Today in the legislature I rose to ask the Minister of Energy, Mines and Petroleum Resources what his government was doing to protect small scale power producers in British Columbia. Many of these power producers are already producing electricity yet they are unable to find a market for it since current regulation means that only BC Hydro is allowed to be the purchaser.

I use the specific example of Silversmith Power & Light Corporation to illustrate one of myriad problems facing the independent power producer sector.

Below I reproduce the video and text of my exchange with the Minister.

Video of Exchange

Question

A. Weaver: Under the NDP government in the 1990s, B.C. Hydro actively courted small-scale power producers to join their grid. One company, Silversmith hydro, received an offer to provide power to the New Denver area, in exchange for the opportunity to sell electricity to green markets. In formally accepting the offer, Silversmith bore the up-front costs associated with connecting to the B.C. Hydro grid.

Despite Silversmith’s sunk costs, B.C. Hydro later backed out of their agreement, compensating Silversmith at junk power rates, which were less than the cost of generation. After Silversmith raised the issue with the B.C. Liberal government, B.C. Hydro offered Silversmith a fair-market price for their electricity, but they only purchased a quarter of their capacity. During this same time period, B.C. Hydro continued to enter into opaque contracts with many large IPPs.

The situation with Silversmith is representative of how B.C. Hydro has dealt with numerous other small-scale power producers, even though many of these companies are considered to be the greenest hydro producers in the province.

My question through you, hon. Speaker, is to the Minister of Energy, Mines and Petroleum Resources: when is the government planning to rectify this situation and begin to deal more fairly with small-scale hydro producers in this province?

Answer

Hon. B. Ralston: Thanks to the member for the first question I’ve had in my new role as the Minister of Energy, Mines and Petroleum Resources.

Let me say that the B.C. Liberals chose to sign a series of sweetheart deals with their friends in the independent power sector, which cost every B.C. Hydro customer an extra $200 a year. In total, given the length of these contracts, people will pay, in British Columbia, a staggering $16 billion on unnecessary costs, all because the old government put their friends first.

They made a huge mess at B.C. Hydro and left people to pay for it. Some of the fallout is what is referred to in the member’s question. Under their watch, power rates went up by 70 percent. Given the chance, they wouldn’t have lowered hydro rates. Their plan would have seen people’s rates increase more than twice as much compared to our approach.

We’re focused on cleaning up the mess the old government left at B.C. Hydro and making it work for people. Making life affordable for people is a top priority for us as we work through phase 1 of B.C. Hydro review. As part of this work, B.C. Hydro is taking a prudent, case-by-case approach to deciding whether to renew expiring energy purchase agreements with independent power producers ensuring that prices are cost-effective for taxpayers.

I’m pleased to say that, as a result of this hard work, we’ll be able to apply for a rate reduction. This is the first time B.C. Hydro has been able to do this in decades. If our application is approved, before the independent regulator….

Interjections.

Hon. B. Ralston: You can’t take more good news?

If our application is approved, B.C. Hydro rate bills for consumers in British Columbia, for our citizens, will be 55 percent lower than what the old government wanted to charge.

We’ve also launched phase 2 of our review, to make sure it’s working for British Columbians.

Interjections.

Hon. B. Ralston: I’m not sure whether he’ll get a second question, so I want to make sure I give a full answer.

In our review, we’ll look at CleanBC’s electrification targets, new technologies, new rules for Indigenous nations, and looking for new opportunities at B.C. Hydro.

Supplementary Question

A. Weaver: Thank you to the minister for his answer. Unfortunately, to the minister’s answer, under his government the standing offer program under B.C. Hydro has been cancelled. As a direct consequence of that, a myriad small companies who have invested millions upon millions have now got lost capital. They are seeking indemnity, and they are seeking that money to be refunded through the court system. This has sent a very strong signal to the independent power producers, the small-scale producers in this province, that British Columbia is not a friendly place for small-scale hydro.

To the minister: what is he going to do to ensure that B.C. Hydro actually steps up and starts to rebuy those contracts and stops trying to squash each and every one of these small-scale producers, which exist in British Columbia already, with some capital?

Answer

Hon. B. Ralston: Let me repeat or recapitulate what I said last time. I think it bears repetition for sure. B.C. Hydro is taking a prudent, case-by-case approach to deciding whether to renew existing purchase power agreements with independent producers, ensuring prices that are cost-effective for taxpayers. And as part of the phase 2 review, the report is not yet in. I’m awaiting it.

We will be looking at making sure that we meet CleanBC’s electrification targets, new technologies, new roles for Indigenous nations, and looking at new opportunities for B.C. Hydro. That final report will be received very shortly.

So we will continue this important work while keeping rates affordable for British Columbia citizens.