During the November 2013 community sessions many people asked the Treaty Review team about the discrepancy between the value used in the U.S. when describing the Canadian Entitlement and the value used by the Province.

The Canadian Entitlement is Canada’s half share of the additional generation potential in the United States as a result of the water flow management from British Columbia storage reservoirs. The power is delivered to the Canada-United States border and sold by Powerex for the best market price they can get at the time of sale. The value used by the Province when talking about the Canadian Entitlement is the amount it actually receives when the Entitlement is sold. In 2012/13 the Entitlement was worth $90 million. In 2013/14 it is predicted to be close to $150 million. More information on the Canadian Entitlement can be found here.

The value the U.S. places on the Entitlement reflects their estimate of what it would cost B.C. to replace the entire Canadian Entitlement using power from a new natural gas generating resource. The U.S. Entity estimates the cost of building and operating this new generating resource to be $250-350 million per year.  The range reflects low and high assumptions about the cost for natural gas to fuel this new generating resource.

Although Treaty coordination of flows provides a number of additional benefits to the U.S. beyond just flood control and increased power generation potential, the Canadian Entitlement is the primary benefit Canada receives. Additional benefits to the U.S. include:

• Certainty of water flows for managing multiple uses including power, flood control, recreation, navigation and water supply;
• This certainty, as well as the joint risk management principles in the Treaty, also enables the U.S. to meet its flow requirements for fisheries purposes in most water conditions;
• Proportional draft of Canadian Treaty reservoirs during low-flow years which keeps U.S. reservoirs higher and provides greater flows than would otherwise be;
• Ability to coordinate other storage (e.g. Non-Treaty Storage) for mutual benefits, such as power and fish, in both countries; and
• Ability to effectively adapt to climate change.