Well, that’s a shocker – BC Hydro wants an extra year to develop its next long-term plan. Approving the request is a bad idea, but the BCUC will probably do it anyway.
Background
In its decision approving BC Hydro’s 2021 Integrated Resource Plan in March 2024, the BC Utilities Commission (BCUC) directed the utility to file its next plan by October 31, 2025.
In that proceeding, BC Hydro proposed a planning cycle of 18 months to be “better able to match the potential pace of change in this time of energy transition.” The utility even asked to submit “targeted, rather than comprehensive” updates to the 2021 plan to cut down on the work involved.
The proposal for more frequent and targeted updates to future plans was “strongly” supported by the BCUC, as it would enable BC Hydro “greater flexibility to respond to changes” in a period of “increasing change and uncertainty.”
However, the BCUC did acknowledge the possibility of “significant and unforeseeable changes which could substantially alter BC Hydro’s planning assumptions” and gave them to opportunity to request a change to the October 2025 date.
Give them an inch…
Which they have just requested.
BC Hydro explains that recent developments mean their current (2024) load forecasts no longer capture the “potential uncertainty around resource planning.” They want another year to develop new load scenarios that “better reflect the current uncertainty” before submitting their next long-term plan.
These “recent developments” include the current trade dispute between Canada and the US; reduced BC population forecasts; and changes in approaches to greenhouse gas (GHG) emission reduction. The federal government is widely cited, being blamed for reducing immigration targets, ending electric vehicle subsidies, and considering changes to the carbon tax.
What’s wrong with this picture?
First, it’s “disappointing” that it still takes BC Hydro a year to recalculate its load forecast. This might, barely, have been acceptable in the 1960’s when the utility was first created. But we are now in an age where ChatGPT can develop a new iteration of its artificial intelligence applications in mere months. Heck, you can create a human being in less time than it takes BC Hydro to revise its load forecast.
The BCUC shouldn’t be willing to accept this, and it’s shocking that BC Hydro’s management is. I wonder if the new BC Hydro board chair, fresh from a couple of decades of private sector management experience, thinks this is acceptable?
Second, the requested delay suggests that BC Hydro doesn’t actually understand how to do “long-term” planning. The foundation of a long-term plan is a wide-enough range of scenarios to encompass any reasonable eventuality. That way, the public can have some confidence that whatever “developments” may arise, the utility knows how it will continue to provide safe and reliable service.
The world is never going to stop changing for long enough for BC Hydro to create a plan based on some fixed set of assumptions.
Third, BC Hydro hasn’t done a convincing job of explaining why these “recent developments” should require such a complete revision to its plan. Every example they provide would either reduce or delay increases to demand. This might have economic consequences, such as increased rates, but poses few operational problems. BC Hydro’s biggest headache is how to satisfy more demand, not less.
If BC Hydro’s current plan doesn’t explain how it would react to less demand, then perhaps it’s not very solid?
What’s really going on?
But maybe that’s a clue to the real reason for the requested delay. The new Minister of Energy is now responsible for the CleanBC plan as well (before last fall’s election, that came under the Environment ministry). Has he realized that BC Hydro has no credible plan for how it will generate enough electricity to achieve CleanBC’s goals?
BC Hydro isn’t the first BC public sector body to take advantage of the current US trade dispute to backtrack on previous commitments. The provincial government recently axed its election promise to spend $1.8 billion handing out “grocery rebates”, blaming the possibility of US trade tariffs rather than the $9.4 billion deficit it created prior to BC’s October election. But perhaps BC Hydro is taking advantage of this “crisis” for other reasons? Is something else going on here?
I’d like to think that the Minister of Energy and the new BC Hydro board chair are cooking up something big. If they’re working on a serious plan to increase electricity generation, reduce GHG emissions and expand our economy, all without increasing our cost of living, I’d be happy to wait a year to hear it.
If not, then the BCUC should demand BC Hydro submit its new plan by October 2025, for all the reasons the BCUC approved the faster planning cycle in the first place.
Reap what you sow
To some extent, the BCUC has itself to blame for the situation we’re now in.
The regulator meekly approved the utility’s last plan as filed, despite its numerous deficiencies. For instance, the BCUC failed to require BC Hydro to forecast a demand scenario where the government actually achieves its full CleanBC ambitions, including electrification of north coast mining and liquified natural gas.
The BCUC also accepted a set of “placeholder” options for where BC Hydro might find more generation if it needed it, trusting it to come up with the answers in “upcoming long-term resource plans”, which might not now be as “upcoming” as we had hoped.
If the BCUC had been firmer last time, BC Hydro might have been forced to think through its plans more comprehensively. It might even have been nudged into improving the timeliness of its forecasting process. As it is, BC Hydro is probably expecting the BCUC to rubber stamp this request for a delay, much as it approved the 2021 plan.
Unfortunately, that’s probably what will happen.