It’s time to gaze into the regulatory crystal ball. Here are some predictions for 2025, from the safe bets to the really long shots.
1. The BC government will fail to meet its 2025 GHG emission reductions target
Likelihood: Take this one to the bank.
Let’s start with an easy one. The government still maintains it is aiming to reduce greenhouse gas (GHG) emissions by 16 percent by 2025. Even assuming they mean the end of 2025 and not the beginning, this is delusional.
The most recent figures (published in 2024 but using 2022 data) show that BC’s GHG emissions are exactly where they were in 2007, the baseline for the 16 percent reduction target. Such a reduction in one year would require the equivalent of closing down all heavy industry and agricultural activity in the province.
A shock to the economy of this magnitude doesn’t bear thinking about (even the COVID-19 pandemic only reduced GHG emissions by 6 percent, before the economy bounced back). So, let’s hope the government isn’t thinking about it.
2. The BCUC will accept BC Hydro’s long-term resource plan for Fort Nelson
Likelihood: A racing certainty.
This prediction isn’t a lot riskier than the previous one. The BC Utilities Commission (BCUC) has approved just about everything BC Hydro has asked for recently, including all four requests to roll back previous regulatory decisions that BC Hydro made shortly after the government replaced the BCUC chair in September 2023.
The BCUC has already denied the BC Sustainable Energy Association intervener status in this proceeding, so they won’t be asking any awkward questions, and initially even the interveners who were accepted initially had no right to ask questions or submit a final argument (although the BCUC has since relented).
The BCUC’s rejection in early 2024 of a BC Hydro request to spend up to $130 million, on the ground that there was insufficient justification, stands out as a lonely exception in recent times. I doubt we’ll see many decisions like that in 2025.
3. BC’s climate change targets will be reset
Likelihood: As safe as the BC government’s bond rating
In November a new minister of energy was appointed in BC. Adrian Dix has a reputation as a serious politician, who will presumably not want to spend his time and political capital defending the indefensible – such as the target to reduce BC’s GHG emissions by 16 percent in one year. So, I predict he will abandon this 2025 target, and it could be as simple as dropping it from the website.
It would be slightly trickier to change the 2030 and 2040 targets for GHG emission reductions, 40 and 60 percent respectively, which are set out in the Climate Change Accountability Act. But a change like this is not unheard of in BC – the predecessor to this act was repealed in 2018, presumably because by that point there wasn’t a snowball’s chance in hell of achieving its 33 percent reduction target by 2020.
The BC government would be in good company if it took this route. The federal government recently backed away from its goal of a clean electricity grid nationally by 2035, claiming the former goal was “too stringent” and “hard to achieve without Canadians incurring a very high cost.”
Another candidate for resetting is the target for annual sales of zero-emission vehicles – 26 percent by 2026. We’re getting awfully close to 2026, and according to Stats Canada, sales of zero-emission vehicles in BC actually fell in the third quarter of 2024 compared to 2023, and have so far only reached 22.7 percent of total vehicle sales. The 2026 target might be achievable, just, but it’s hard to see achieving the 2030 target of 90 percent.
4. The approach to climate change will become more balanced
Likelihood: At least even money
Canadians appear to be growing weary of the priority given to environmental issues. For instance, a recent survey conducted on behalf of the University of Ottawa’s Positive Energy program shows support for prioritizing environmental issues over economic growth and jobs has fallen from 67 percent in 2015 to 46 percent today. A similar poll in 2023 showed that only a “small fraction” of people considered climate change as Canada’s top issue, and only 40 percent were willing to change their behaviour.
Politicians are starting to realize they might be getting too far ahead of public opinion. Late in 2023, for example, the federal government exempted heating oil from its signature carbon tax because it was becoming increasingly unaffordable – ironic, since that is rather the point of the tax. And just prior to last year’s provincial election the BC government reversed its long-standing support for its carbon tax to fight off a challenge from the opposition party, whose platform was to abandon the tax.
All this suggests that governments will be a bit more cautious about how fast they push the environmental agenda in 2025, and how this is balanced with other public policy priorities, such as economic growth. If people aren’t ready to pay the cost associated with fighting climate change, governments will have to slow down (the ones that want to get re-elected, anyway).
5. More attention will be paid to whether BC Hydro’s electricity is actually clean
Likelihood: An outside chance
There’s a general view, widely promoted by the provincial government, that BC’s electricity is “clean”. It’s impossible to find a press release mentioning BC Hydro that doesn’t make this claim – the recent announcement by the premier of the results of BC Hydro’s procurement of new electricity uses the word “clean” 23 times, possibly a new provincial record.
But is it true? Is BC’s electricity really “clean”? The issue surfaced last fall when the City of Vancouver was debating whether to ban natural gas for building heat– if the electricity that replaces natural gas isn’t clean, that weakens the argument for electrification.
There are many questions to answer. Is imported electricity from the US clean? What about electricity generated by wind and solar facilities in BC where the clean energy rights, known as renewable energy credits, have been sold separately from the electricity? And what about all those GHG emissions from the construction of the Site C dam?
The answers are not at all clear, but I sense that people are starting to get interested.
6. There will be a court challenge to a BCUC decision this year
Likelihood: My favourite long-odds bet
The BCUC’s decisions in 2024 were becoming a tad lopsided, appearing to favour applications by government-owned BC Hydro over any and all other interests. Remember the BCUC’s decision reversing its support for First Nations in remote areas in their planning struggles with BC Hydro, and another approving BC Hydro’s 2024/25 rates with no public input?
One can sense frustration building since the new BCUC chair was appointed in September 2023. At some point, someone is going to challenge a decision in court. Will it be a First Nation, thinking they are being given less-than-equal treatment to other ratepayers? Perhaps a gas utility, concerned that the BCUC is not applying regulatory principles in an even-handed manner?
There have already been some minor challenges in 2024 by interveners whose funding requests were cut back, will one of them stick their neck out and challenge a regulatory decision?
7. BC Hydro will get serious about expanding generation and transmission
Likelihood: Probably won’t happen this year – a better bet for 2026
It’s well known that BC Hydro has an electricity deficit, and this is not just a temporary phenomenon caused by the current drought. If the government wants to achieve its GHG emission reductions or require new LNG and mining operations to use electricity, never mind both, we’re going to need a lot more electricity.
The recent procurement of additional generation will get us through the next few years, but the intermittent energy from these wind projects only works if there is a reliable source of power in reserve. BC Hydro’s hydroelectric storage dams can provide this up to a point, but it’s not clear to what limit. Also, by using the dams to back up our own intermittent generation, we would likely reduce the revenues from Powerex, BC Hydro’s trading subsidiary, which currently subsidize our electricity rates.
Following the appointment of a new minister of energy, in December we got a new BC Hydro chair. Adrian Dix and Glen Clarke have worked together before when Mr. Clarke was BC’s Premier, after which he left politics for an apparently successful career in business. The combined appointments appear to signal a new seriousness on the part of the BC government with respect to energy.
If this dynamic duo is serious about GHG emission reductions through electrification and growing the provincial economy, they should direct BC Hydro to start looking at long-term investments in firm, reliable energy, and the transmission to get that energy to customers. The time between planning and completion for these projects can be a decade or more, so we should be starting yesterday.
If they want to get really serious, they could start thinking about nuclear power, but that’s probably a step too far for 2025.
8. BCUC will review the $16 billion cost of BC Hydro’s Site C project
Likelihood: A non-starter
Energy utilities are entitled to recover their prudently-incurred costs from ratepayers (part of the regulatory compact). Utilities are generally considered to have acted prudently if they made reasonable decisions based on what they knew, or ought to have known, at the time the decision was made.
Construction of BC Hydro’s Site C dam is nearing completion, and the cost has ballooned from an estimate of $8.3 billion in 2014 to $16 billion today (and could be more by the time the job is finally complete). Overspending on a project is not, on its own, definitive proof of imprudence, but it is a sign that an investigation is called for.
For example, much of the Site C budget overrun could be due to unexpectedly high cost inflation, which might not reasonably have been anticipated when the original budget was set. But some of the over-run was caused by fixing geological issues at the site, for which there is a long history of evidence, going back well into the last century.
Did BC Hydro act prudently when deciding when, where and how to build the dam? Was the construction project managed prudently? If not, then ratepayers should not be responsible for the costs of the utility’s imprudence.
The BCUC should examine the nearly $8 billion dollar overrun, but don’t hold your breath. If the last year’s decisions are anything to go by, the BCUC will just quietly let this one slide.