BCPIAC opposes Ministry of Energy and Mines seeking regulatory exemption for power projects

BCPIAC replied to a call for comments in response to the Ministry of Energy and Mines proposal to exempt the North Montney Power Supply Project and the Peace Region Electricity Supply Project from undergoing a review by BC’s energy utility regulator.

Julie Chace
Director, Transmission and Inter-jurisdiction
Electricity and Alternative Energy Division

Dear Ms. Chace:

Re: Ministry of Energy and Mines proposal to exempt the North Montney Power Supply Project and the Peace Region Electricity Supply Project from regulatory review by the BC Utilities Commission

I am writing to provide comments in response to the Ministry of Energy and Mines (“MEM”) July 31, 2015 email seeking feedback on the proposal to exempt the North Montney Power Supply (“NMPS”) and the Peace Region Electricity Supply (“PRES”) Projects from regulatory review by the BC Utilities Commission (“BCUC”) under Part 3 of the BC Utilities Commission Act (“UCA”).

We oppose removing the NMPS and PRES Projects from an open and independent review by the BCUC under Part 3 of the UCA.

We regularly represent a group of anti-poverty, seniors’ and tenants’ organizations in regulatory proceedings before the BCUC involving BC Hydro. In those regulatory proceedings, we represent the interests of low and fixed income residential ratepayers. It appears that we were not included in the list of organizations that the MEM consultation request was sent to, but your request was forwarded to us by other stakeholders.

We oppose removing the NMPS and PRES Projects from an open and independent review by the BCUC under Part 3 of the UCA. The purpose of regulation under the UCA is to ensure a review by the BCUC in order to determine whether the projects are ultimately in the public interest. A review by the BCUC will provide a full and transparent assessment by an expert tribunal in which members of the public as well as organizations such as ours and other intervenors experienced in utilities regulation can probe the need, cost, siting, alternative options and other relevant issues relating to the proposed Projects.

The provincial government and MEM have exempted several large projects from BCUC oversight in recent years, including the Site C Clean Energy Project, the Northwest Transmission Line, and smart meters. None of those projects received an open and transparent review by the BCUC, and yet BC Hydro ratepayers will likely be ordered to pay all of the billions of dollars in costs related to these projects.

These costs are being forced onto BC Hydro ratepayers by the province at time when residential rate increases are consistently rising and are becoming unsustainable for low income ratepayers.

We therefore ask that should the proponents wish to proceed with the NMPS and PRES projects, that no regulatory exemption be granted, and that both Projects be required to meet all of the requirements in the UCA prior to approval.

Sincerely,
BC Public Interest Advocacy Centre

Sarah Khan
Staff Lawyer

Gas marketers coming to Island

August 7, 2015  | Tannis Braithwaite | Parksville Qualicum Beach News

Link to original article

If you use natural gas to heat your home or run your appliances, you can expect a gas marketer to soon appear on your doorstep.

Effective January 1, B.C.’s local gas distribution company, FortisBC, amalgamated its various operating companies into a single entity. As a result, programs previously available only on the Mainland will soon be available on Vancouver Island.

One of these programs, known as ‘Customer Choice,’ provides customers with the option of buying their gas commodity from the gas distributor, FortisBC, or from a third party gas marketer.  Either way, the gas will continue to be delivered by FortisBC.

Why choose one over the other?

FortisBC makes its money by delivering gas to you. It doesn’t make any money on the gas itself. Like the gas marketers, FortisBC buys gas from gas producers. The amount you pay FortisBC for the gas you use is the same amount FortisBC pays the producers. Because gas markets are dynamic, the amount FortisBC pays for gas varies over time, and so does the rate you pay for the gas you purchase from FortisBC. Every three months the B.C. Utilities Commission sets the rate FortisBC can charge for gas at a level designed to allow FortisBC to recover the full cost of its gas purchases and no more.  That is, the rate is set so FortisBC breaks even.

If you purchase your gas from FortisBC, the rate you pay for gas goes up when the market goes up and goes down when the market goes down.

If you don’t want your rate changing, you must buy your gas commodity from a third party gas marketer.

Unlike FortisBC, the gas marketers are permitted to offer consumers a fixed rate under contracts lasting from one to five years.  If you enter into a contract with a gas marketer, you will pay the agreed upon rate for the entire duration of your contract, regardless of how the price of natural gas changes in the market.  Either way, the price you pay to have your gas delivered will continue to be set annually by the B.C. Utilities Commission.

What should you do?  Whether you are likely to benefit financially from a fixed rate contract depends on what the market does in the future. FortisBC’s current rate of $2.48/GJ is substantially lower than the $3.89/GJ to $6.39/GJ currently being offered by gas marketers.  This is because FortisBC can raise your rate if its costs increase.  The gas marketers won’t be able to do that, so they need to charge you more now to hedge against possible future increases. They also need to make a profit because their business is selling you gas commodity, whereas FortisBC’s business is delivering you gas commodity.

No one can predict the future, but natural gas prices are currently near historic lows and it’s probably safe to say that they aren’t likely to go much lower in the future.  Most predictions are for prices to stay relatively flat at least in the medium term.

Decide for yourself whether you’d rather live with a variable rate or secure a fixed rate, even if the fixed rate is currently higher

Of course, predictions have a way of turning out to be wrong.

All you can really do is decide for yourself whether you’d rather live with a variable rate or secure a fixed rate, even if the fixed rate is currently higher.

Gas marketers are required to follow a Code of Conduct which is reviewed regularly and set by the B.C. Utilities Commission. Mechanisms have been built into the Code of Conduct to attempt to guard against potential customers feeling pressured into buying gas from a marketer. If you have a complaint about the conduct of a gas marketer or a dispute with respect to your contract with a gas marketer, you may be able to obtain assistance from the BC Utilities Commission’s Customer Choice Program.

More information on this topic is available on the FortisBC website and the B.C.Utilities Commission website under the “Customer Choice Program”.

Tannis Braithwaite is the Executive Director and a lawyer with the B.C. Public Interest Advocacy Centre.

BC Utilities Commission releases decision on fees for BC Hydro smart meter opt-out program

The BC Utilities Commission released a decision on April 25, 2014 about the fees BC Hydro will be allowed to charge its residential customers under the Meter Choices Program who choose not to have a smart meter installed at their home.

BC Hydro originally planned to install smart meters at every residential customer’s home. In July 2013, following significant opposition by customers, the provincial government directed BC Hydro to provide an opt-out program (with associated charges), available only to those customers who did not already have a smart meter.

Read more about the smart meter opt-out program.