Run-of-river independent power projects have gained environmental steam, but are they really the right way to go?
When Nigel Protter moved to Whistler as an 18-year-old ski bum in 1978, he quickly got firsthand insight into run-of-river power generation.
It came courtesy of one of Whistler's pioneers, the late Oscar Berube, who lived with his wife in the middle of the canyon between Squamish and Whistler at Culliton Creek. Protter, 47, now lives just up the Sea-to-Sky Highway in Pemberton, and he said he still remembers visits to Berube's home, where he became "fascinated" by the off-grid setup.
"[My friend] and I were awestruck by his ingenuity," Protter told the Georgia Straight. "As his wife plied us with pastries baked in a wood-fired oven, Oscar showed us his hand-built powerhouse, intake, electrics, and the pií¨ce de résistance: the outflow water rushing right under his house and viewable from his living-room couch through a giant, thick sheet of clear glass. He was very proud of that."
Protter is the CEO and president of SyncWave, a Pemberton-based company developed to research and commercialize ocean-wave-energy technology. He also describes himself as a "green-energy consultant". Protter openly advocates for independent power producers building run-of-river generation projects in B.C. However, the issue of whether or not such projects are the right way to go is now politicized in a way Berube probably never envisaged, as academics, environmentalists, and First Nations grow concerned over their implications for energy security, electricity prices for consumers, and wilderness and wildlife.
SFU associate professor John Calvert specialized in energy issues when he was with the NDP government's Crown corporations secretariat. He told the Straight that independent power projects (IPPs) will result in an overpriced private dilution of an affordable pool of public electricity.
"The economic side of it is important, and the only reason it is not clobbering anybody yet is because we have this huge pool of really cheap public energy from historic investment in the dams," Calvert said. "We are making huge future commitments that are not apparent in people's rates immediately.”¦But as you get more and more private power coming into the pool, you are going to see more and more price impact."
Run-of-river gets its name from the fact that B.C.'s mountainous terrain and running rivers provide good potential power generation from kinetic energy. In contrast to hydroelectric-dam generation projects, run-of-river diverts only some of a river's flow into a penstock (pipe) and through to the turbine. A "tailrace", or watercourse, allows the outflow to rejoin the streambed. Unlike in large dam projects, there is little or no reservoir capacity, meaning no flooding of large areas.
In its 2007 B.C. Energy Plan, Premier Gordon Campbell's Liberal government lists run-of-river projects under "small hydro". The plan states that 29 electricity purchase agreements were awarded to small water-power producers by B.C. Hydro in 2006. B.C. Hydro is the sole purchaser of power in the province, but in 2002 Campbell's newly elected government blocked Hydro's ability to generate more power, though B.C. Hydro can retrofit or maintain existing turbines. The Crown corporation must purchase all new power from private sources.
Run-of-river projects are expected to eventually generate approximately 2,851 gigawatt-hours of electricity annually, according to the plan, or "the equivalent to electricity consumed by 285,000 homes in British Columbia".
"It is my view that we cannot build enough of these things," Protter said, before adding the caveat: "Though not at any cost."
B.C. Hydro spokesperson Gillian Robinson told the Straight the utility put out a "clean power call" on September 24 as a way to acquire 5,000 gigawatt-hours per year through a competitive bid process involving independent power producers. Robinson confirmed this is partly being done to close what Hydro CEO Bob Elton has called the "electricity gap"–a phrase also used in the B.C. Energy Plan.
"Since 2001, B.C. Hydro has been importing energy to meet the growing demand in B.C.," she said. Robinson said she estimates that "12 to 15 percent of B.C.'s energy per year" comes from imported power. She touted conservation as "first and best use" of power but said clean producers offer bigger-picture solutions.
Barry Penner, B.C. environment minister, did not make himself available for an interview. However, in a late-night voice-mail message to the Straight from Winnipeg, Penner claimed that run-of-river projects have low "environmental impact" and benefit First Nations communities.
"I visited a number of them this summer," Penner said. "One on Vancouver Island, called China Creek near Port Alberni, where [Hupacasath] Chief Judith Sayers took me out to look at it. The First Nation is interested in pursuing an additional project, because they view it as a positive thing for their band's economic development."
Although some First Nations band councils sign on to individual projects, the Union of B.C. Indian Chiefs is calling for a moratorium on run-of-river projects. At the June 26 UBCIC meeting in Westbank, Splats'in chief Wayne Christian successfully moved that a "moratorium on all private power-facility development on rivers and streams" be declared until an assurance of "transparent consultation" can be provided.
Grand Chief Stewart Phillip, president of the UBCIC, told the Straight that run-of-river hydro power is an end run around Supreme Court of Canada decisions that have enshrined the rights of First Nations regarding land title and use of their resources.
"I think there is no doubt about it," Phillip said. "Both the Government of Canada and the Province of B.C. are very hesitant and reluctant to follow the letter of the law as it pertains to aboriginal title and rights and interests of First Nations people in Canada.”¦The provincial government has brought forward the New Relationship, and quite frankly it's become more of a brand than an actual benefit."
Phillip said there has been a "litany" of cases at Canada's highest court instructing governments that they have a "legally enforceable obligation to consult and accommodate the interests of First Nations vis-í -vis the disposition of land and resources". The cornerstone case upheld by the Supreme Court of Canada is the 1997 Delgamuukw case involving Gitksan and Wet'suwet'en hereditary chiefs claiming separate portions of 58,000 square kilometres of B.C. Delgamuukw, which recognized and defined the continued existence of aboriginal title in Canadian law, laid the foundation for other legal precedents that need to be respected, Phillip added.
"Furthermore, the duty arises at the outset, at the highest and most strategic level, as opposed to informing the First Nations after the [run-of-river] project is well under way," Phillip said. "In other words, inviting us to a ribbon-cutting ceremony does not meet the legal standards put forth by the courts. And in most cases, we are only notified of the projects after there has been substantial investment on the part of the proponent and a great deal of deal-making that has gone on."
Mike de Jong, minister of aboriginal affairs and reconciliation, did not respond to an interview request from the Straight.
According to Craig Orr, executive director of the Watershed Watch Salmon Society, the assessment criteria for the projects are "deficient". Earlier this year, the society released two reports: one 53-page full report, "Green" Hydro Power: Understanding Impacts, Approvals, and Sustainability of Run-of-River Independent Power Projects in British Columbia, and a 14-page summary handbook. The longer report states that some 25 projects were built prior to 2006, while 41 more have received approval in principle from B.C. Hydro and are under construction.
"In the short document, [the society highlights] impacts from power lines, transmission lines, roads, and gravel mines," Orr said. "This was an eye opener for us. We thought that these projects were a little greener than they have actually turned out to be. That doesn't mean that they can't be improved. The real eye opener was the total lack of planning provincewide on run-of-the-river–it is all reactionary and ad hoc."
Orr said Watershed Watch is not out to stop the projects but wants to make them more "sustainable". In a top-10 list of considerations, the society lists important criteria on which to base projects, including location, cumulative effects of more than one project on any given area, and consultation with First Nations.
Calvert said he agrees with Orr's assessment, adding: "Each project gets its environmental assessment as an individual project. It is not a process that incorporates regional planning."
Steve Davis, president of the Port Moody–based Independent Power Producers Association of B.C., told the Straight he is keen to "erase any myths" surrounding criticism of environmental-assessment criteria for IPPs.
"They [Watershed Watch] indicated it was not being sufficiently reviewed," Davis said. "We think that it is, because any project looking for federal funding, or that triggers federal legislation, gets reviewed under the CEAA [Canadian Environmental Assessment Agency]. As soon as it does, there is a clause [Section 16 (i)(a)] that specifically deals with cumulative impacts."
Calvert's major concerns relate to B.C.'s energy security. He believes that the fee private producers pay for a B.C. water licence is small change when compared to what IPPs can earn selling the power on the open market later on, which IPPs are free to do once their contract with B.C. Hydro expires.
(On March 16, the Straight reported Calvert's point that the water-licence fee for the largest-capacity run-of-river project–one that generates more than 20 megawatts–is capped at $10,000. Facilities of less than 20 megawatts pay $5,000.)
"The attraction [for IPPs] is they have a guarantee of public cash–a revenue stream that will cover all their costs," Calvert said recently. "In a sense, the public takes all the risk. The price they [producers] are getting for this energy is very high for this 'non-firm' [non-assured-supply] energy. And even if it were 'firm' energy, the price is extremely high for it. It is a very good deal for private power developers and a very bad deal for ratepayers."
Added Calvert: "The government has opened the grid to energy exports. In that regard, it has taken a totally contradictory position, because on the one hand, it has said we need all this energy for B.C. But on the other hand, they say: 'Oh, by the way, all these projects will be able to export to the U.S. if they want to and can get a better price there.' So there is no energy security; there is no guarantee the energy would stay in B.C. if prices go up in the U.S. and it becomes more attractive to sell the energy there. The consequence of this, of course, is that if we wanted to keep some of that energy in B.C., we would have to pay U.S. prices. That would be the condition."
In 2001 Mark Jaccard, an SFU professor of resource and environmental management, "deconstructed" B.C. Hydro and the energy picture in a report–published in UBC's scholarly journal BC Studies–called "Deconstructing Hydro: The BC Electricity Sector in This Decade". Jaccard also chaired the B.C. Utilities Commission, a public entity that oversees B.C. Hydro, from 1992 to 1997. He told the Straight he does not share Calvert's concerns about private ownership, and he sees run-of-river as a viable option that has risks and benefits like all other energy-producing alternatives.
"My general recommendation [in "Deconstructing Hydro"] was to keep the existing Hydro facilities in public hands–there is no reason to privatize that," Jaccard said. "Keep the transmission grids in public hands, because it's a monopoly and there is no reason to privatize that, but”¦allow smaller, private companies to compete in producing new electricity. If you keep this [B.C. Hydro] as a monopoly, as one big entity, you get some pretty bizarre outcomes, and there is a huge history of that. At the end of the '90s, we had a fairly rational energy-planning policy, until [former NDP premier] Glen Clark wanted to get reelected and suddenly decided, 'To heck with greenhouse gases.' Even though the planning process, run through the BCUC with me as chair, had come out with smaller projects, and some of them owned by B.C. Hydro, and some smaller developments on Vancouver Island–none of them burning fossil fuels–Glen Clark ordered B.C. Hydro to start developing a natural-gas pipeline to Vancouver Island."
Jaccard called this kind of intervention "completely irrational" and claimed it took about six or seven years, hearings before the BCUC, and several decisions before the plug was pulled on proposed gas-fired plants like the one planned for Duke Point near Nanaimo.
"That is just an example of how things can get distorted when there is no competitive check against the whims of a politician who happens to be running your utility," Jaccard said. He said the movement toward more competitive markets has "saved" electricity consumers–and, ultimately, taxpayers–from a huge number of potential "boondoggles".
"I used to be amazed when I was among my [economist] colleagues in Norway and Sweden, and those countries would have mostly public ownership but mostly private competition for new [power] generation, and I would come back to British Columbia and people would talk about that like it was extremely right-wing," Jaccard said. "I just found this represented a very isolated position in B.C."
Davis said he uses two words to explain his position: "Competition works." He has been developing IPPs since 1989 but shares concerns raised by Orr with his 10 criteria for run-of-river projects.
"Broadly, we share the interests of trying to avoid hurting fish as we do projects," Davis said. "We concur, but obviously each project is a little different, so not all 10 criteria are relevant."
Davis said he also believes his Independent Power Producers Association of B.C. is doing enough to accommodate the First Nations interests outlined by Phillip.
"The projects that are proceeding have agreements," Davis said. "You can't get to a contractual agreement about sharing the benefits of the project unless you have had a pretty thorough discussion.”¦I can say with a certain degree of confidence that because First Nations are so obviously on the radar screen of all the permitting and review agencies and local governments, it is in the best interests of IPPs themselves to get out early and talk to the First Nations. There is just no reason not to."
Phillip said he is still not convinced this amounts to more than window dressing, and added: "The patience of First Nations is wearing very thin." In addition to the Delgamuukw case, Phillip said, the Union of B.C. Indian Chiefs wants to see recognition of the "meaningful consultation" intent of other court decisions, such as those involving the Haida and the Taku River Tlingit, and this was included in the June 26 Westbank motion.
Run-of-river projects, Phillip said, represent the "commodification" of a valuable resource that is the lifeblood of all citizens of the province.
Pragmatic boosters like Protter see run-of-river as a means of avoiding dirty fossil fuels in electricity generation, even if it means that B.C. Hydro is not generating the new hydroelectricity–Calvert's preferred outcome. But Protter repeatedly stated it also means no new large dams–like the controversial, on-again-off-again Site C Dam proposed for the Peace River area–are necessary. He cited China's Three Gorges Dam project as an example.
"That is a huge environmental disaster," Protter said. "As for Calvert's concern about selling to the U.S.: why should we care where the electricity goes? Shouldn't you be glad that you're displacing some form of fossil-fuelled generation?"
If Calvert is right, ratepayers should be worried about both the rates and the contracts independent producers sign with B.C. Hydro as part of the 2006 energy purchase agreements. He said that some of these IPP contracts are 2006 tenders that won't begin to deliver power until 2012–13. Calvert said this is because it can take "three to four, maybe five years" to build the plants.
"When we get to 2012–13 and suddenly we get all these huge rate hikes, well, these are all being arranged today," Calvert said. "People are going to say, 'What is going on? How come our Hydro bill is so high?' Well, there is a reason for that, and that is because the government is doing extremely bad deals for ratepayers today, through B.C. Hydro."
Premier Gordon Campbell wants B.C. to be the "best place on Earth" and pledges to reduce greenhouse gases. His environment minister, Barry Penner, touts IPPs as a way to avoid importing power that may have come from coal- or natural-gas-fired plants and to introduce an element of competition into the generation of power. The ratepaying public may or may not be convinced this is a good deal for them, but one thing is certain: it will take time to see what purported financial and environmental fruits IPPs bear. Meanwhile, IPP critics don't want their own nightmare realized, which is their energy-rich province being sold down the river.