Switch It Up Webinar Follow-Up: BCSEA Responses to Questions regarding Utilities, BCUC and Policy

January 22, 2022

By Bill Andrews and Tom Hackney

Here are responses to some of the questions and comments by participants in BCSEA’s January 17, 2022 webinar on Switch It Up! In particular, we address BC Hydro’s residential electricity rates, FortisBC Energy Inc.’s Renewable Natural Gas Program, and Local government’s GHG intensity requirements.

BC Hydro residential electricity rates. Some participants noted that homeowners who use an electric heat pump (or charge an EV) use a relatively large amount of electricity and pay the Step 2 price under BC Hydro’s Residential Inclining Block (RIB) Rate for power above the threshold of 675 kWh of electricity per month (and Step 1 for power below the threshold). BCSEA has supported the RIB Rate because it is designed to promote conservation and efficiency. However, it is true that the RIB Rate may be an impediment to wider adoption of electric heat pumps (i.e., in place of natural gas heating) and EVs.

BC Hydro is currently developing an application to the BC Utilities Commission to flatten the RIB rate, and BCSEA has been participating in BC Hydro’s stakeholder workshops on it. The application is expected to be filed in February 2022. For more information, see BCSEA’s December 12, 2021 article BC Hydro RIB Rate: On the Chopping Block? on the Policy Corner at the BCSEA website (https://bcsea.org/bc-hydro-rib-rate-on-the-chopping-block/). 

FortisBC Energy Inc. (FEI) Renewable Natural Gas Program. Some participants with natural gas heating asked for a comparison between switching to an electric heat pump and switching to 100% Renewable Natural Gas (RNG or biomethane). BCSEA can’t give a one-size-fits-all answer. Both electricity from the BC Hydro grid and 100% RNG from the FEI gas distribution system are close to zero carbon, but they each have other environmental and financial pros and cons. An individual homeowner would need to get information specific to their own situation. Someone facing replacement of an old gas furnace might be happy to invest in a heat pump solution. Someone with small, well-insulated premises, a new high-efficiency furnace and low gas consumption might prefer an RNG solution. 

At the BC policy level, BCSEA has supported FEI’s biomethane program since it began in 2010. Customers voluntarily pay extra for RNG to reduce their GHGs. A key plank of the CleanBC Plan is to displace 15% of fossil natural gas with biomethane (RNG) by 2030. BC’s CleanBC Roadmap to 2030, issued in October 2021, puts increased emphasis on RNG and hydrogen as a way to reduce the use of fossil natural gas in BC. Under the Clean Energy Act s.18 and the Greenhouse Gas Reduction (Clean Energy) Regulation (GGRR), the BCUC is required to allow public utilities such as FEI to recover their costs of RNG programs up to a defined quantity and price. 

In December 2021, FEI applied to the BCUC for approval of significant changes to the RNG Program. In addition to expanding the quantities of RNG available under the existing voluntary purchase approach, the proposal would allocate a small but growing proportion of RNG to the general natural supply to be received and paid for by all customers. Controversially, the proposal would also provide 100% RNG to new residential gas customers for the life of their premises, to be paid for (cross-subsidized) by other gas customers. The proposal is presumably aimed at enabling gas heating in new residential construction (i.e., single family dwellings and duplexes, not multiple unit residential buildings) to meet possible future municipal GHG intensity requirements applicable to new houses and duplexes. BCSEA is intervening in the BCUC proceeding and is actively consulting with groups and individuals in the field.

Two other key issues regarding RNG are how to find enough RNG to meet the ambitious targets, and how to confirm the actual GHG intensity of RNG from various sources. However, it will be challenging for BCSEA and other interveners to have the BCUC resolve these issues, given the legal support for RNG in the GGRR Regulation (see above.) In any event, BCSEA intends to participate fully in the BCUC proceeding regarding FEI’s upcoming Long Term Gas Resource Plan, which is expected to be filed early this year.

Local government GHG intensity requirements. Many participants were interested in the development of municipal requirements for low-carbon or zero-carbon heating that would promote the adoption of electric heat pumps. The City of Vancouver is the leader. It already has requirements for new buildings to meet stringent GHG intensity requirements. This legal regime doesn’t yet apply to existing buildings or to existing and new houses and duplexes, although the City strongly encourages reductions in GHG emissions from energy used for heating in these other categories. The City of Vancouver is unique in having legal authority to adopt limits on the GHG intensity of energy used to heat buildings. Other local governments don’t yet have this authority, at least in broad form. However, it is understood that the BC government is developing legislative amendments that would allow (but not require) municipalities to impose GHG intensity limits on buildings and housing. Presumably the starting point would be GHG intensity limits regarding new construction. It would be timely for residents to lobby their local government to support these legislative amendments and to make full use of the new powers when they are granted.