BCUC Updates

April 13, 2023

By Bill Andrews

We have several events to report from the BCUC.

First, BC Hydro’s 2021 Integrated Resource Plan (IRP) has been thrown into a loop by two announcements by the BC Government in March 2023. The first is the issuance of an Environmental Assessment Certificate for the Cedar LNG Project. The second announcement is the establishment of a “new energy action framework” aimed at GHG reductions from the gas and oil sector. BC Hydro told the BCUC that these announcements require BC Hydro to make “material changes” to the 2021 IRP regarding the load forecasts, the load resource balances, the base resource plan, the contingency resource plans and the near-term actions. After receiving written submissions, the Panel postponed the oral hearing (previously scheduled for the end of April and the beginning of May) and required BC Hydro to file the IRP revisions by June 9.

The two announcements presumably mean greater electricity load growth earlier than anticipated. Beyond that, BCSEA has no definitive information on how BC Hydro will change the 2021 IRP in the June 2023 filing. However, the impact on the BCUC proceeding is enormous. As BCSEA told the BCUC, “This is a 2021 IRP, based on a December 2020 comprehensive load forecast and load-resource balances. The IRP was filed with the BCUC in August 2021, and the proceeding has already been in progress for more than a year and a half. The Panel’s final decision may not be issued until 2024. Extending the current proceeding due to very recent external events elevates the risk of focusing on precise forecasting rather than on long-term planning for a range of reasonably plausible futures.” BCSEA expressed disappointment that BC Hydro was unable to say that the 2021 IRP is sufficiently robust to handle the implications of the BC Government’s March 2023 announcements without amending the 2021 IRP.

Second, the BCUC Panel startled everyone (well, us, anyway) by simply adjourning the proceeding regarding FortisBC Energy Inc.’s application for approval of an expansion of LNG storage facilities at FEI’s Tilbury site in the Lower Fraser River. The application was filed in January 2021. FEI argued that the almost $1-billion project was necessary to provide resiliency in the event of a disruption on the Enbridge T-South pipeline that is the main source of natural gas to FEI’s distribution system in the Lower Mainland and Vancouver Island. The proceeding was lengthy and intensive. Final written arguments were completed in December of 2022. BCSEA opposed approval of the Project. BCSEA said it is resistant to new investment in natural gas infrastructure in BC in the absence of solid justification, because of the risk of locking‐in fossil‐fuel gas infrastructure and inhibiting the reduction of GHG emissions.

On March 23, 2023, the BCUC issued its decision to adjourn the proceeding. The Panel identified a number of concerns about the Project and concluded that it was unable to determine whether to approve or reject it. However, the Panel said it is “prepared to give FEI a fair opportunity to address these concerns,” without giving a specific date for FEI’s response. Notably, the Panel addressed the “issue of future demand for natural gas” and found “a significant probability that demand for natural gas will be reduced compared to the demand today.” This is the first time, to BCSEA’s knowledge, that the BCUC has acknowledged the probability of reduced future demand for natural gas as a factor in a major decision about the gas distribution system in BC.

Third, FEI’s proposed Okanagan Capacity Upgrade pipeline project has come back from regulatory limbo. FEI originally filed for approval of the Project in January of 2021. However, the Penticton Indian Band objected that the pipeline expansion would occur in its traditional territory. PIB filed extensive evidence and responded to numerous information requests. In late 2021, an oral hearing on PIB’s aboriginal arguments was deferred several times pending negotiations between FEI and PIB. In early 2022, the BCUC officially adjourned the proceeding to await any news from FEI and PIB. After a year of dormancy, in March 2023 the BCUC asked FEI for an update. FEI responded, diplomatically stating that its “discussions [with PIB] are progressing well and we anticipate advising the BCUC whether FEI and the PIB can reach an agreement with respect to the OCU Project by the end of April 2023.” Interestingly, FEI added that it “is seeking PIB’s consent for the OCU Project in that agreement.”