Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Conference Board of Canada releases report on impact of Climate-related technology investments in Canada

On May 5, the Conference Board of Canada released a report entitled The Economic and Employment Impacts of Climate-Related Technology Investments.

The report, produced for the Alberta-based Climate Change and Emissions Management Corporation (CCEMC), is based on a review of provincial climate action plans and programs, as well as core federal government climate technology investments. It demonstrates that in addition to helping to reduce greenhouse gas (GHG) emissions, climate-friendly technology investments can contribute to both economic and employment growth over the next five years. The study includes private and public technology investments made under government programs, which will total $11.8 billion over the period of 2010 to 2014 and then identifies the impact of these investments on gross domestic product (GDP) and employment.

The potential economic impact of such investments varies among the provinces, depending on how their economies are structured and the nature of the investments that each government has planned. With the largest overall expenditure, Alberta is expected to increase real GDP by almost $5 billion. In Ontario, about $2 billion will be added to real GDP. In addition, investments in climate-friendly technologies could generate even greater benefits - not captured in the Conference Board's analysis - through domestic and export sales.

Larger and more diverse economies can expect to obtain a greater economic impact per $100 million tranche of technology investment. For example, thanks to its diversified manufacturing base that can develop and produce a wide variety of technologies, Ontario will generate about $107 million in real GDP for every $100 million in expenditure, whereas Alberta is expected to achieve $70 million in additional real GDP for every $100 million invested, due to its higher dependence on out of province suppliers compared to Ontario. As for Manitoba and British Columbia, those provinces can expect more than $80 million in real GDP for every $100 million of investment.

Of note, Alberta and Ontario - the two provinces with the largest GHG emissions - are also the provinces with the highest levels of technology investment. Climate-friendly investments in Alberta, at $6.1 billion in current dollars over the 2010-2014 period, are expected to surpass all other provinces combined. Ontario is expected to spend nearly $2 billion, while Saskatchewan, Quebec and British Columbia are expected to spend more than $1 billion each over this period.

In employment terms, Alberta's technology investments are expected to create more than 50,000 person-years of employment, followed by Ontario (29,000 person-years), British Columbia (13,000 person-years) and Quebec (12,000 person-years). When compared against current employment levels, Alberta, Saskatchewan and British Columbia can expect the largest percentage increase from climate-friendly technology investments.

Len Coad, the Conference Board's Director, Energy, Environment and Technology Policy, Western Office stated that "Canada will require significant investment from both the private and public sectors to meet the aggressive GHG reduction targets being set out by governments [...]" He added: "Innovation will play a key role in achieving climate change goals. To achieve environmental and full economic benefits, governments need to properly support home-grown commercialization of technologies and help develop Canadian clean energy companies. Tapping into export markets for these new technologies would achieve even greater economic benefits."

A copy of the report can be obtained here.

First Power Solar Project: Clean Energy for First Nations Communities

Today at the 2009 Solar Conference, the Government of Canada announced an investment of up to $1 million in the First Power solar project through its ecoENERGY for Renewable Heat program. In addition to the federal government's commitment, First Power is also being supported by Solar BC and several financial institutions, including the All Nations Trust Company.

The First Power project will support the installation of domestic solar water heating systems in up to 900 homes, with a focus on remote First Nations communities.

First Power, which will leverage millions of dollars in additional funding to complete its projects, is a partnership between Taylor Munro Energy Systems and the Centre for Integral Economics. This unique hybrid business is designed to support First Nations communities to gain access to and ownership of renewable energy and clean technologies. The project intends to replace diesel power generation by energy systems that deliver all the heat, light and power a community requires through renewables.

Making the announcement on behalf of Minister Lisa Raitt was Senator Linda Frum, who declared: "This investment will generate new economic activity in First Nations communities, while reducing energy costs and greenhouse gas emissions [...] Investing in projects like this will stimulate the growth of a domestic clean energy industry, create high-quality jobs for Canadians and help protect our environment."

Donna Morton, President of the Centre for Integral Economics added: "We believe that First Nations can take ownership of renewable energy and clean technology systems through orally taught training [...] Autonomous energy can give First Nations in Canada both a leading role in building green collar jobs and economic development that respects ancestors, elders and the future."

BC Hydro Releases Q&A on First Nations Consulation with Respect to Power Calls

On November 18, 2009 BC Hydro released Questions and Answers (Q&A) on its website regarding BC Hydro's role with respect to First Nations consultation. The Q&A stems from uncertainty in the nature and scope of consultation required as a result of BC Court of Appeal decisions in Carrier Sekani Tribal Council v. British Columbia Utilities Commission, (2009 BCCA 67) and Kwikwetlem First Nation v. British Columbia Utilities Commission (2009 BCCA 68).

The Q&A is directed to Independent Power Producers (IPPs) to "help in understanding BC Hydro's role regarding First Nations consultation for current and future power acquisition activities."

In the Q&A, BC Hydro describes a shift in assessing IPPs consultations with First Nations, from a risk assessment standpoint in evaluating IPPs proposals (ie. will consultations affect securing of land tenure), to adequacy of consultations prior to submissions of Electricity Purchase Agreements (EPA) to the BCUC under section 71 of the Utilities Commission Act.

One question begging to be answered from this is: how will this affect IPPs in the Clean Power Call, the Bioenergy Call, or future power calls? For the current Clean Power Call, BC Hydro's response is that "further information or action may be required from or by those proponents to enable BC Hydro to complete that assessment."

For the Bioenergy Call Phase II, since the call is in its early stages, BC Hydro intends to incorporate new requirements with respect to First Nations consultation into call documents and timelines, and will update the website accordingly.

For the Standing Offer Program (ongoing acquisition process for projects up to 10 megawatts), this program requires proponents to apply with permits already in place, but BC Hydro notes that it will still assess the adequacy of consultation before offering an EPA to an applicant.

For future power calls, it appears as though BC Hydro will build in this new assessment approach into each call. When assessing the adequacy of consultation, BC Hydro will "seek to identify what, if any, other agencies have already assessed the adequacy of consultation", and this evidence may satisfy their requirements, or they may require "additional evidence to support an IPP proposal".

The factors BC Hydro will consider when assessing First Nations consultation may include:

• Information on how the IPP determined which First Nations to consult.
• Information on the potential degree of impact from a project on aboriginal rights and title, and information on how this assessment was reached.
• Information on the level of consultation and potential avoidance, mitigation or accommodation required for each impact and how this was, or will, be undertaken by the IPP as evidenced by consultation reports, logs, impact benefit agreements, letters of support, correspondence and any other material submitted demonstrating consultation.

What is clear from this Q&A is that the BC Hydro has recognized that the ground rules with respect to First Nations consultation have changed as a result of the Carrier Sekani and Kwikwetlem cases and they are attempting to respond to this in a way that addresses this issue with respect to current power calls and future power calls, to provide some level of clarity for IPP proponents, First Nations and other interested stakeholders.

BC government confirms decision to phase out Burrard Thermal

The BC government reiterated its commitment to green power and energy self-sufficiency last week. In a special directive issued to the British Columbia Utilities Commission ("BCUC"), the government ordered BC Hydro to phase out the Burrard Thermal station and to accelerate its generation procurement plans to ensure the province is self-sufficient by 2016.

On October 28 Blair Lakstrom, Minister of Energy, Mines and Petroleum Resources, confirmed that the government has ordered BC Hydro and the BCUC to stop considering Burrard Thermal in planning the provinces long term supply of firm energy. Effective immediately, Burrard Thermal is to be used only for up to 900 MW of emergency capacity.

The Vancouver Sun quotes Lekstrom as saying, "Burrard is antiquated technology in an airshed that is pretty difficult to manage. When we think about the air quality, running this just doesn't make sense."

The government also ordered BC Hydro to bring an additional 5,000 GWh of clean power online through internal projects and procurements from independent power producers. This accords with the original draft of the Long Term Acquisition Plan, which provided that 5,000 GWh should be procured through clean power calls. Additionally, the government has ordered BC Hydro to procure 1,000 GWh of biomass power (likely from the Phase 2 Bioenergy Call).

The government's directives directly contradict the controversial decision of the BCUC regarding BC Hydro's Long Term Acquisition Plan (discussed here).

As further evidence of the province's renewed commitment to green power, the government announced on November 2 that it will implement its Throne Speech promise to establish a Green Energy Advisory Task Force. The task force will include groups focused on:

• Procurement and Regulatory Reform;
• Carbon Pricing, Trading and Export Market Development;
• Community Engagement and First Nations Partnerships; and
• Resource Development.

After several months of uncertainty, it appears that the province is again on track to become an energy self-sufficient province powered by green energy. IPPs are no doubt looking forward to moving projects forward under BC Hydro's the existing and planned clean and bioenergy power calls.

Vancouver - The Greenest City of them All?

The City of Vancouver is on a quest to become the "greenest" city of them all. Not without "fierce competition" though, from the likes of London, Sydney, Copenhagen, New York, Portland, Seattle, San Francisco, Chicago, Toronto, Berlin, Paris, Stockholm and others. Copenhagen is the self-described "Global Climate Capital", Stockholm aims to be fossil fuel free by 2050 and London's mayor has pledged to make London the "cleanest and greenest city in the world."

To fulfill this "green" quest, the City of Vancouver has released a long-term action plan dubbed Vancouver 2020: A Bright Green Future - An Action Plan for Becoming the World�s Greenest City by 2020. The plan sets out measurable and ambitious targets in three broad areas: 1) Green Economy, Green Jobs; 2) Greener Communities; and 3) Human Health.

1) Green Economy/Green Jobs
Targets set in this area include:

• Green Jobs - generating 20,000 new green jobs. Two signature ideas related to this are: i) creation of "Low Carbon Economic Development Zones"; and ii) a green entrepreneur kick-start program. The proposed Zones would be areas such as False Creek Flats which would be designated for the development of low-carbon businesses, technologies, products and services. The Kick-Start program would offer expert guidance and seed capital to aspiring "green' entrepreneurs.
• Reducing Emissions (Climate Change Leadership) - reducing GHG emissions 33% from 2007 levels (as set out in the province's Energy Plan). This involves developing an integrated energy strategy, and changing land-use patterns to increase density and permit mixed-uses.
• Green Building - developing a strategy to enable all new construction to be carbon neutral by 2020, and improved efficiency of existing buildings by 20%. The report notes that "tens of thousands of buildings will require energy efficient retrofits." The report also notes that "On-Bill Financing" could be very beneficial to encourage energy-efficiency upgrades.

2) Greener Communities
Targets set in this area include:

• "Green mobility" - making at least 25% of trips on foot or bicycle and 25% on public transit. Recent data indicates that walking and transit account for 17% while cycling sits at 3%.
• Zero Waste - reducing solid waste per capita by 40% going to landfill or incinerator. Currently metro Vancouver produces 1.5 tonnes of solid waste per capita annually.
• Easy Access to Nature - every person living within a 5 minutes walk of a park, beach or greenway or other natural space (today the figure is 71%), and planting an additional 150,000 trees.
• Lighter footprint - reducing per capita ecological footprint by 33%. Ecological footprint measures how much of the regenerative capacity of the earth is used by human activities.

3) Human Health
Targets set in this area include:

• Clean Water and Water Conservation and Stewardship- reducing per capita consumption by 33 % and meeting or beating the strongest drinking water standards set by B.C., Canada, and World Health Organization (WHO). Reducing consumption could be done through increased metering (currently only 14% are metered) and volume-based pricing.
• Clean Air - meeting or beating WHO air quality guidelines.
• Local Food - reducing the carbon footprint of our food by 33 % per capita, by adopting "Buy Local" campaigns, and building sustainable urban food systems.

The City of Vancouver has also announced its new branding of the city as "Vancouver Green Capital", which will be featured at the Vancouver House during the 2010 Games.

BC's Northwest Transmission Line Project to receive up to $130 million under the Green Infrastructure Fund

Almost one year ago, British Columbia Premier Gordon Campbell announced that the Province would start the environmental assessment process and First Nations consultation on the Northwest Transmission Line, which consists of a 287 kV line which would extend 335 kilometres into the Northwest portion of the province from Terrace to Meziadin Junction and north to Bob Quinn Lake.

The estimated $404 million project which is expected to be ready for construction in early 2010 has been given a serious boost as a result of yesterday's announcement by the federal government that it has been selected as a priority for funding of up to $130 million under the Green Infrastructure Fund, conditional upon the signing of a contribution agreement with the British Columbia government under the fund.

The Northwest Transmission Line will provide multiple benefits:

As the area surrounding the project has a significant potential to generate green power, local communities will be able to access clean electricity in the future, reducing their reliance on diesel generation and resulting greenhouse gas emissions. There is currently an estimated 2,000 MW of renewable energy in the area from small hydro, geothermal, wind and biomass sources and the project could immediately serve a number of potential generation projects representing approximately 500 MW being considered under British Columbia's current Clean Power Call.

The project also provides access to the electricity grid for potential customers, which in turn will support and promote economic diversification in the area. According to the Mining Association of BC, the project has the potential to attract $15 billion in new capital investments and create almost 11,000 jobs.

Lastly, construction of the transmission line will be a key step in a potential interconnection between southeast Alaska and the North American transmission grid via British Columbia.

BC Hydro delays its decision in Clean Power Call

BC Hydro will not award electricity purchase agreements ("EPAs") under the Clean Power Call until later this fall or early this winter, the utility announced yesterday. BC Hydro has asked the B.C. utilities Commissions ("BCUC") for permission to extend its Competitive Electricity Acquisition Process deadline to December 31, 2009.

BC Hydro said that it needed more time to satisfy itself that proponents had conducted adequate consultations with First Nations that could be affected by the proposed projects. Proponents may be asked to meet "evolved" requirements and to provide additional information before BC Hydro awards the EPAs.

The Globe and Mail reports that Hydro spokesman Dag Sharman said that the delays are in no way linked to the recent rejection of BC Hydro's Long Term Acquisition Plan by the BCUC. However, Tom Hakney, vice-president for policy at the BC Sustainable Energy Association, was not so sure: "It's hard to say what BC Hydro will do. I think the commission's ruling has created, certainly, some uncertainty around the clean call and we will just have to wait and see if BC Hydro chooses to go ahead or not."

BC Hydro is delving deeper into First Nations issues in the wake of the B.C. Court of Appeal's decisions in Carrier Sekani Tribal Council v. British Columbia (Utilities Commission) and Kwikwetlem First Nation, et al v. British Columbia (Utilities Commission). The court clarified that the BCUC has both the jurisdiction and the obligation to determine the constitutional question of whether project proponents have adequately consulted with and accommodated First Nations. BC Hydro and the applicants to the Clean Power Call therefore risk having projects disallowed by the BCUC if consultations are deemed to be inadequate.

In its announcement, BC Hydro advised that it may require additional information from some applicants. It will also be posting additional information about its "evolved requirements" for First Nations consultations on the Clean Power Call website.

Proponents may therefore find themselves in a position of having conducted what are now deemed to be inadequate consultations. It is uncertain whether the extended deadline will leave sufficient time for proponents to go back to the relevant First Nations for additional consultations.

BC's first wind farm starts spinning

The first of 34 turbines at AltaGas Income Trust's Bear Mountain Wind Farm began feeding power into BC's electricity grid this week. According to a press release by AltaGas, the project is ahead of schedule. In addition to the one spinning turbine, 24 other towers have been erected and are awaiting installation of their blades. The project is expected to achieve full commercial operation by November of this year.

David Cornhill, Chairman and CEO of the AltaGas Income Trust describes this week's development as "an important milestone for AltaGas and for renewable power in British Columbia." He added that, "AltaGas is committed to growing its renewable power generation capacity. With 1,500 MW of wind power opportunities and an additional 400 MW of run-of-river power opportunities under study or development, AltaGas is well positioned to be a leader in clean energy generation."

B.C., which enjoys an abundance of hydropower but still relies heavily on fossil fuels to generate electricity, is a latecomer to the wind power game in Canada. Quebec, Ontario, Manitoba, Saskatchewan, and Manitoba have installed capacity ranging from 103 MW in Mantoba to 781 MW in Ontario. The Bear Mountain project is expected to deliver 102 MW to the B.C. grid.

Davis Helps Bring Bioenergy to BC's Power Grid

Davis client, Canfor Pulp Limited Partnership, was one of four biomass projects chosen by BC Hydro to add electricity to BC's power grid. The four projects will burn wood waste to generate year-round electricity, providing carbon neutral fuel for 52, 000 homes. Canfor is expected to begin contributing power to the province soon. Davis lawyers Brian Hiebert and Will Todd acted for Canfor.

To read the Vancouver Sun article on this subject, please click here.

BC releases Energy Plan progress report

On April 9, British Columbia released a progress report on the implementation of the BC Energy Plan.

The province highlighted that it has completed several initiatives, including the following:

• Rolled out the LiveSmart BC: Efficiency Incentive Program, which has provided energy-efficiency labels to over 10,000 houses, giving homeowners access to rebates and incentives to improve the energy efficiency of their homes;
• Enacted the Greenhouse Gas Reduction Targets Act to make the broad public sector carbon neutral by 2010;
• Required utilities to implement demand side management measures, which has prompted BC Hydro to apply to BCUC for approval of a Long-Term Acquisition Plan that includes ambitious demand-side management program.
• Prompted BC Hydro to procure more renewable power by conducting the Clean Power Call and the Bioenergy Call for Power Phase 1, which approved 4 new projects (Phase 2 is underway), and by establishing a Standing Offer Program for projects under 10 MW;
• Issued Special Direction 10 to BCUC to ensure BC Hydro can pursue self-sufficiency goals;
• Provided 34 clean energy projects with $47 million in funding from the Province's Innovative Clean Energy (ICE) Fund

In his preface to the report, Blair Lekstrom, Minister of Energy, Mines and Petroleum Resources, notes that, "while we're proud of the achievements to date, there is still much work to be done." Accordingly, the report also describes many initiatives that are underway or planned for the future.

BC Hydro announces Phase 2 Bioenergy Call for Power

On March 5, 2009, BC Hydro launched the second phase of its Bioenergy Call for Power. BC Hydro revealed that there will be two streams to the Phase 2 call:

"The first stream is a competitive call for larger-scale biomass projects. Any form of biomass will be eligible and it will include wood waste sourced from new forest tenure enabled through provincial legislation in May 2008. The target is to acquire 1,000 gigawatt-hours per year of energy through this stream.

The second stream will focus on innovative, community-level electricity supply solutions using biomass. Through a request for qualifications, BC Hydro will seek to identify at least two such projects that can provide cost-effective electricity for ratepayers, as well as other quantifiable, local benefits such as improved reliability."

Read the full press release here. See BC Hydro's Bioenergy Call for Power homepage for updates.

Interested bidders may want to check out BC Hydro's report on the Phase 1 call, which it recently filed in its LTAP proceeding before the BC Utilities Commission.

BC Hydro "clarifies" the Clean Power Call target

Clean Power Call bidders and clean power supporters in BC will be relieved to learn that BC Hydro appears to have softened its position with respect to the lower acquisition target of 3,000 GWh per year it announced at the end of last year. In a letter to the BC Utilities Commission dated January 12, 2009, BC Hydro suggested that it may be willing to award EPAs "up to or greater than the original target of 5,000 GWh per year if the EPAs are cost-effective."

Recall that in late December, BC Hydro asked the BCUC for permission to claw back its Clean Power Call target from 5,000 GWh to 3,000 GWh (see this related posting). No doubt this request was received poorly by the independent power producers who had submitted bids based on the original target.

BC Hydro offered the following explanation for its latest change of position:

""The Evidentiary Update includes a load forecast which projects future electricity needs in British Columbia within a large range of outcomes. Even this large range may not necessarily capture all of the uncertainties inherent in possible future demand for electricity. These uncertainties include those associated with the recovery of the economy which is related to world economic events, as well as opportunities created by British Columbia initiatives. Further uncertainties and opportunities result from the potential future demand created by the transformation to a low carbon economy, a British Columbia initiative as well as a world-wide trend. These further uncertainties and opportunities include the switching from other fuels to electricity for personal transportation, mass transit, heating and other applications. As a result of all of these uncertainties and opportunities, and the 2007 Energy Plan's goal to achieve electricity self-sufficiency by 2016, BC Hydro does not want to limit its opportunities to acquire cost-effective renewable power through competitive processes with independent power producers.""

BC Hydro claws back Clean Power Call target

BC Hydro has asked the BC Utilities Commission ("BCUC") for an amended order slashing the target for the Clean Power Call from 5,000 gigawatt hours (GWh) per year to 3,000 GWh per year. The request was included in an Evidentiary Update to the 2008 Long-term Acquisition Plan ("LTAP"), filed with BCUC by BC Hydro on December 22, 2008.

The request for a 40% cut comes just weeks after the November 25 deadline for Clean Power Call proposals. The request will no doubt come as a shock to the 43 registered proponents who submitted a total of 68 proposals for BC Hydro's consideration. Collectively, these proposals represent about 17,000 GWh per year of production. With a reduced target, competition amongst the proposals will now be even more intense.

BC Hydro's request comes as a result of adjustments to its load forecast and Demand Side Management Plan based on what it refers to as "recent economic events" as well as the expected results of the Bioenergy Call Phase I RFP (BC Hydro announced the successful proposals on December 8). While the new forecasts may reflect BC's needs, some question whether the reduced target overlooks the opportunity to export power to other markets.

Public hearings before the BCUC will commence February 19, 2009. The status of the application can be found on the BCUC website.

WCI Draft Cap and Trade Design Prioritizes Forestry, Agriculture and Waste Management Offsets

Submitted by Grant Boyle

WCI’s July 2008 draft design recommendations suggest capped emitters will be able to use offset credits to meet 10% of compliance obligations.

Project types under “priority” consideration include: Agriculture (soil sequestration and manure management); Forestry (afforestation/reforestation, forest management, forest preservation/conservation, forest products); and Waste management (landfill gas and wastewater management).

According to the proposal, project types that reduce emissions covered by the cap-and-trade system ( such as electricity projects) would not be eligible to create offsets.

Starting in 2009 WCI Partners will coordinate to develop and approve standard protocols for the project types.

WCI Partners may approve and certify offset projects located throughout Canada, the United States, and Mexico, where projects are subject to comparably rigorous oversight, validation, verification and enforcement as those located within the WCI jurisdictions.

In the case of offset credits under the Kyoto Protocol's Clean Development Mechanism (CDM) and Joint Implementation (JI), the WCI Partners may establish “added criteria to ensure similar rigor to WCI approved/certified offset projects or other requirements”. The WCI Partners are also considering a method that restricts the use of offsets from projects located outside WCI jurisdictions for compliance purposes in the WCI.

BC Public Sector may purchase $24 million in offsets to be carbon neutral by 2010

Submitted by Grant Boyle

On June 26 B.C. released its Climate Action Plan, which outlines strategies that will help the province reach 73% of its goal of reducing GHGs 33% by 2020 from 2007 levels. The Plan outlines existing and upcoming policy initiatives that are intended to help reduce emissions from transportation, buildings, waste, agriculture, industry, energy and forestry in the province.

One of the legislated requirements highlighted under the Plan is for the province’s public sector to be carbon neutral by 2010. Under the BC Greenhouse Gas Reduction Act, all provincial ministries, health authorities, school districts, colleges, universities, Crown Corporations and other government agencies must be carbon neutral as early as 2010.

Public sector organizations must publically report emissions, reduce emissions and offset any remaining emissions. The government will set up the Pacific Carbon Trust as a new Crown Corporation to meet public sector demand for offsets. The 2008 Budget provides $24 million to invest in GHG-reduction projects. Although, the government has not indicated what type of offsets the Trust will accept, the Plan says that the initial mandate of the Trust is to offer “credible, low cost offsets” to the public sector. In light of Victoria’s indication that no regulations to implement BC’s Greenhouse Gas Reduction Cap and Trade Act will pass this year, the Pacific Carbon Trust’s mandate could drive the first compliance market for carbon offsets in the province, creating new opportunities for carbon reduction project developers.

The 2008 Budget also allocates around $100 million to support energy efficiency upgrades in public buildings and $15 million for communications tools that reduce the need to travel as measures to reduce emissions from the public sector.

BC Energy to US Market - Juan de Fuca Cable Permit Could Clear the Congested Way

On June 12, 2008 Sea Breeze Power Corp. announced that the US Department of Energy issued a Presidential Permit (DOE Permit) for the Juan de Fuca Cable. The Cable is a proposed 550 MW High Voltage Direct Current Light® international submarine transmission cable that would connect Vancouver Island and Washington State’s Olympic Peninsula. The Cable would be an alternative to traditional high voltage overhead lines and could be used for the transmission of electricity bought and sold between BC and US markets to the south, such as California. Currently, electricity is transmitted through a single congested pathway referred to as the I-5 Corridor.

The DOE Permit is required for any proposal to construct an electric transmission line across the U.S. international border and is the US counterpart to the Canadian National Energy Board’s issuance of a Certificate of Public Convenience and Necessity. The Juan de Fuca Cable is being developed through a joint venture between Sea Breeze Power Corp., Boundless Energy NW, Inc., and United States Power Fund, LP, a private equity fund managed by Energy Investors Funds (“EIF”).

The timing of the DOE Permit coincides with the coming announcement of the results of Pacific Gas and Electric’s $14 million US study of B.C.'s vast green electricity potential - and opportunities to bring that power to the American market.

BC launches Standard Offer Program for clean power projects between 0.05 and 10MW

Posted by Andrew Lord

BC continues to deliver on the BC Energy Plan: A Vision for Clean Energy Leadership. On April 11, BC Hydro launched a Standard Offer Program (the "BC SOP"). The BC SOP is intended to complement BC's traditional power tender process by giving smaller developers a streamlined way to sell power to BC Hydro.

The BC SOP sets out several eligibility requirements, including but not limited to the following:

• The project must be located in BC;
• It must have a nameplate capacity between 0.05 and 10 MW;
• The energy generated by the project must be clean, renewable or high efficiency co-generation;
• Only proven generation technologies are eligible (but nuclear is excluded). Proven generation technologies must meet specific criteria in the SOP Rules, particularly that the technology has been used in at least three plants, each for at least three years, to a standard of reliability generally required by Good Utility Practice (as defined in the Standard Form Electricity Purchase Agreement);
• All prescribed permits must be obtained before an application is submitted;
• The developer must have rights to use the proposed project site and that site must be appropriately zoned; and
• The project must also be able to interconnect to the grid. However, a formal interconnection study is not required until the project has been pre-screened by BC Hydro.

For developers, a key feature of the BC SOP is that BC Hydro will enter into a long term power purchase agreement. The proposed Standard Form Electricity Purchase Agreement gives developers the option of selecting a term of anywhere from 20 to 40 years (in whole years).

The pricing mechanism in the BC SOP is significantly different from that in Ontario's Standard Offer Program. In Ontario, the price per kilowatt hour depends on the type of generation technology used. For example, wind power fetches $0.11/kWh whereas photovoltaic power commands $0.42/kWh. Under BC's program, the price will not vary by generating technology. Instead, the price will be based on the following:

1. A base price that will depend on where in the province the power will be delivered to BC Hydro. The base prices listed in the SOP Rules currently range from $0.06994/kWh in Peace Region to $0.08423/kWh on Vancouver Island;


2. A CPI escalation of the base price up to the year when the Electricity Purchase Agreement is signed;


3. A time of day and month price adjustment. The adjustments currently range from a factor of 126% for Heavy Load Hours in February to 72% for Light Load Hours in July; and


4. The price of Environmental Attributes (if applicable). Currently, that price is set at $0.0310/kWh (to be CPI-adjusted) for any project that receives an Environmental Certification and delivers power to BC Hydro. The adjustment in point (3) will not be applied to the price of Environmental Attributes.

The price paid for Environmental Attributes reflects the fact that the Standard Form Electricity Purchase Agreement provides that the developer must assign all rights to Environmental Attributes to BC Hydro. This provision means that developers cannot sell the Environmental Attributes to other market players as part of voluntary carbon offsets, BC Emissions Reductions Units (under BC's proposed cap-and-trade law), renewable energy certificates (RECs), or other instruments that are based on Environmental Attributes. The provision may therefore limit a developer's flexibility in obtaining carbon financing for their project. However, the approval process under the BC Standard Offer Program provides developers with an opportunity to request changes to the Standard Form Electricity Purchase Agreement. Some developers may attempt to negotiate out of the Environmental Attributes assignment clause.

The SOP also provides for some cost-sharing. The developer is responsible for certain interconnection costs while BC Hydro will bear the costs of certain network upgrades.

For more information about the BC SOP, refer to the Standing Offer Program Rules and the Standard Form Electricity Purchase Agreement.