Today in the legislature I rose in Question Period to ask the Minister of Energy, Mines and Petroleum Resources about the escalating costs of Site C relative to the diminishing costs of renewables.

In the days ahead, the BC cabinet will make a decision on whether or not to proceed with the construction of Site C.  It’s critical that cabinet make its decision based on the best available evidence. It’s clear to me that Site C is about to emerge as BC’s very own Muskrat Falls. A public inquiry in Newfoundland and Labrador will begin this January to determine why that hydro megaproject is so many billions of dollars over budget and so far behind schedule. It will also examine why the project was exempt from oversight by the Public Utilities Board much as the Site C project was approved without oversight from the British Columbia Utilities Commission.

Below I reproduce the video and text of the exchange. It is clear to me that the BC Liberals were feeling very uncomfortable with the line of questioning as their heckling was so loud and ongoing that I had to stop several times.

Video of Exchange

Question

A. Weaver: I see the members on the opposite side here are somewhat troubled about question period and are a little feisty today.

I’d like to take us back, hon. Speaker. I’d like to take us back to the previous decade, when Site C was advanced to stage 3 of the approval process. Its price tag then was somewhere between $5 billion and $6.6 billion. Let’s now fast-forward to 2011. The price tag now was $7.9 billion. Two years later, now in 2013, the price tag was $8.3 billion. Then the price tag grew to $8.9 billion, accompanying a year-long delay in the construction schedule.

Now the B.C. Utilities Commission says this directly: “Given the nature of this type of project and what has occurred to date, total cost for the project may be in excess of $10 billion, and there are significant risks that could lead to further budget overruns.” The cost, they found, could end up being $12 billion — and this only two years into a nine-year project.

Interjections.

Mr. Speaker: Members.

A. Weaver: My question through you, hon. Speaker — if I’m allowed to actually ask it over the heckling from opposite — is this. It’s to the Minister of Energy, Mines and Petroleum Resources. Will the minister stop the Site C project…?

Interjections.

Mr. Speaker: Members.

The question, please.

A. Weaver: I’ll try again.

Will the minister stop Site C before it gets any worse and protect British Columbians from a project that already shows signs of having costs that will spiral completely out of control?

Answer

Hon. M. Mungall: Thank you to the member for the question. I find the question very interesting because I think it highlights exactly why this project should have gone to the B.C. Utilities Commission right from the very get-go. The fact that the official opposition, when they were in government, chose not to do that — I’ve said it before, and let me say it again — was the wrong choice.

This government has righted that wrong. We have finally gone to the B.C. Utilities Commission, and we were able to get answers to the questions that British Columbians had, questions that I’m sure that the Leader of the Third Party had as well. This government is taking all of that information into consideration as we deliberate on this very important issue for British Columbians, and we’ll be working and making a decision in the best interests of British Columbians.

Supplementary Question

A. Weaver: Thank you to the minister for the response. In contrast to the grim picture of ballooning Site C construction costs, let’s now take a look at the renewable energy sector. Wind, solar and geothermal power have become cheaper and scaled up faster than anyone predicted. The cost of wind power has decreased by 90 percent since the 1980s. In the last eight years alone….

Interjections.

A. Weaver: I know that members opposite don’t like to hear data, but if you could let me actually get it through, we’d be actually all benefiting from this.

In the last eight years alone, costs for wind power declined by 66 percent. And the costs are predicted to continue to fall. Bloomberg, for example, predicts that onshore wind costs will fall by 47 percent by 2040 and offshore costs will fall by 71 percent.

Now I get that they’re feisty opposite, hon. Speaker, because they don’t like the real data. They’re just living in an ideological world of mysterious data.

Solar energy tells a similar story.

Mr. Speaker: Member, the question, please.

A. Weaver: Thanks. If I could actually ask the question….

Solar energy tells a similar story. Costs have decreased by 68 percent since 2009, and they’re projected to decrease by a further 27 percent in the next five years. We have a window of opportunity now to harness renewables and build power that puts us on the cutting edge of innovation and provides local jobs and benefits.

Mr. Speaker: Member, the question please.

A. Weaver: My question — if I can get it above this background of raucous Liberal members — to the Minister of Energy, Mines and Petroleum Resources, is this: are you prepared to forgo this generational opportunity to harness renewables by continuing in the B.C. Liberal footsteps with building a doomed megaproject?

Answer

Hon. M. Mungall: It’s clear that members opposite sure are feisty today. I’m glad that the member did get his question in.

He will note that part of my mandate letter is to build that road map into the future in terms of B.C.’s energy policy, looking specifically at our opportunities — our tremendous opportunities — at renewables.

But for today, we have to address this issue of Site C. No decision has been made, but we are in the decision-making process, and we take it very seriously. This is a very important decision for British Columbians well into the future, and that’s why we have ensured that we’re doing our due diligence by starting with the B.C. Utilities Commission.

We’re looking at the information that they brought forward as well as the incredible amount of information that has come out over the years about Site C, and we will be making a decision that works for British Columbians today and into future generations.

Today in the legislature I rose during budget estimate debates for the Ministry of Energy, Mines and Petroleum Resources to ask a number of questions concerning the natural gas industry in British Columbia. My questions were designed to explore whether or not the BC Government was going to continue giving away our natural resources.

As I have mentioned numerous times over the past few years, the BC Liberals were so desperate to try and land an LNG industry in British Columbia that they literally gave the resource away. This giveaway is embodied in a number of Acts that they passed including Bill 30 — Liquefied Natural Gas Project Agreements Act, 2015 and Bill 19: Greenhouse Gas Industrial Reporting and Control Amendment Act, 2016.

My first two questions were designed to see whether or not the BC Government would pull the plug on the agreement with Progress Energy and its partners which was predicated on Petronas making a positive final investment decision by June 2017. Petronas decided to walk away from the project in July 2017.

The remainder of the questions were designed to contrast the BC taxpayer subsidy to the natural gas industry as embodied in the “deep-well tax credits” with royalties that the province receives from the natural gas sector. As you will see in the discussion below, the province makes virtually no money on natural gas royalties. And we have an accumulated $3.2 billion dollar tax credit subsidy on the books for this industry.

Below I reproduce both the text and video of the exchange. I am sure you will be shocked by what you read.

Text of Exchange

A. Weaver: I have a number of questions on this subject matter. First off, I am troubled by some of the direction this conversation is going. We’re still trying to double down on the economy of the last century, while the rest of the world is moving forward. But with that said, let me ask a couple of issues with respect to the royalties that we’ll get.

The first is this. We know that the previous government made a deal with Progress Energy and its partners that would have locked in royalty rates, low rates, for years and would have cost British Columbians millions in lost revenue. One of the key conditions of the deal, however, was that Petronas had to make a final investment decision on Pacific Northwest LNG by June of 2017, and Petronas decided to kill that project in July of this year.

Our government now has the legal right to terminate this backroom deal, this bad backroom deal, which literally gave away our resource. My question to the minister is: can the minister tell us if the long-term royalty agreement with Progress Energy will be terminated?

Hon. M. Mungall: Thank you to the member for the question. I appreciate that he’s done his homework and he’s looked at the details of this particular project. What I can tell him right now is that the ministry has started looking into it and started to look at some of the legal aspects around that. We’ll be able to have a better idea later on. Apologies for not being able to have a more fulsome answer for him today.

A. Weaver: Can the minister let the House know if any other long-term royalty agreements are being negotiated with other oil and gas companies in line with using the Progress Energy agreement as the bar by which others will be judged?

Hon. M. Mungall: There’s nothing of that kind at this time.

A. Weaver: If we move now to the deep-well royalty program — a program that has, in my view, surpassed its usefulness, but we’ll come to that…. This deep-well royalty program was designed to enable the provincial government to share the costs of drilling in B.C.’s deep gas basins. It has since transformed into a massive subsidy for horizontal drilling and hydraulic fracturing.

It is my understanding that natural gas companies now receive hundreds of millions of dollars in “deep-well credits,” even for shallow wells, provided their horizontal sections are long enough. So five questions on this topic. One is: can the minister please tell the House what the amassed or outstanding value of these deep-well credits currently is?

Hon. M. Mungall: We’re getting that value of outstanding credits for the member. We don’t have it. We’re trying to find it in these big binders, so we’re getting that for him.

I just wanted to point out that in terms of how the program works…. I’m sorry if I missed it — perhaps the member already mentioned and he knows. What it is, is it’s credits against royalties owing. So it’s not money going to government. It’s just that we’re collecting less royalties based on a credit program that looks to incentivize industry for doing a particular task that government is hoping it will do.

A. Weaver: Very specifically, then: what is the value of the deep-well credits that were redeemed in 2016-2017?

Hon. M. Mungall: I’ll have to get back to the member on that as soon as possible. We’re just grabbing that for him.

A. Weaver: At the same time, I’d like to get the information as to what was the value of the royalties that the province of British Columbia earned from exploration in 2016 and 2017? And then I’d like to have the difference of those two numbers as well.

Hon. M. Mungall: We do have the first number for the member, and it’s the total of accumulated deep credits at $3.2 billion. That’s the total accumulation of all credits. Those credits are only available, however, to any company if their well is producing. So, if their well isn’t producing — say they earned credits as they did their exploration phase, but they didn’t produce the well — then they wouldn’t be able to access those royalty credits.

A. Weaver: The point I’m trying to get at here — and I really need the second part of those numbers — is that the credits that we give exploration companies from this deep-well program, these deep-well credits, essentially preclude us earning any money on royalties from the natural gas that is extracted.

Why it’s critical that we get the actual amount of money that we made from royalties for natural gas in 2016-2017 is we only have a cumulative total — $3.2 billion — that is yet to be claimed in the credit program. But we need to know the numbers based on an annual credit-versus-royalty gain to tell British Columbians how much we are actually making from our resource.

The reason why I think this is important — and I hope we can get these numbers before estimates end today — is that, frankly, I have no idea why this program is still needed. Why do we still need to have this deep-well credit program in light of the fact that horizontal fracturing is no longer a new technology? In fact, it’s in use all around the world. We had deep-well vertical fracturing, which my friend from Peace River South was referring to earlier, that went back decades.

Horizontal fracturing is not new. We don’t need those credits. So why do we continue to have this program? Because all that this ensures is that we earn nothing from our natural resource here in British Columbia.

Hon. M. Mungall: I’m going to make sure that we get all the correct numbers to the member opposite as soon as we possibly can, and if we’re not able to do that today for some odd reason, I’ll be sure to get it to him in the very near future.

On that, I appreciate his points. I think they’re fair points. I’ll take that into consideration.

A. Weaver: I was so dutifully notified that I was speaking at this microphone over here, where I should be speaking to my…. I’m standing at my desk, but the microphone was not pointed correctly. Corrected now.

The final question on this topic is: does the minister plan to continue this subsidy program? You know, we’ve talked about subsidies to the oil and gas industry in this province. This is a gigantic giveaway. It ensures that we essentially make no money from royalties because of the magnitude of the credit program that it can be claimed against.

In fact, my understanding is we’ve received virtually zero in 2016-2017 in natural gas royalties because of the deep-well credits that were claimed against those royalties. So will the minister continue this subsidy program?

Hon. M. Mungall: I’m terribly sorry. To the member, I didn’t catch the actual question because I got those numbers for him.

The total credits that were earned in 2016-2017 was $229 million, and the net of all royalty credits was $145 million. So we took in $145 million as government, in 2016-2017.

A. Weaver: And we gave away $229 million in the process. If I might add….

Interjection.

A. Weaver: Yes, because those credits were not claimed, were claimed against royalties — so that’s $229 million that could have come into our revenue here. We’re subsidizing the oil and gas sector to that amount.

Imagine this. If we actually subsidized renewable energy in British Columbia to the tune of $229 million a year, let alone the generational sellouts embodied in the Progress Energy agreement that we referred to earlier….

So my final question is: does the minister plan to continue this program, and if so, why does this industry still need a subsidy?

Hon. M. Mungall: In terms of reviewing the royalty credit program, there isn’t a plan to do so at this time.

Video of Exchange

Yesterday the BC Government issued a press release entitled Province delivers on commitment to freeze BC Hydro rates. The release states:

The British Columbia government is delivering on its promise to freeze BC Hydro rates, putting an end to the years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources Michelle Mungall announced today.

You would be forgiven if you thought that this announcement meant that BC Hydro rates were not going to go up next year. Clearly the CBC , Black Press and numerous other news outlets thought this was the case. So imagine our collective surprise during Budget Estimate debates for the Ministry of Energy, Mines and Petroleum Resources when we found out that in fact this isn’t yet confirmed.

Instead, what the government has done is instruct its Crown Corporation, BC Hydro, to ask the independent British Columbia Utilities Commission (BCUC) to consider overturning its already approved 3 percent rate increase for 2018. It is entirely uncertain whether the BCUC will do this given the autonomy of this organization, the very legitimate concerns about the fiscal sustainability of BC Hydro, the ability for intervenors to provide further information and so forth.

As evident in the discussion below, Tracy Redies (MLA for Surrey Whiterock), Mike Bernier (MLA for Peace River South) and I worked collaboratively to unravel what was really going on. It was a very respectful, yet revealing, debate. In the end, both the BC Liberals and I felt it was important for the Minister to issue a clarification so that British Columbians understand that there is still uncertainty as to whether or not rates will be frozen.

Text of Exchange

T. Redies: Minister, today you made the announcement that you’ll be freezing B.C. Hydro rates for a period of one year starting April 1, 2018. That was a little surprising because yesterday you had talked about doing a review and trying to find cost savings.

I’m just curious now that you’re forcing B.C. Hydro into this $150 million hole, how is this going to be made up? Are additional capital projects going to be cancelled?

Hon. M. Mungall: We canvassed this issue quite extensively yesterday with B.C. Hydro staff. The announcement made today was actually exactly what I said we would be doing yesterday. So there’s absolutely nothing different from any of our conversation, any of the questions that the member opposite asked.

All the answers would still stay the same because, at the end of the day, I asked if B.C. Hydro staff can go home to Vancouver, or if they were required to stay to answer any further questions. I was told that there wouldn’t be anymore B.C. Hydro questions.

So I don’t have the appropriate people to go deeper if the member is wanting to do that. I’m happy to take any questions in writing and make sure that I get back to her in a timely manner.

That being said, it’s her time, so if she wants to ask questions, she can. But I’ll let her know now that my answers from yesterday would be the exact same today.

T. Redies: Thank you, Minister, for your answer. I’m just very surprised that you have made an announcement. That’s why we’re back today. You’ve made an announcement, or rather, the minister has made an announcement. Pardon me. The minister has made an announcement that is going to affect the company by $150 million.

Would there have been no discussions with B.C. Hydro in terms of how this would be made up? I mean, you wouldn’t just make a decision about $150 million without having some idea of how this was going to be made up. Surely, the minister must know something.

Hon. M. Mungall: As I was saying yesterday, the rate freeze has always been tied to a review of B.C. Hydro. Also, as I said yesterday, the rate freeze will be starting in April 2018. If it goes forward — we hope that it does — the BCUC, ultimately, is going to be looking at this.

What has happened is that we have collaboratively worked with B.C. Hydro. B.C. Hydro is changing its revenue requirement application from the 3 percent rate increase it had in that RRA for April 2018 to zero percent. They’ve amended their RRA that is currently before the B.C. Utilities Commission.

The B.C. Utilities Commission will then do the due diligence that is required and determine whether a zero rate increase is acceptable. Should it be acceptable, then we will move forward with that rate freeze and conduct a review of B.C. Hydro over the course of that year. Because the rate freeze doesn’t come into effect until April 2018, it actually gives us time, by the time all of the accounting is done in that year of review, to look at ways where we can mitigate any impacts of the freeze.

T. Redies: I’m now very confused. The minister and her government just announced today a rate freeze. But I think, based on her answer, she’s saying it may or may not happen because the BCUC might decide it’s not appropriate. Is that correct? Is there a rate freeze or isn’t there?

Hon. M. Mungall: There is going to be an application for a rate freeze before the B.C. Utilities Commission.

T. Redies: So if it wasn’t a done deal, why would the minister and her government go out with a public release today telling the public that there is going to be a rate freeze starting April 1, 2018? That makes no sense.

Hon. M. Mungall: I’m sorry if the member opposite didn’t feel that I was clear yesterday. I felt that I was. I thought that I was very clear that we would always be going forward to the B.C. Utilities Commission in this very fashion. That was part of the news release that we put out, and it’s what I said to reporters just an hour and a half ago. Members opposite, I do believe, had staff people recording that, so they can go back and see that. But that has always been the process that we talked about — yesterday as well as today.

T. Redies: I know what the process is, Minister. I know what the process is. I’m just confused as to why the minister would go out with a public press release announcing this rate freeze, when she didn’t know whether or not it was going to actually happen. Isn’t that a bit misleading for the public?

Hon. M. Mungall: As I said to the member opposite, the process was clear. It is in the news release. I was clear with all of the media about the process — that we’re bringing it to the B.C. Utilities Commission for review.

A. Weaver: With respect to the minister, I’d like to read the formal government press release. It says this:

“The British Columbia government is delivering on its promise to freeze B.C. Hydro rates, putting an end to years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources announced today.

“B.C. Hydro rates have gone up by more than 24 percent in the last four years, and by more than 70 percent since 2001. The minister says that in 2016, B.C. Hydro applied to the B.C. Utilities Commission for three years of increases, with a 3 percent increase planned next year, but will be pulling back its request, consistent with this administration’s commitment to a rate freeze.

“‘After years of escalating electricity costs, British Columbians deserve a break on their bills,’ said the minister. ‘From the moment we took office, we’ve taken action to make life more affordable. As part of that, we’re going to make sure that B.C. Hydro is working for the benefit of British Columbians and that its rates reflect that commitment.’

“The rate freeze will provide government the time to undertake a comprehensive review of B.C. Hydro. That review will identify changes and cost savings to keep rates low while ensuring B.C. Hydro has the resources it needs to continue to provide clean, safe and reliable electricity. Details of the scope and process for the review will be developed once government has made a final decision.

“After completing a comprehensive review of B.C. Hydro, any cost and revenue adjustments identified will be reflected in the rates starting in April 2019.

“The rate freeze” — again — “follows government’s commitment in its September budget update to phase out the provincial sales rates on electricity.”

It says nothing about approaching BCUC. It’s very clear, and I concur with the member opposite. I feel that this is quite misleading. I would like the minister to please clarify why the press release says, on the one hand, there’s a rate freeze, and now here today we understand that there’s not really a rate freeze but an application for a rate freeze.

Hon. M. Mungall: He read the press release in full, and he also read directly from the paragraph that talks about B.C. Hydro going to the B.C. Utilities Commission and exactly how the full process is taking place, how it’s tied to a review.

I am sorry that he finds it misleading. I personally am curious as to how he does. I mean, it seemed to be really clear to me.

T. Redies: Now that the minister has gone out with this press release, what does she plan to tell British Columbians if BCUC comes back and says: “No, you can’t have a zero percent rate increase”?

Hon. M. Mungall: That’s a fair question, absolutely, and we’ll cross that bridge when we come to it. We have to go through the B.C. Utilities Commission first. We value the input that the BCUC has in our rate-setting process. We value the input that they have overall in managing our public utility from an independent, expert body looking out for the interests of the public. So we feel that the appropriate process, as defined in legislation and regulation, is to go through the B.C. Utilities Commission first and foremost. We will see what their decision is.

T. Redies: We are not quibbling about the process with BCUC. This is a process that B.C. Hydro has undertaken pretty much every year. They have a regular dialogue with BCUC, and if there are going to be rate increases — I guess now zero increases — they have to get BCUC’s permission. What we’re questioning is why the minister would go out with an announcement that signals, I think, to the public very clearly that they are responding to their prompt campaign promise and they are delivering on a rate freeze when she doesn’t have any degree of certainty that she’ll actually be able to deliver on that.

Hon. M. Mungall: I think that it’s appropriate to bring the public along with government as we take action on a number of items. I think that it’s appropriate to let the public know that we’re taking action on this item that was very important to them.

It was clear on the doorsteps I knocked on and, I’m sure, on the doorsteps the member opposite knocked on — and on any doorsteps in this province — that people are concerned about affordability. Every dollar counts when we’re dealing with an affordability crisis. So we committed to freezing hydro rates as part of our larger package in dealing with affordability. I think it’s appropriate to then tell the public what we’re doing to meet that commitment and be upfront about it, and that’s what we’re doing.

M. Bernier: Just trying to understand and clarify this, then. The minister made an announcement earlier, saying that they’re saving $150 million of taxpayers’ money through the rate freeze. She’s also on record saying that she respects the autonomy of the Utilities Commission. But by this announcement, she’s also admitting, it sounds like, that she’s prejudging the outcome now of that same group of which she says she respects their autonomy.

Can the minister explain to not only this House but to the people in British Columbia, because now we’re really confused: are they saving $150 million right now? Or are they, as she says, just putting the application forward and having to wait now to see what the Utilities Commission is actually going to say and whether they’ll approve that application?

Hon. M. Mungall: So I just want to be very clear for the record that I’m not prejudging, and nobody in this government is prejudging, the outcome at the B.C. Utilities Commission.

What we are doing is the appropriate process, and we are being upfront and honest with the public. I think that is the right thing to do. I think we all in this government think it’s the right thing to do. And so that is what we’re doing.

M. Bernier: So can the minister then clear the air, in the sense of letting the public know and letting this House know: was it an accurate comment for her to make, then, that says that the taxpayers are now saving $150 million? Or is it more of a fair comment to say they’re waiting to see if the Utilities Commission approves their application? At which point, if approved, they might be saving money.

Hon. M. Mungall: Just to clarify. I’m sure the member meant this, but just in case, and for the people who might be watching at home, the savings of $150 million would be felt by ratepayers, not taxpayers. I’m sure the member knows that difference, but I just want to clarify for anybody who might be watching.

Again, I think what is important to note here and what I’ll be sharing — and it sounds like it might be over and over and over again — is that we made a commitment during the election to make life more affordable for British Columbians. We are living up to that commitment.

One of the ways that we said we would do that is to freeze hydro rates. There is a process to go through to get to that place, and we’re following that process, and we’re being upfront and honest with the public about what that process is. We intend to live up to our commitment, absolutely, but we’re going to follow the process to do that.

M. Bernier: So just to the minister, I’m well aware of the process. I managed a utility company — was part of that for 22 years. I worked with the Utilities Commission through rate applications for that entire time, so I’m well aware of it. And every single time, we were always told that we had to wait, because sometimes on a Utilities Commission application, there are opportunities for intervenors, there are opportunities for discussion, there are opportunities on a wide gamut of things.

And you could never prejudge what the Utilities Commission would say. It’s an independent body that’s actually directed to be independent to look out for the ratepayers of British Columbia — as we canvassed yesterday and the minister was quite open on, when we talked about Site C and the role of the Utilities Commission then.

So, again, I’m just trying to understand, because…. The minister is publicly saying that the taxpayers, to make life more affordable, are going to be saving $150 million, but I have yet to hear the commitment. Is she actually directing the Utilities Commission to accept this application? Is the Utilities Commission being told, then, by government that they have to actually put this rate freeze in and accept that?

Hon. M. Mungall: As I’ve said earlier, there’s been no direction to the B.C. Utilities Commission, and should they disagree with the rate freeze, we’ll deal with that when the time comes.

M. Bernier: Is the minister willing to retract her press release and the comments then, because her government has come out and announced that the taxpayers of B.C. are saving $150 million? I think it’s fair now to say, from the line of questioning here and the answers, that they’re actually not. It’s still a maybe.

I know that her government has made promises. I know that her government and the ministry have made commitments. I’m not trying to take away from that. What I’m trying to ascertain is whether those commitments are actually still a pie in the sky. Are they happening? Are we waiting for reviews? Or is she actually telling BCUC what to do?

It sounds like the minister is not directing the Utilities Commission to accept this application. So in essence, is the minister willing to retract the press release and say that in essence, again, the people of British Columbia aren’t necessarily going to be saving $150 million yet?

Hon. M. Mungall: We’re going to have to agree to disagree here. I feel very, very solidly that our press release, everything I’ve said to media and everything I’ve said in this House has been consistent. There is no inconsistency from my perspective. I feel that we’ve been upfront. We’re being transparent. The members opposite may disagree. I’m not really surprised by that. I mean, they’re the opposition, and that’s their job. But we’re going to have to agree to disagree here.

A. Weaver: Before I ask the questions, I’d like to seek leave to make a brief introduction.

Leave granted.

Introductions by Members

A. Weaver: I’d like welcome a group from Vancouver Montessori School here, who are accompanied by their teacher, I understand: Mr. Michael Lee from Vancouver. I just saw them come in the audience, and I thought we’d introduce them and give them a little idea that what we’re debating here is the budget estimates for the Ministry of Energy, Mine and Petroleum Resources. The Liberal members opposite with the Green Party members are debating with government on this particular topic. With that, I welcome you, and I’m sure the rest of my colleagues here would welcome you as well.

Debate Continued

A. Weaver: I’m really troubled by the line of questioning here, and I’m really troubled by what’s being revealed. I have read that press release carefully. It is very clear from that press release that the government is telling British Columbians that they are going to freeze Hydro rates by April 2018. That’s the only message that you can take from this press release. It’s the only message that we took from our no-surprises, good-faith confidence and supply agreement discussions about this issue here.

This is a surprise that we are not actually freezing rates, but we’re going to the BCUC to ask them whether they will give us permission to freeze rates. But we’re not going to influence them on the one hand, because we respect the independence of the BCUC. But on the other hand, we’re saying that we’re saving $150 million. You can’t have it both ways.

So I would like to reiterate the concerns expressed by the member for Surrey–White Rock and the member from Peace River South and suggest that in emphatic terms that I believe that the minister owes British Columbians a formal correction in a press release. I will ask: will she be willing to do that in response to the line of questioning that we have seen here today?

Hon. M. Mungall: I guess, also, the Leader of the Third Party and myself and our government are going to maybe have to agree to disagree in terms of the wording of the press release. I feel it’s very clear. He did read it out. I don’t know what is unclear about that, but I think we’re just going to have to agree to disagree on this.

A. Weaver: The press release should have said this, “B.C. government will seek the ability from BCUC to freeze rates,” not “B.C. government will freeze rates.” But they said, “B.C. government will freeze rates,” and that’s simply not correct. There’s no other interpretation here.

You know, sometimes it’s okay to admit that you’ve made an error, but it is not okay to double down in defence of something that is clearly wrong. Again, to the minister: will she correct this publicly? Because it is misleading, and people across British Columbia think that their rates are going to freeze in April 2018, when they’re not. They’re not going to freeze unless the BCUC says they will.

Hon. M. Mungall: We’ve been canvassing this issue for just over 45 minutes now. I haven’t offered any new information or anything different, and I think we’ve come to the conclusion that this government and members opposite are just going to have to agree to disagree in terms of the wording of a press release.

Video of Exchange

Today in the Legislature I rose in Question Period to question the Minister of Energy Mines and Petroleum Resources about the need for Site C in light of a nonexistent LNG industry. I further questioned whether or not she would defend the interests of British Columbians and ensure a fair price for our natural gas assets by evoking a cancellation provision with the Progress Energy royalty agreement (as Petronas has not made a positive final investment decision).

In addition, in April, 2015 when Bill 23, The Miscellaneous Statutes Amendment Act was introduced by the BC Liberals, the BC NDP and I spoke out about profoundly troubling changes to the way Royalty Agreements are managed under the Petroleum and Natural Gas Act. Under these changes, the Minister was granted the power to enter into secret agreements with oil and gas companies without the approval of Cabinet. I felt it was important important to see whether the Minister would agree to not undertake such agreements.

Below I reproduce the video and text of the exchange as well as a copy of our accompanying press release.

Video of Exchange

Question

A. Weaver: I think I’m living in some kind of a fantasy world here in question period today. It’s quite remarkable.

To entice LNG projects to British Columbia in 2014, the previous government promised proponents electricity rates of 8.3 cents per kilowatt hour, but that wasn’t good enough. So two years later, they dropped the rate to 5.4 cents per kilowatt hour.

Now, we know the actual cost of power from Site C, if the government continues with this project. It will be over ten cents a kilowatt hour, while residential customers today are paying 8.6 cents at tier 1 and 12.9 cents per kilowatt hour at tier 2.

Not only are residential customers paying nearly twice what hypothetical LNG companies would pay, they’re also financing Site C to provide electricity to a nonexistent industry through a business model that will lose about five cents for every kilowatt hour of energy produced. That’s B.C. Liberal economics for you. Fortunately, for the members of that party, they have one leadership candidate who hasn’t run on their abysmal economic record.

My question to the Minister of Energy, Mines…

Interjections.

Mr. Speaker: Members, we shall hear the question, please.

A. Weaver: My question to the Minister of Energy Mines and Petroleum Resources is this. Will government admit that the only reason to continue with the construction of Site C is to provide ratepayer-subsidized power to a nonexistent LNG industry?

Answer

Hon. M. Mungall: Thank you to the member for the question. He is aware of the process that is undergoing right now. We’ve just completed the B.C. Utilities Commission review of Site C. That report was delivered just a week ago, and this government has announced that we are now moving into our analysis, and then we’ll be doing proper deliberations.

Next week myself and the Minister of Indigenous Relations and Reconciliation are actually going to be formally consulting with Indigenous communities and First Nations leaders who are directly impacted by Site C. Saying anything at present about future decision-making would likely prejudge that, and I’m just not going to be doing that.

Supplementary Question

A. Weaver: The previous government did everything industry asked them to make their LNG dreams a reality. “Jump.” “How high? How often? Where to? How many times?” They wanted to deliver unicorns to each and every one of our backyards, and when they couldn’t squeeze water from a stone, they tried desperately to squeeze even harder.

They even changed the natural gas royalty legislation so that the minister could negotiate sweetheart deals in secret. They signed a deal with Progress Energy.

Interjections.

Mr. Speaker: Members.

A. Weaver: They signed a deal with Progress Energy and its partners that would have locked in low royalty rates for years and cost B.C. millions. But that contract had an escape valve. One of its conditions was a positive final investment on Pacific Northwest LNG by June of 2017. Yet Petronas decided to kill the project.

My question to the Minister of Energy Mines and Petroleum Resources is this. When will the government stand up for the people of B.C., demand a fair price for our natural gas assets and terminate the long-term royalty agreement with Progress Energy? And will the minister confirm, for the record, that this government will not negotiate royalty agreements in secret with any other gas companies?

Answer

Hon. M. Mungall: I think there’s no doubt that anybody on this side of the House would agree with the member that the previous government made large promises and absolutely failed to deliver on those promises. I think we’ve canvassed a few of those: the jobs with LNG, the LNG prosperity fund, the “Debt-free B.C.” Families first, as well.

That being said, moving forward, we have committed to work with industry but also to make sure that our regulatory oversight bodies are doing their due diligence, as well, and that they have the resources to do so. On this side of the House, we want to make sure that government is working for all British Columbians and that we’re all together building a better B.C.

Media Release

November 8, 2017
For immediate release
Site C, Hydro finances demonstrate need to reverse trend of failed Liberal economic management: Weaver

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, is calling for an overhaul of BC’s approach to the energy file. Weaver says that the politicization of energy has got in the way of sound fiscal management and evidence-based policies that would protect ratepayers and allow BC to become a leader in alternative energy.

“Energy has been treated like a political tool in this province, depriving British Columbians of the leadership and sound fiscal management they deserve from their government,” said Weaver.

“Today, the NDP announced that they are freezing Hydro rates. B.C. Hydro is in a dire financial position due to the utter failure of the B.C. Liberals to responsibly manage our finances. They raided B.C. Hydro of more than half a billion dollars in dividends last year alone. ICBC is facing a similar financial mess for the same reason.

“Since the Liberals used LNG as a Hail Mary pass to clinch the 2013 election, they have been hell-bent on developing an industry that was never going to materialize. Due to Liberal enticements to LNG companies, British Columbians pay nearly twice as much as hypothetical LNG companies for their Hydro.

“Site C is yet another piece of this disturbing puzzle – it is billions of dollars over budget and was pushed through without proper oversight by BCUC to satisfy the LNG pipedream. BCUC, an independent body whose purpose is to protect ratepayers, was blocked from doing its job because of the Liberals’ blind pursuit to get to yes at any cost.

“The NDP is at a crossroads. They can continue down this path of reckless Liberal fiscal management, or they can keep their promise to be better. While I’m glad they’re reviewing BC Hydro, there are concrete steps they can take to reverse the trend of energy policy being used as a political tool. They can and should cancel the Long Term Royalty Agreement with Progress Energy, who, by the way, is responsible for the two largest unregulated dams in North Eastern BC. They can, and should stop the pilfering of BC Hydro by requiring dividends that, if not stopped, will amount to $2.8 billion by 2020.

“We cannot keep making political decisions while saddling future generations with debt. If the NDP truly want to make life more affordable, freezing hydro rates without developing an energy strategy – which will simply saddle our children with these costs – is not the solution. We have a generational opportunity to use this minority government to chart a new path for BC, one that takes us away from the BC Liberals fiscal mismanagement. It will require us to think big and to take bold action, but that is exactly what British Columbians deserve from their leaders.”

-30-

Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Yesterday during budget estimate debates I took the opportunity to question the Minister of Energy, Mines and Petroleum Resources on a number of topics involving clean energy projects, the Columbia River Treaty Entitlement and the folly of proceeding with Site C.

The line of questioning was designed to get the Minister to recognize that continuing to construct Site C is a fiscally reckless way forward. My questioning culminated with me asking the Minister directly:

Why are you not making a decision today to terminate Site C?

I was not very impressed with the responses I received.

Video of Exchange

Video of Exchange

A. Weaver: I have a series of very short questions on the Columbia River entitlement. My first question is: how much power is British Columbia entitled to under the Columbia River entitlement?

Hon. M. Mungall: The Columbia River treaty is under the purview of the Minister for Children and Family Development. It’s not under this ministry, unfortunately.

A. Weaver: This line of questioning is very germane to the topic at hand. I would suggest the minister should be able to answer this question, because the amount of power that British Columbia is able to get under the Columbia River entitlement is exactly the same, almost precisely the same as the amount that Site C would provide.

My question, then, to the minister is: how much is British Columbia getting, on average, from electricity sold to the U.S. spot market that could otherwise come to B.C. under the Columbia River entitlement?

Hon. M. Mungall: It’s $125 million at current market prices.

A. Weaver: What does that translate to in terms of per kilowatt hour or per megawatt hour, in terms of costs, that is being sold?

I didn’t mean this question to take so long. It was almost a rhetorical question, because the answer is about $40 per megawatt hour, and that calculation is done very, very quickly.

The reason why I wanted to ask that question is I would have hoped that the minister would be on top of this file. Because $40 per megawatt hour is less than half what the projected future cost…. The revenues being brought to the province are $127 million a year. Why is B.C. Hydro not considering power available under the Columbia River entitlement to meet this hypothetical demand in either the low or medium forecast?

Hon. M. Mungall: Sorry I was taking so long. There’s no need to be antagonistic. I was just trying to get some further information to provide to the member in reference to his question. He doesn’t want that, so okay.

The reason why B.C. Hydro isn’t looking at the Columbia River entitlement is partly that the Columbia River treaty is up for renegotiation. I would hope the member would know that. As a Columbia Basin resident, it’s one of the things that we’ve been working on since well before 2014, the first opportunity to give notice for renegotiation because the treaty comes to an end at 2024. It’s one of the reasons we’re not able to ensure that it’s with any certainty.

I see the member for Kootenay East. He will know this as well. Any Kootenay MLA will know this and know what’s going on presently with the Columbia River treaty.

A. Weaver: Frankly, I find that answer quite remarkable. Of course I’m aware about the Columbia River treaty, and Site C is not to be built any time before 2024…. I mean, it will be 2021 before that’s built. The reality is that there is power available today, firm power to the amount available for Site C for any interim costs.

My follow-up question to the minister is this. Why is it that we have about 170 megawatts — or 117, I believe it is — in the standing offer program that’s gone through and there’s no call for power? Why is it that B.C. Hydro did not put a call out for power at ten cents a kilowatt hour and take, accepting those applications in the standing offer program…? Because we know that the price of Site C, as noticed by the BCUC and the ongoing tension cracks that we’re seeing, is going to come in higher than that. Why was no call for power at ten cents per kilowatt hour issued?

Hon. M. Mungall: First, the standing offer program and calls for power were different types of programs.

The call for power — B.C. Hydro did calls for power in 2003, 2006, 2008. After the last one, the recommendation to the previous government was to go forward with Site C rather than another call for power. Their rationale, at the time, was that B.C. needed more firm power, not more intermittent power and that intermittent power was being generated at a higher cost than what B.C. Hydro felt they could do in terms of constructing Site C.

That’s the reason why there hasn’t been a call for power since then. The member will note this government took action in terms of bringing Site C to the B.C. Utilities Commission, as that decision to move forward without a review by the B.C. Utilities Commission was done by the previous government, not ours.

A. Weaver: I correct my previous statement. There are 137 megawatts in the standing offer program ready to go, including 15 megawatts of an amazing solar facility by Rocky Mountain Solar in the Cranbrook area ready to go — on private land, with support of the local community, transmission lines through the property, ready to go, scalable to 50 megawatts. Give them a price. They’ll deliver. We have examples of pump storage on Vancouver Island and in the Kootenays as well, ready to go, but again, B.C. Hydro is not bringing them into the fold.

So my question to the minister is this. In light of the fact that we have the BCUC, why are you not making a decision today to terminate Site C? For four years now, the B.C. Greens have pointed out the fiscal folly of moving down this path solely to deliver to below-market contracts that were signed with LNG proponents that have left British Columbia. Why, based on all the evidence, are we kicking the can down the road until December when a decision could have been made in May, it could have been made in June, it could have been made in September, and it could be made today?

Hon. M. Mungall: I just wanted to ask my staff a quick question. The member brought up pump storage, and I interpreted that to mean pump storage that is active in the Kootenays, and that was something I wasn’t aware of going on. The reason why I wasn’t aware of it is because it’s actually not taking place in the Kootenays. There may be proposals that are currently being developed by some entrepreneurial individuals, but in terms of it actually existing right now, it doesn’t. So I was just curious about that.

To answer the member’s question about why a decision isn’t being made today, why a decision wasn’t being made in May or in June. I think looking back in terms of what has happened over the summer…. The member was very active in it, so I think he knows the answer to those particular timelines.

In terms of today, well, we’ve been very clear with our process. We’ve sent things to the B.C. Utilities Commission, as we committed to the electorate that we would do, as we committed that we would do in our supply agreement with the member and other members of the Green Party. That process has now finalized in terms of the BCUC’s report on November 1. And as we’ve said, to answer the member’s question, we have to do our due diligence. We have to provide appropriate analysis of the B.C. Utilities Commission report. We have to do that due diligence, and we have to take the time appropriate to do so, and so we are doing that.

That being said, we also recognize that there is a lot of uncertainty for people. I mean, I can absolutely empathize with people in the north. I know that members opposite in the B.C. Liberal caucus are representing their interests very well in terms of wanting to make sure that a decision is done in a timely manner, and that’s why we’ve committed to doing that by the end of this calendar year.