he said.

The province will also consider incentives for companies that invest in energy-saving programs and equipment, he added.

Mr. Bennett's remarks come as the province is dealing with questions of how to provide, and pay for, electricity in coming decades. One of the biggest question marks hovers over Site C – a proposed hydroelectric dam on the Peace River that has been on and off the drawing board for more than three decades.

This month, a Joint Review Panel concluded Site C would have clear benefits, including locking in energy supplies at a price that would benefit future generations with technology that would produce a "vastly smaller" burden of greenhouse gases than any other sources except nuclear, which B.C. has prohibited.

But the panel, without issuing a clear yes or no on the project, said BC Hydro had not fully demonstrated the need for Site C. The provincial utility is making the case for the dam.

The provincial and federal governments have six months to review the panel's report. Both levels of government would have to approve the dam for it to go ahead. The current estimate for the project, which would involve adding a third dam to two existing hydroelectric facilities on the Peace River, is $7.9-billion.

The panel also found BC Hydro was pushing the 1,100 megawatt Site C plan without having fully explored alternatives, such as geothermal power.

"BC Hydro's failure to pursue research over the last 30 years into B.C.'s geothermal resources has left BC Hydro without information about a resource that BC Hydro thinks may offer up to 700 megawatts of firm, economic power with low environmental costs," the panel concluded.

Along with a provincial rate review, B.C. also launched a rate review of the B.C. Utilities Commission last month. BCUC is supposed to oversee rates but some of its recent decisions have been overturned by the province.