B.C.’s Indigenous power producers fear they’ll be short-circuited by Clean Energy Act changes

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Leaders of the Tla-o-qui-aht First Nation on Vancouver Island have seen the future of energy, and it’s filled with small, renewable electricity projects.

Or that’s what they thought was in the works – until the B.C. government introduced an amendment, Bill 17, in June to the province’s Clean Energy Act.

If B.C.‘s NDP minority government gets the amendment passed, the legislation will give BC Hydro greater flexibility to import electricity from the United States and will repeal the mandate that British Columbia be self-sufficient in electricity supplies in average or above-average water conditions.

The province’s electricity sector is in turmoil as the government seeks to protect BC Hydro, a Crown corporation created in the early 1960s. Bill 17 has unnerved independent power producers (IPPs), including Indigenous utilities, which warn that small-scale electricity companies, once a promising industry, are now in distress.

Saya Masso, the tribal administrator for the Tla-o-qui-aht near Tofino, said the role of Indigenous groups will be reduced when they should be building more clean-energy plants to help fight climate change. “It certainly is disheartening and takes the wind out of our sails,” Mr. Masso said.

The Tla-o-qui-aht have invested $50-million in three hydroelectric projects, also known as run-of-river hydropower: Canoe Creek opened in 2010, followed by Haa-ak-suuk in 2014 and Winchie Creek in 2018.

“We pursued these projects because they’re sustainable green energy and it fits our land-use vision and doesn’t impact fisheries and our drinking water. It allows us to participate in a modern economy,” Mr. Masso said.

The Tla-o-qui-aht have also spent $2-million in early planning for another four plants that would require investments totalling $100-million, aiming to feed into BC Hydro’s low-carbon grid. But now they fear their plans will never materialize because of the proposed amendment.

“The government is doing Bill 17 in a time of COVID, when everybody is busy, worried about other things. They’re trying to slip under the radar,” said Judith Sayers, the elected president of the Nuu-chah-nulth Tribal Council, which oversees 14 First Nations on Vancouver Island, including the Tla-o-qui-aht and her community, the Hupacasath First Nation.

The Hupacasath-led China Creek project near Port Alberni began producing run-of-river power in late 2005, securing a 20-year contract to supply BC Hydro with electricity. There is no guarantee the contract will be renewed in 2025. “I’m seriously worried about the renewal,” said Ms. Sayers, who argues that the government is underestimating the trend of electrification.

The B.C. Indigenous Clean Energy Initiative, which advocates for alternative energy development by First Nations, is concerned about the province’s shift away from supporting IPPs.

Cole Sayers, the co-ordinator of the initiative, said the economic slowdown from the pandemic has placed greater importance on IPPs for regional development. At least two-thirds of the IPPs in the province have active Indigenous participation.

“There’s a way to stimulate rural and remote areas to create partnerships with municipalities, First Nations and industry and create jobs here,” said Mr. Sayers, who followed in his mother Judith’s footsteps by taking an avid interest in alternative energy.

While the word “clean” appears 43 times in Bill 17, there is no mention of “Indigenous” groups in the six-page document. That’s why Indigenous leaders are warning about a disproportionate impact on First Nations, arguing it will leave them marginalized instead of producing more renewable electricity.

IPPs say the shakeup will harm dozens of small producers in the province, especially those with contracts up for renewal over the next decade. “Our fear is that BC Hydro would go to imports,” said Laureen Whyte, the executive director of Clean Energy BC, a group representing IPPs.

While British Columbia is blessed with hydroelectricity, generated mostly by BC Hydro, Ms. Whyte said the contribution of IPPs will be unfairly restricted.

BC Hydro insists Bill 17 makes economic sense. Electricity surpluses are forecast until 2035, aided in part by BC Hydro’s $10.7-billion Site C hydroelectric dam being built near Fort St. John and slated to open in 2024.

A report titled Zapped, released last year by the government, concludes that BC Hydro has long paid inflated prices for electricity from IPPs – an assertion challenged by Clean Energy BC.

BC Hydro maintains it’s vastly more expensive to sign contracts with IPPs than to purchase electricity on the open market. It estimates the average contract price from IPPs is about $100 per megawatt hour, compared with the wholesale spot price of less than $40.

“The legislative amendment to remove the self-sufficiency mandate will allow BC Hydro to consider clean-energy resources outside B.C. if it makes sense to do so,” BC Hydro spokeswoman Tanya Fish said. “It keeps our rates low and it ensures we continue to provide clean power.”

Of the 123 electricity purchase agreements in the province, 90 are what Clean Energy BC categorizes as true IPPs: 80 hydroelectric projects, eight wind farms and two solar farms.

Thirty-three suppliers are other non-utility generators such as mining company Rio Tinto, pulp and paper mills, municipalities and facilities that are paired with mines or biomass operations. Clean Energy BC estimates that true IPPs provide 15 per cent of British Columbia’s electricity while those other generators account for 10 per cent.

Trouble for IPPs had already been brewing. Last year, BC Hydro suspended its standing offer program, which had spurred the development of IPPs.

This year, the Crown corporation invoked force majeure clauses. Citing a sharp drop in electricity demand during the pandemic, BC Hydro decided to temporarily halt buying from May 22 to July 20 from some IPPs, including six facilities run by Innergex Renewable Energy Inc.

Bruce Ralston, B.C.‘s Minister of Energy, Mines and Petroleum Resources, defends Bill 17 as a consumer-friendly change. “Clean and affordable are the watchwords that we’re guiding ourselves by,” he said.

The BC Liberals formed government in 2001 and held office for 16 years, supporting IPPs along the way. It was also the BC Liberals, however, that advocated for the Site C dam – a megaproject that decreased demand for IPPs.

Mr. Ralston said BC Hydro will spend $1.5-billion during the current fiscal year on purchases from IPPs through existing contracts. Contracts worth another $50-billion remain in place, most of which run 20 to 40 years.

“The previous government made a policy choice. They articulated their reasons for doing that. We’re making a different choice,” Mr. Ralston said. “I’m firmly convinced our approach is better public policy.”

Indigenous leaders counter that the government is misguided in believing that what’s good for BC Hydro is good for British Columbia. They say Bill 17 is faulty because it will have the effect of overriding a report issued in April by the B.C. Utilities Commission that encourages a greater role for Indigenous power producers.

Patrick Michell, Chief of the Kanaka Bar Indian Band near Lytton, views Bill 17 as a “mind-boggling” move by the government that will result in BC Hydro importing more electricity from the United States instead of buying from IPPs within B.C. Kanaka Bar co-owns the Kwoiek Creek power project with Innergex.

“BC Hydro is the tail wagging the dog,” Chief Michell said. “But the model for a sustainable economy requires diversification of energy sources placed throughout B.C.”

He said BC Hydro will become too reliant on Site C and U.S. imports. “You put all your eggs in one basket, it’s chaos when the basket breaks.”

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