Pipelines will suck us dry

New pipelines will require large subsidies in cheap power from BC Hydro

Editor, The Times:

Back in 2003, a fellow teacher and I registered as interveners in BC Hydro’s first hearing on rate increases. This hearing was to reveal Gordon Campbell’s disastrous “energy plan”. Two facts stood out regarding this meeting.

First, Hydro’s newly minted CEO, Bob Elton, introduced himself by saying, “We made a mess in Alberta (presumably insofar as the management of electricity resources in that province) but we’re going to do better here.”

Buried in the hundreds of pages of information handed to us were some revealing numbers. The energy plan would be buying private electricity at over $0.12 per kilowatt-hour, well above the half-cent per kilowatt-hour that it was costing Hydro to generate power from its own “heritage resources”. Hydro’s purchase plan still buys power at about twice the rate paid by domestic consumers.

Nine years later, we have two tar-sands bitumen pipelines proposed for this province. These would add incomprehensibly large loads to Hydro’s grid and, if nothing changes, they would enjoy a huge subsidy, courtesy of BC Hydro and its ratepayers.

You see, Hydro’s industrial rate, even for new (called marginal) accounts is only about 4.4 cents per kilowatt-hour but Hydro’s latest call for private power is offering 12.4 cents a kilowatt-hour. Hence, the pipeline subsidy is on track to be $0.08 per kilowatt-hour.

Figures obtained for Enbridge’s highly disputed Northern Gateway Project describe the power requirements as 77 Megawatts for condensate pumping and 116 MW for the bitumen pumping. This adds to 193 MW, which far outstrips BC Hydro’s largest customer, Highland Valley Copper. Gateway will consume power at same rate as 200,000 homes. This represents the residential needs of a city of about 460,000 inhabitants !

B.C.’s second bitumen pipeline, Kinder Morgan’s Trans-Mountain expansion, is skillfully flying under the radar, in terms of public opposition. It’s tough to get exact numbers on the required electrical demand but, a proportional comparison with the Northern Gateway, based on length and pumping capacity, yields an estimate of 230 MW. Together, these two pipeline projects would consume 10 million kilowatt-hours a day. They would add over 420 Megawatts of base power demand, to the grid, and they would obtain a daily operating subsidy of $800,000 and an annual subsidy of $292 million, courtesy of BC Hydro.

Eric Andersen, a retired federal government economist from Galiano Island, has analyzed Hydro’s cash flow situation and he concludes that it is headed for bankruptcy. This is hardly surprising when marginal energy sales don’t cover the cost of marginal power purchases. However, there will be beneficiaries to this situation: the pipeline companies and the private power producers. B.C. citizens will pick up the tab.

Dave Simms

Clearwater, B.C.