BC Gov News

• Fully subscribed, these new initiatives could collectively reduce or avoid more than one million tonnes of GHG emissions annually, depending on the industrial facilities that participate.
• For industry to be successful and to achieve climate goals in CleanBC, BC Hydro rates and the costs of connecting to the grid must be competitive with the cost of using other energy sources like natural gas, which is currently less expensive.
• The CleanBC Industrial Electrification Rates will increase BC Hydro’s revenue and provide a benefit to all ratepayers by attracting new customers and optimizing the use of energy in the short-medium term.
• Since November 2015, the Government of Canada has invested over $4.3 billion in 541 infrastructure projects across British Columbia under the Investing in Canada Plan.
• In 2019, the Province and the Government of Canada announced an investment of $83.6 million from the ICIP for BC Hydro’s Peace Region Electricity Supply project – the construction of two new parallel transmission lines to improve the reliability and capacity of the electrical system in the Peace Region and help industry avoid decades of greenhouse gas emissions. BC Hydro expects to put the new transmission lines into service in 2021.
• In 2019, the Government of Canada and the Government of British Columbia signed a memorandum of understanding agreeing to jointly support the electrification of the natural gas sector in B.C. to reduce greenhouse gas emissions.

COVID-19 has created an unprecedented level of economic uncertainty in the industrial sector, particularly for natural resources industries like oil and gas and mining, which have been greatly affected by exposure to global commodity demand and prices.

B.C.’s clean, abundant and reliable hydroelectricity can be used to stimulate economic recovery, growth and innovation, and reduce greenhouse gas emissions across the industrial, public transportation and other sectors. However, the cost of using electricity has to be competitive with other power sources before energy-intensive operations will consider switching from natural gas, gas or diesel fuel to run their facilities.

The following measures will make it more economically viable for industries to use more clean electricity in place of fossil fuels to power their operations by offering reduced electricity rates, and by lowering the costs for industries to connect to the electric grid or upgrade their interconnections to use more electricity.  

CleanBC Industrial Electrification Rates:

BC Hydro will offer a 20% discount from its current, standard industrial electricity rate for customers that switch from fossil fuels to electricity to power their operations, and for new clean industry customers.

The fuel-switching rate would be available to:

• eligible existing BC Hydro industrial customers that install new equipment that uses electricity rather than fossil fuels; or
• eligible new BC Hydro customers that can demonstrate they could have used fossil fuels rather than electricity to power their facilities.

The clean industry and innovation rate would be available to eligible customers that build new facilities or expand existing facilities that:

• produce a renewable or low-carbon fuel (like hydrogen or synthetic fuels from hydrogen, carbon dioxide or biomass); or
• are data centres; or
• use a process to remove greenhouse gases from the atmosphere (like the capture and/or storage of carbon dioxide).

The discounted rate will be available to an approved customer for a period of five years, with a gradual transition back to the standard industrial rate by year eight.

The rate will not be available to the downstream oil and gas sectors: for example methanol, oil transportation lines, oil refineries or natural gas liquefaction (LNG) facilities.

BC Hydro will bring the new rate design forward to the British Columbia Utilities Commission (BCUC) for review and comment . To assure the timely approval of the rate to help stimulate economic recovery from the COVID-19 pandemic, and advance industrial electrification to achieve climate targets in CleanBC, government has issued a direction to the BCUC.

CleanBC Facilities Electrification Fund (CBCFEF):

The Government of British Columbia will allocate $84.4 million of federal funding committed to B.C. under the Investing in Canada Infrastructure Program (ICIP) to help reduce the costs for BC Hydro customers to connect to the electric grid.

While BC Hydro pays the costs of expanding its electrical transmission system around the province, transmission service customers are responsible for the costs of building transmission lines from their facility to BC Hydro’s system, and for the costs of any upgrades to BC Hydro’s system that are required to connect them to the grid and supply the new load. These costs can be significant, and present a barrier for industrial customers to further electrify their facilities and equipment.

The funding would be available to eligible BC Hydro customers like mines, companies producing renewable fuels, natural gas processing facilities, public transportation companies including transit agencies and ferries, and other large institutional customers and local governments, such as neighbourhood district energy systems.

Under the CBCFEF:

• Funding would cover up to 50% of eligible costs for customer electrical connections and upgrades up to a cap of $15 million.
• Any costs not covered by the CBCFEF, other government programs or BC Hydro incentives would be the responsibility of the customer.
• Eligible costs include planning, design (including interconnection study costs) and construction of BC Hydro’s electrical infrastructure to supply the new load such as transmission lines, transformers and related equipment.

The CBFEF reduces the costs of connecting to the BC Hydro system for customers who want to increase their use of electricity, and builds upon the August 2019 memorandum of understanding between British Columbia and Canada under which the parties agreed to jointly support the electrification of the natural gas sector in B.C. to reduce greenhouse gas emissions.