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British Columbia Hydro and Power Authority

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British Columbia Hydro and Power Authority

BC Hydro
Crown Corporation
Industry Electric utility
Founded 1961
Headquarters Vancouver, British Columbia, Canada
Area served British Columbia
Key people Charles Reid, President & CEO
Products Electricity generation, transmission and distribution
Revenue C$3.822 billion (2010)
Net income Increase C$447 million (2010)
Total assets Increase C$16.5 billion (2010)
Owner(s) Government of British Columbia
Employees 6163 (2010)
Website www.bchydro.com

The BC Hydro and Power Authority is a Canadian electric utility in the province of British Columbia, generally known simply as BC Hydro. It is the main electric distributor, serving 1.8 million customers in most areas,[1] with the exception of the City of New Westminster, where the city runs its own electrical department[2] and the Kootenay region, where FortisBC, a subsidiary of Fortis Inc. directly provides electric service to 213,000 customers and supplies municipally owned utilities in the same area.[3] As a provincial Crown corporation, BC Hydro reports to the BC Ministry of Energy, Mines and Petroleum Resources, and is regulated by the British Columbia Utilities Commission (BCUC). It is mandated to provide "reliable power, at low cost, for generations." B.C. Energy Minister Rich Coleman said that increases would not be as high as the 10 per cent per year for five years that Hydro had announced March 2011.[4]

BC Hydro operates 30 hydroelectric facilities and three natural gas-fueled thermal power plants. In 2009 86.3 per cent of the province's electricity was produced by hydroelectric generating stations, which consist mostly of large hydroelectric dams on the Columbia and Peace Rivers. BC Hydro's various facilities generate between 43,000 and 54,000 gigawatt hours of electricity annually, depending on prevailing water levels. BC Hydro's capacity is about 11,000 megawatts.[5]

Electricity is delivered through a network of 18,286 kilometers of transmission lines and 55,254 kilometers of distribution lines. For the 2008-2009 fiscal year, the domestic electric sales volume was 50,799 gigawatt hours and net income was $366 million, resulting in a return on equity of 11.75 per cent. As of March 31, 2009, BC Hydro and its subsidiaries employed 5844 full-time and part-time employees.[6]

History

BC Hydro was created in 1961 when the government of British Columbia, under Premier WAC Bennett, passed the BC Hydro Act. This act led to the amalgamation of BC Electric Company and the BC Power Commission, and the creation of the British Columbia Hydro and Power Authority (BCHPA).[7]

The BC Power Commission was established with the Electric Power Act in 1945 by Premier John Hart. The mandate of the Power Commission was to amalgamate existing power and generating facilities across the province not served by BC Electric, and to extend service to the many smaller communities without power.[8]

BC Electric Company began as the British Columbia Electric Railway (streetcar and lighting utility) in Victoria, Vancouver and New Westminster in 1897. Power was generated by coal-fired steam plants. Increasing demand in the Edwardian boom years meant BC Electric sought expansions through Hydro power at Buntzen Lake, and later at Stave Lake. Sensible growth and expansion of the power, streetcar and coal gas utilities meant that BC Electric was a major company in the region. An English financier named Robert Horne-Payne secured the funding and created the large company from what had been a patchwork of small regional electric railway and steam, hydro and diesel plants.

Also at this time, sawmills and factories converted to electricity, further increasing load. BC Electric erected more local hydro stations around the province. Similarly, small towns also built and operated their own power stations. More power transmission lines were built. Dams and hydro-electric generating stations were built on the Puntledge, Jordan, and Elk rivers in the 1920s.

BC Electric created one of the largest streetcar and interurban systems in the world with some 200 miles of track running from Point Grey to Chilliwack. There were both city street cars and interurban cars servicing Richmond, Burnaby, New Westminster, Vancouver, North Vancouver, and Victoria.

By the First World War, private cars and jitneys were beginning to affect streetcar traffic. The expansion of private automobile ownership in the 1920s further constrained the expansion of streetcar lines. New dams were planned, including the diversion from the Bridge River to Seton Lake, near Lillooet, but the economic depression of the 1930s restricted business expansion. Also with the depression came an increase in the ridership, and a decrease in the maintenance of the streetcar system.

In 1947 the BC Power Corporation completed John Hart Generating Station at Campbell River. In the early 1950s the ageing streetcars and interurban trains were replaced by electric trolley buses, and diesel buses. BC Electric finally completed the Bridge River Generating Station in 1960. BC Electric and later BC Hydro continued to operate the transit system by funding it with a small levy on the electric bill, until the transit system was taken over by BC Transit in 1980.

In 1958 BC Electric began construction of the Burrard Generating Station near Port Moody. It opened in 1961 and, although it is now fueled only by natural gas, and operated only intermittently when needed, it continues to generate controversy due to its proximity to Vancouver and its associated greenhouse gas emissions. In 2001 it represented over 9% of BC Hydro's gross metered generation.[9]

On August 1, 1961, just days after company president Dal Grauer died, the BC government passed the legislation which changed BC Electric from a private company to a crown corporation known as BC Hydro. In 1988 BC Hydro sold its Gas Division which distributed natural gas in the lower mainland and Victoria to Inland Natural Gas. Inland was acquired by Terasen Gas in 1993.

Modern era

Between 1960 and 1980, BC Hydro completed six large hydro-electric generating projects. The first large dam was built on the Peace River near Hudson's Hope. The WAC Bennett Dam was built to create an energy reservoir for the Gordon M. Shrum Generating Station, which has a capacity of 2.73 gigawatts of electric power and generates 13,000 gigawatt-hours per year (1.5 GW) in energy. When it was completed in 1968, the dam was the largest earth-fill structure ever built. The Williston Lake reservoir is the largest lake in British Columbia. A second smaller concrete dam was later built downstream, closer to Hudson's Hope for the Peace Canyon Generating Station which was completed in 1980.

Under the terms of the Columbia River Treaty with the US, BC Hydro built a number of dams and hydro-electric generating stations including two large projects at Mica and Revelstoke on the Columbia River. The Keenleyside Dam on the Columbia River north of Castlegar and the Duncan Dam north of Kootenay Lake were also built under the same treaty and are used mainly for water control. Two generators were installed at Keenleyside in 2002, though these are owned and operated by the Columbia Power Corporation (a separate Crown Corporation). Kootenay Canal Generating Station on the Kootenay River between Nelson and Castlegar was completed in 1976. The Seven Mile Dam and Generating Station on the Pend d'Oreille River near Trail were completed in 1979.


In the late 1970s and early 1980s BC Hydro investigated the feasibility of geothermal power production at Meager Creek, north of Pemberton. They concluded from their testing that the underground rock wasn't permeable enough to justify large-scale production of electricity.[10] Around the same time, BC Hydro initiated a project to develop a coal-fired thermal generating station at Hat Creek near Cache Creek, but abandoned the effort in 1981 due to strong environmental opposition.

In 1989 the Power Smart and Resource Smart programs were initiated by BC Hydro to promote energy conservation as an alternative to the cost of creating new generating facilities. Since 2001, BC Hydro has focused on its conservation and energy efficiency programs, re-investing in its existing facilities, and purchasing clean, renewable energy from Independent Power Producers. According to the "British Columbia Energy Plan",[11] released in 2007, BC Hydro must ensure clean or renewable electricity generation continues to account for at least 90 percent of total generation. BC Hydro's hydroelectric production meets 78% of their electricity requirements, with the balance coming from burning natural gas and external transactions.[12]

Organization and financial performance

In 1980 the BC Government established the BC Utilities Commission (BCUC) to regulate public energy utilities and to act as an independent, quasi-judicial regulatory agency regarding energy rates. In 2003 the BC government passed several pieces of legislation to redefine and regulate power utilities in British Columbia. The Transmission Corporation Act created the British Columbia Transmission Corporation (BCTC) which plans, operates and maintains the transmission system owned by BC Hydro. The BC Hydro Public Power Legacy and Heritage Contract Act, while recognizing the value of low cost electricity produced by BC Hydro's existing "heritage assets," requires BC Hydro to meet the province's future needs for additional power through private developers and operators. These acts in conjunction with the government’s 2002 BC Energy Plan have allowed Independent Power Producers (IPPs) to sell power to BC Hydro, which is required by law to buy it from them even at a loss.[13] In 2011 BC Hydro spent $567.4 million on electricity from IPPs. In 2013 those purchases will be $781.8 million in 2013 and $939.8 million in 2014.[14]

Also in 2003, BC Hydro privatized the services provided by 1540 of its employees in its Customer Service, Westech IT Services, Network Computer Services, Human Resources, Financial Systems, Purchasing, and Building and Office Services groups. These services are now provided under contract by Accenture.[15]

While BC Hydro initially looked at Site C on the Peace River near Fort St. John in the late 1950s, it wasn’t until 1982 that it submitted a Site C development project to the British Columbia Utilities Commission (BCUC). It was turned down by the BCUC at that time. Another attempt to revive it in the 1990s was blocked by environmental concerns.[16] In 2004 the BC government's Energy Plan[17] instructed BC Hydro to begin discussions with First Nations, the Province of Alberta and communities to discuss Site C as a future option.[18] Local residents strongly oppose the project, which is seen to only benefit the Lower Mainland and US markets at great cost to the region and its economy and society, and have their hopes on blocking the project pinned on an environmental review due in 2011.[16][19]

Exports

BC Hydro exports and imports electric power through its wholly owned power marketing and trading subsidiary, Powerex, which was established in 1988. Powerex also markets the Canadian Entitlement energy from the Columbia River Treaty.[20] BC Hydro belongs to a power sharing consortium which includes electric utilities in Alberta, Washington, Oregon, Idaho and California.

Financial performance

Financial data 2000-2010 (year ending on March 31)
millions of Canadian dollars [21][22][23]
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Revenues 3,822 4,269 4,210 4,192 4,311 3,725 3,424 3,107 6,311 7,889 3,480
Net earnings 447 365 369 407 266 402 98 418 403 446 416
Plants, property & equipment 14,104 12,099 11,154 10,426 10,023 9,933 9,844 9,793 9,510 9,361 9,320
Net long-term debt 10,696 9,135 7,519 6,916 6,627 6,583 6,853 6,849 6,889 6,214 7,005
Retained earnings 2,621 2,221 1,865 1,783 1,707 1,688 1,634 1,609 1,529 1,459 1,385
Debt/Equity ratio 80:20 81:19 70:30 70:30 70:30 68:32 70:30 72:28 72:28 70:30 74:26

Renewable energy and conservation initiatives

BC Hydro's Power Smart program encourages energy conservation among its residential, commercial, and industrial customers. It also promotes energy saving retail products and building construction, and includes a Sustainable Communities Program. Its in-house Resource Smart program is used to identify and implement efficiency gains at existing BC Hydro facilities. BC Hydro also practices energy conservation at its generating facilities through the continuous monitoring and efficient use of the water resources used to power its generators.

BC Hydro is committed by the BC government's Energy Plan to achieve electricity self-sufficiency by 2016, with all new generation plants having zero net greenhouse gas emissions by the same year.[24] The government will set policy around reaching zero net emissions through carbon offsets from other activities in British Columbia.[25] Over half of the power needed to satisfy the demand gap is to come from conservation and retrofitting of existing facilities; the remainder will come from both private and public sources.

Hydro has also entered into energy purchase contracts with a new category of company created by special legislation, Independent Power Producers (IPPs) to buy electricity generated from intermittent renewable sources, mainly from small capacity run of river hydro and more recently, wind power, wood residue energy, and energy from organic municipal waste.[26] There has been some criticism of this policy on the basis that it will result in Hydro paying significantly higher rates to private producers than it would have if the power were self-generated.[27][28]

BC Hydro has collaborated with a number of groups to promote energy conservation including the Gulf Islands Film and Television School (GIFTS).

See also

Energy portal
Canada portal

References

External links

  • BC Hydro company website
  • Power Pioneers
  • British Columbia Transmission Corporation
  • BC Explorer - A Digital History of the Northwest
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