Long-term resource planning in BC Hydro’s Non-Integrated Areas

June 5, 2024

By Bill Andrews and Tom Hackney

The BCUC is in the midst of a proceeding on the regulatory framework for long-term resource planning for BC Hydro’s Non-Integrated Areas (NIAs). (The framework, not the plans themselves!) The Utilities Commission Act requires BC Hydro (and other public utilities) to file a long-term resource plan with the Commission. Up to now, however, BC Hydro’s long-term resource plans addressed only BC Hydro’s grid-connected system (the “Integrated System”), (hence the name Integrated Resource Plan — fun fact). During the BCUC’s review of BC Hydro’s recently approved Updated 2021 IRP, representatives of two of the 14 NIAs inquired pointedly about long-term resource planning for the NIAs. In response, BC Hydro said it would address long-term resource planning for NIAs and the BCUC directed BC Hydro to do so.

No one really disagrees that BC Hydro should do some sort of long-term resource planning for NIAs with BCUC oversight. But how? Compared to the Integrated System, the NIAs are tiny in terms of the amount of electrical load and the number of customers. Should NIAs be planned to meet a community’s ambitious development objectives, or to meet an objectively neutral load forecast (i.e. intended neither to over-forecast nor to under-forecast) as for the Integrated System?

Almost all of BC Hydro’s NIAs serve First Nations communities, and First Nations issues have become deeply entwined with the electricity planning issues. In many of the NIAs, the local First Nation(s) assert that the principles of Aboriginal Rights and Title should inform their relationships with BC Hydro and the BCUC. The issues are contentious. Should a First Nation and BC Hydro “co-develop” an NIA long-term resource plan for filing with the BCUC? Could the BCUC purport to approve an NIA plan co-developed by a First Nation when the Commission supervises BC Hydro, not the First Nation?

On a practical level, there is strong support for reducing the amount of diesel fuel used for electricity generation in NIAs. Most of the NIAs rely heavily on diesel generation, which produces unacceptable GHG emissions, noise and local air pollution. BC Hydro is working with NIA communities to develop locally owned clean generation projects and it is negotiating electricity purchase agreements to buy the power for distribution in the community.

If long-term resource planning is done separately for each NIA, how would the BCUC determine if BC Hydro’s total GHG reductions across all the NIAs would meet the BC Government’s targets?

Some First Nations ask how they could ask the BCUC to determine that BC Hydro’s legally-required consultation and accommodation with the First Nation was inadequate if BC Hydro and an entity endorsed by the First Nation have entered an electricity purchase agreement.

More broadly, for the Integrated System the statutory framework separates BC Hydro’s long-term resource planning from BC Hydro’s electricity purchase approvals, demand-side management spending, capital spending, and rates approvals. Would it be practical – or even desirable – to separate BC Hydro’s long-term resource planning for an NIA from all BC Hydro’s other types of decisions (and the BCUC’s review) regarding the NIA?

Throughout 2023, BC Hydro held a series of meetings with First Nations representatives from NIAs on what BC Hydro’s NIA long-term resource planning (and the BCUC’s review of it) should look like. Despite lots of discussion and input on this and related topics, it’s safe to say there was no resulting consensus between BC Hydro and the NIA First Nations representatives (whose views diverged in some respects) on the key elements of a new process for BC Hydro to do NIA long-term resource planning and for the BCUC to review BC Hydro’s planning (and other) decisions on the basis of Aboriginal Rights and Title and the BC Declaration on the Rights of Indigenous Peoples Act.

In the end, BC Hydro filed a proposal with the BCUC and encouraged NIA First Nations to participate in the BCUC review of it. At the risk of over-simplification, BC Hydro’s proposal includes:

  • not filing a long-term resource plan under the UCA for each NIA or the NIAs as a group;
  • BC Hydro authorship (not co-development) of filings with the BCUC;
  • a focus on plans for individual NIAs not the NIAs as a group;
  • filing for BCUC review long-term contracts for BC Hydro to purchase electricity from specific NIA community-based clean generation projects; and
  • providing the BCUC with an NIA-specific “Community Context Report” containing key electricity planning information, in support of an NIA electricity purchase agreement.

 

BC Hydro also proposes:

  • to file an “NIA Strategy” document (formerly called the NIA Diesel Reduction Strategy) in BC Hydro’s next general rates application;
  • to apply for NIA customers’ rates to be reduced to the same as the rates in the Integrated System;
  • to provide capacity funding and support for NIA community involvement with BC Hydro; and
  • to support NIA communities to develop their own ‘energy plans’ as the community sees fit.

 

In a May 15 letter of comment, BCSEA supported BC Hydro’s proposal for a regulatory framework for the BCUC’s review of BC Hydro’s long-term resource planning in NIAs. BCSEA called for a practical approach, as distinct from the UCA framework designed for the Integrated System. BCSEA stressed the imperative in most of the NIAs to reduce the GHG emissions from the local diesel generation facility by developing a local community-owned or community-endorsed renewable energy project to sell power to BC Hydro. BCSEA noted its long history of support for new renewable generation in NIAs to reduce GHG emissions. BCSEA also expressed support for community control of new renewable electricity projects serving NIA communities.

NIA First Nations letters of comment were filed by Gitga’at, Nuxalt, Kwadacha and Tsay Key Dene. Letters of comment were also filed by Tll Yahda Energy (comprising Council of the Haida Nation, Skidegate Band Council, and Old Massett Village Council), and the Pembina Institute, which provided secretariat services to NIA First Nations during the 2023 meetings with BC Hydro. We highly recommend these letters of comment to anyone interested in the topic.

The next step in the BCUC proceeding is BC Hydro’s reply to the letters of comment, due June 7, 2024. Further process, if any, is to be determined.

Late breaking news, June 6, 2024: BC Hydro told the BCUC today that the BC Government intends to amend the GGRR in June to require the BCUC to allow BC Hydro to recover from general ratepayers BC Hydro’s costs of new clean generation facilities and associated micro-grid improvements in NIAs. BC Hydro asks for an extension to June 28 of its submissions to the BCUC in reply to the letters of comment. Our comment: The BCUC will likely allow the extension, because a Government order as described by BC Hydro would substantially change the legal context of the framework for BC Hydro’s long-term resource planning for NIAs.