2009
Legislative Session: First Session, 39th Parliament
COMMITTEE A BLUES
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
(HANSARD)
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES
(continued)
The House in Committee of Supply (Section A); H. Bloy in the chair.
The committee met at 2:38 p.m.
On Vote 24: ministry operations, $67,793,000 (continued).
D. Donaldson: I'd just like to continue along the lines of questioning before we recessed, regarding the coalbed methane proposed development in the Sacred Headwaters — the Skeena, Stikine and Nass rivers. The minister responded around the moratorium, the setting aside of Shell's activities. The order-in-council allows that for two years, and we're nearing the end of year 1. [DRAFT TRANSCRIPT ONLY]
Some of the order-in-council details that were to be assessed during this two-year period would be regional water quality data. This takes, as the minister likely knows, quite an amount of time, especially if you're looking at groundwater, which is essential for consideration of the effects of that project. [DRAFT TRANSCRIPT ONLY]
What I would suggest is that the extension could go beyond the two years to the four years that is being listed in this order-in-council. But what I'd like to do is get more to the work that's been done, which we're talking about under this vote. [DRAFT TRANSCRIPT ONLY]
The risks of coalbed methane in the Sacred Headwaters are unacceptable to the residents of the northwest. The minister is aware of that. Concern about this area and opposition to coalbed methane remains high. Developing additional fossil fuel resources is at odds with the government's commitment on greenhouse gas reductions, so my question around this vote is: what is the government doing to permanently safeguard the Sacred Headwaters from coalbed methane development? [DRAFT TRANSCRIPT ONLY]
[1440]
Hon. B. Lekstrom: We're actually — as I said earlier, before the break — continuing to work with the Tahltan at the present time, with communities. We are doing water work in that area right now. As the time progresses…. The one-year date, I believe, is December 5 of this year. It was two years, and then at that point it would be reviewed. [DRAFT TRANSCRIPT ONLY]
If we don't have the appropriate information at that point, two years in, to make a decision, we will be looking at carrying it on further. The whole idea is to ensure that we do the proper amount of discussion with the Tahltan, with the communities, and ensure also that we have the proper information with regards to water in that area. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'd like to now move to offshore oil and gas. There was a time…. I recall quite vividly the previous minister saying that the Olympic torch would be lit with gas that had been discovered and processed offshore. I think that in the Senate that might be something that he's still dreaming of today, but my sense is that that didn't happen. I stand to be corrected, but I don't believe that happened. [DRAFT TRANSCRIPT ONLY]
I want to, then, ask the minister…. Over the years the estimates documents change. I made reference to that this morning. It's very difficult for us to understand exactly what…. It's not just in these estimates but all ministries, because of the election. But as I thumb through the documents, I find no reference to the offshore oil and gas branch, which used to be a pillar under the previous minister. I'm wondering if you could advise the committee what happened. Where are they, and what are they doing now? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The offshore oil and gas has been rolled into the oil and gas division of the ministry. That's where that is at. And we continue…. We actually have the offshore working group with the UBCM that was initiated in 2005. We continue to work on advancing this file through the ministry. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, there's been a budget reduction in the oil and gas division. Can the minister advise if the staff that were formerly stand-alone are devoting every minute of their day to having the federal moratorium lifted? Is that what they're doing? If so, they don't appear to be terribly effective. Maybe they might be redeployed to some other activity. [DRAFT TRANSCRIPT ONLY]
[1445]
Hon. B. Lekstrom: We presently have two staff working primarily on this, focused on that. But we continue, as I said earlier, to work with the UBCM working group, for instance, something that was established in 2005. I know that the member is aware that there's a federal moratorium on this issue, but we do try and move that file forward as we can. That would be what the member is referencing. [DRAFT TRANSCRIPT ONLY]
L. Popham: My question is regarding the moratorium. I'm just wondering: is the government currently lobbying, or will they be lobbying, to have that moratorium lifted? I'm asking that question because during the election in my constituency this was the biggest issue — to have that moratorium in place. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: We have said, our government, that as long as this could be done in an environmentally responsible and scientifically sound manner, we would entertain offshore oil and gas. But the reality is that our staff are not actively involved in lobbying the federal government to lift that moratorium. [DRAFT TRANSCRIPT ONLY]
L. Popham: I think that if you were to ask the people of British Columbia, they would all support the moratorium being in place. So I'm just wondering if the minister supports the moratorium being in place. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: No, we don't support the moratorium. I think we've made it clear that as long as…. I want to make it very clear, going back to what I indicated in my first answer. [DRAFT TRANSCRIPT ONLY]
If it can be developed scientifically sound, environmentally responsible, we would support the development of offshore oil and gas in British Columbia. We believe it can be done, but there's much science and much work to be done. But at the end of the day the federal government does hold the key to the moratorium, and they're the ones right now that have that moratorium in place. [DRAFT TRANSCRIPT ONLY]
The Chair: Before I recognize the speaker, I just wanted to have everyone know that all the questions are to be directed towards Vote 24 and what is in the budget estimates. [DRAFT TRANSCRIPT ONLY]
D. Donaldson: This is along those lines and relates to work that may be taking place under this vote, and it's in regards to this government's support and the minister's support…. I understand that he supports the Enbridge oil pipeline across the northern part of the province, and that's opposed by many of the communities all along the Skeena, specifically the Wet'suwet'en, who've made it clear that they're not in favour of this pipeline across their territories. [DRAFT TRANSCRIPT ONLY]
The pipeline would terminate on the coast, so this means oil supertanker traffic plying the inland waters of our coast. That's against the wishes of the Gitga'at, people of Hartley Bay, and against the Haida. It's not a matter of if a spill would happen; it's a matter of when. So if the government and the minister support the pipeline, then are they also in support of oil supertanker traffic on our inland coastal waters? [DRAFT TRANSCRIPT ONLY]
The Chair: I would like to state that members, when they ask questions, can't be canvassing the opinion of the minister. They have to draw directly to the budget estimates that we're discussing — Vote 24. [DRAFT TRANSCRIPT ONLY]
[1450]
J. Horgan: Well, thank you, hon. Chair, and we'll certainly take your direction under advisement. But the questions that are being posed by my colleagues refer to a line item within the oil and gas branch, and those are staff working on the offshore oil and gas development, which is now contained by a moratorium. So I would suggest that we are doing just what you've directed with this line of questioning. [DRAFT TRANSCRIPT ONLY]
The Chair: Member, I accept what you have to say. The question must be drawn back to the line estimate and not asking for the opinion. There's a question that was put forward, so draw it to the budget, Vote 24. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: On the issue of the Enbridge pipeline, there has not been a formal proposal moved before the NEB, for example. This would be an NEB product — which is the National Energy Board, for the public that may be watching here this afternoon. Or the Canadian Environmental Assessment Act would actually look after this. Much discussion with many people, but nothing formally, actually, put in yet under application. [DRAFT TRANSCRIPT ONLY]
D. Donaldson: Regardless of that, any kind of development such as this would require oil supertanker traffic on our inland coastal waters. So my question relating to the vote would be: are staff working on this in support of oil supertanker traffic on our inland coastal waters? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: No, we have no staff working on the issue that you're referring to and questioning about. This would be a Transport Canada issue, though. Tankers would fall under that, under the federal jurisdiction, so it would be them that would be doing that work that the member is referring to or questioning about. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'd like to now, in the time we have remaining, seek an opportunity to discuss some issues around Crown agencies that are the responsibility of the minister. We'd like to start with B.C. Hydro. We had a little bit of a primer, and we might as well carry on where we left off in the question period today. My questions relate to the proposed purchase of a third interest in the Waneta dam, currently an asset that's owned by Teck minerals. [DRAFT TRANSCRIPT ONLY]
My question to the minister is: what analysis was done to conclude at a purchase price of $825 million for that portion of the asset, and will the minister table that information? Or is it going to be before the Utilities Commission? There you go. [DRAFT TRANSCRIPT ONLY]
[1455]
Hon. B. Lekstrom: Just before I do answer the question, I want to take the opportunity.... We have some staff that have joined us. Joining us today is Les MacLaren, who is the ADM of electricity and alternative energy; Bev Van Ruyven, who is the vice president of customer care and conservation with B.C. Hydro; and Kathy Nguyen, who is the project manager at B.C. Hydro as well. [DRAFT TRANSCRIPT ONLY]
So the question.... All of the cost-effective issues that were laid out for this purchase are in the filing that is presently before the BCUC. All of that information has been established and put forward for the public. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Can the minister advise if there were discussions prior to final agreement between Columbia Power, B.C. Hydro and Teck Cominco? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Teck and B.C. Hydro were in discussions prior to the filing, negotiating a commercial deal, but it did have to — as it goes forward, as the member would well know — stand the test of the B.C. Utilities Commission. That's where it's at today. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I did ask if Columbia Power was part of those discussions prior to a final agreement being reached. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: There were no talks between Teck, CPC and B.C. Hydro. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I have e-mails that were provided to me under freedom of information, interestingly, not from Columbia Power but from B.C. Hydro, that are e-mails between the then-CEO of CPC, B.C. Hydro and Teck about meetings that were to take place in June, which I believe was prior to the purchase. [DRAFT TRANSCRIPT ONLY]
The subject line refers to the Waneta purchase, so I am wondering if perhaps the right people aren't here and it might be better that I ask those questions of CPC, even though they didn't provide me with the documents. But my understanding, based on those documents, is that there was discussion between the three entities, two publicly controlled and responsible to the minister and one a private sector entity. [DRAFT TRANSCRIPT ONLY]
So I think that we need to get the paper trail correct, and that's certainly not my responsibility. [DRAFT TRANSCRIPT ONLY]
[1500]
Hon. B. Lekstrom: I'm not sure what documents the member is referring to, but they may very well be dealing with discussions around the Canal plant agreement, for example, or the Waneta expansion project. We'd be more than happy…. If the member would like, we could work with him on that. But that may be what those documents are referring to. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, we do have a bit of a break where I can go back to my office and retrieve those before the Columbia Power folks show up, so I will leave that area. [DRAFT TRANSCRIPT ONLY]
I'd like to move now to Burrard Thermal. The minister will know, as he signed a special direction to the commission following the long-term acquisition plan decision by the Utilities Commission this summer.... He issued a direction on behalf of government that the commission ignore the potential for electricity to be generated from Burrard Thermal. [DRAFT TRANSCRIPT ONLY]
I'm wondering if the minister could explain to the committee why the province would take such a step when time after time the Premier, in opposition, spoke of the need to maintain independence between government and the commission. [DRAFT TRANSCRIPT ONLY]
A number of special directions have been issued by government since 2001, this particular one falling on the heels of what was an exhaustive public hearing with witnesses, with evidence, with cross-examination — and months after that a special direction issued with respect to Burrard Thermal. I wonder if the minister could explain that. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The issue regarding Burrard Thermal is not a new issue, as the member would well know. We committed in 2001, and even prior to that, that Burrard Thermal was not in the future of British Columbia when it came to electricity generation. We felt that it had served its life cycle quite well but was antiquated technology. We actually followed through in the 2007 energy plan, on page 14 of that document, indicating the phase-out of Burrard Thermal at that time. [DRAFT TRANSCRIPT ONLY]
I know that the member has kind of focused on this — was just overruling the BCUC. I can tell you that I believe that this was a clarification from government. We thought that it had been clear, as I indicated, going back to 2001. Again, in 2007 we reiterated and made it clear in the energy plan that Burrard Thermal was not going to be part of our future. [DRAFT TRANSCRIPT ONLY]
We have a diversity of opportunity to generate clean, green, renewable electricity in British Columbia. No longer did we need to utilize an antiquated single-cycle turbine technology. So that's the way we went about that order-in-council. I think it was the right thing to do. I stand behind that, and I think that the people of British Columbia will certainly be better off as a result of cleaner air and a better environment in which we live. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, this is the classic example of the contradiction between the rhetoric of government and the actions. We can't plug holes in the ground fast enough to get our natural gas — a transition fuel, one that has a bright future, according to the minister this morning. We can't get it out of the ground and into pipes fast enough to go straight past Burrard Thermal to go into airsheds and other parts of North America with the same greenhouse gas impacts they would have had they remained in B.C. and been used at Burrard. [DRAFT TRANSCRIPT ONLY]
So I want to know if the minister can cite any benefit-cost analysis that was done to determine the cost of any greenhouse gas emission reduction targets that might be achieved by this special direction. [DRAFT TRANSCRIPT ONLY]
[1505]
Hon. B. Lekstrom: Well, the member raises the question about us utilizing our natural gas, which is a major benefit to British Columbia, that resource, and shipping it somewhere where we, in turn, in British Columbia don't use that. I think it's fair to say that there are very few, if any, jurisdictions in the world that have the diversity of opportunity to generate clean, green renewable electricity that British Columbia has. [DRAFT TRANSCRIPT ONLY]
The natural gas that we do ship, if it is utilized for electrical generation — for instance, south of the border — has usually been put into a combined-cycle gas turbine. Those gas turbines are replacing coal-fired generation, thus reducing the greenhouse gas emissions in the jurisdiction where it ships. [DRAFT TRANSCRIPT ONLY]
We think that's a good thing. We think that we have a responsibility. I know the member made a comment that they had a responsibility during the problems that California experienced in 2000, I believe — that if we had the ability to help we should do that. We think we have the ability to help not only British Columbia but…. Greenhouse gas emissions don't recognize provincial or international boundaries, so the ability to work together and help an environment for all of us is key. [DRAFT TRANSCRIPT ONLY]
He also talked about: "Is there a benefit? Is there a benefit analysis?" We believe that, certainly, there will be benefit with our early action on the phasing-out of Burrard and the closing of it for use traditionally as we would know it. Now it will only be there for emergency backup. We will have the ability under the cap-and-trade to reap those benefits, whether it be through a federal system or the WCI. [DRAFT TRANSCRIPT ONLY]
J. Horgan: My read of what the minister just said is that there was a lot of wishful thinking there, and I'm as wishful as he on that. I, too, am hopeful that we could, in a perfect world, assume that our gas was displacing other less useful forms of energy generation or electricity generation. [DRAFT TRANSCRIPT ONLY]
Again, I go back to a question, a quantitative question. Was there a cost-benefit analysis done of the impact on ratepayers, for example, of proceeding with the special direction against what was, in my mind, a reasonable and prudent decision by the Utilities Commission to assume that you can have access to this generation source when you need it? [DRAFT TRANSCRIPT ONLY]
I'm sure that the minister could provide me with models and graphs to show that there was a spike in generation at Burrard in the late '90s. Again, the reason for that was that the market was pretty irresistible for any government. It happened to be a government that I was involved with, but I would argue that if the opportunity presented itself to this government, $1,200 a megawatt hour is an awful lot of money. It was an intoxicating point in time. [DRAFT TRANSCRIPT ONLY]
Regrettably, we haven't been paid in full, and that's a question that I've asked the previous ministers, and I don't want…. If you've got a ready answer to how that's going, I'd like to hear about it, but I want to get back to the original point, and that is: what hard work, pencil-grinding work, did the Crown and the ministry do before they submitted their special direction to the Utilities Commission? [DRAFT TRANSCRIPT ONLY]
This is going to cost ratepayers money, and I want to know how much thought went into that, rather than the wishful thinking that we all share in this committee, that the world would be a better place if only everything is done to standard. This is going to cost people money. How much is it, and did you do that work? [DRAFT TRANSCRIPT ONLY]
[1510]
Hon. B. Lekstrom: To assure the member, there was a great deal of work done on the issue. There were actually thousands of pages of paper filed under the LTAP, looking at the phasing-out of Burrard. The cost to run that, whether it be at 3,000 or at 6,000, as the BCUC decision had indicated it could possibly be…. I think there are a number of things — the price to run that with the carbon tax, with the fuel to run it, and with the issue of having to purchase offsets for the greenhouse gas emissions that would be emitted into the airshed. [DRAFT TRANSCRIPT ONLY]
If that plant were run at 6,000 gigawatt hours per year, we all know that that would be the single-largest emitter of greenhouse gas emissions in British Columbia, in one of the most challenged airsheds in our province. Not only have we done the work, a great deal of it, but it is the right move. It is the right thing to do for the people of British Columbia, particularly for the people that live within the Lower Mainland airshed. [DRAFT TRANSCRIPT ONLY]
I would hazard a guess that if this facility were to run at 3,000 or 6,000 gigawatt hours a year, people would be marching in the street demanding a better quality of air for them and their children to breathe. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I don't disagree with that, but again, it's the backup generator. We all know that. When the minister and others use language like, "We're phasing out Burrard Thermal…." We're not closing Burrard Thermal. Burrard Thermal will remain in place for VAR support for those days in December and February, when we need it. That's in my mind, in my reading of the interpretation. [DRAFT TRANSCRIPT ONLY]
I know you've got staff who had to sit through many, many hours at the commission, and I do not envy them that task. I've spent, you know, odd hours at the commission and run out of the room, but I'm very grateful that the people attend and do the good work that they do there. It's not my cup of tea. I would suggest it's probably not the minister's cup of tea. [DRAFT TRANSCRIPT ONLY]
But in the analysis that was presented by Hydro at the LTAP, it's an interpretation of up to a billion dollars in cost to proceed down this road. We need to replace that capacity. The government has announced just recently, or Hydro announced, 13 new IPPs. This is a divisive issue. This is where the minister and I divide significantly on a direction for the corporation and for the province. [DRAFT TRANSCRIPT ONLY]
I think that an indication of who the minister consulted with beyond the IPP community…. Before he issued this special direction, did he talk to the B.C. Sustainable Energy Association? Did he talk to resource economists, who regularly attend the commission? Did he talk to the Public Interest Advocacy Centre? Who did he talk to? Or was it just the self-interested IPP community that drove us to this decision? [DRAFT TRANSCRIPT ONLY]
[1515]
Hon. B. Lekstrom: I'll start by clearing something up. I think it's fair to say for the people, as I've said, that there are probably tens of thousands watching us here this afternoon as we go through these estimates. [DRAFT TRANSCRIPT ONLY]
Interjection.
Hon. B. Lekstrom: Millions, as the member across says. [DRAFT TRANSCRIPT ONLY]
At no time was there a single focus to speak with our IPP community only on this. There has been a wide array of discussion with stakeholders, with interveners, with British Columbians going back as far as 2001. It was part of our platform then. It has been part of our energy plan. This is not a new discussion. This is a discussion that has been going on for some time. I think there has been a great deal of dialogue on this. [DRAFT TRANSCRIPT ONLY]
Again, I do go back. I believe we agree that it may be the right thing. It is in my eyes, and I can't put words in the member's mouth, my critic. But at the end of the day, this is about, again, finding a balance, making sure we meet our electricity needs, making sure we do it in an environmentally responsible manner and ensure that one of the most challenged airsheds in British Columbia is looked after. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Again, the language that's used by the minister and the government is misleading. When we say "phase out Burrard Thermal," it's not going to close. They're not going to level the plants. They're not going to stop burning natural gas to meet peak demand or to meet our needs should there be a catastrophic event in the Peace or the Columbia. [DRAFT TRANSCRIPT ONLY]
Again, I think it would be useful for us all to agree that Burrard Thermal is going to stay as it always is, and the direction from the minister is so that the commission does not look at it as a baseload plant, even though it hasn't been, for a decade and a half, contemplated as a baseload plant by Hydro, by government or by anybody. [DRAFT TRANSCRIPT ONLY]
I hope the minister agrees that we are not closing it. We're not levelling it. There aren't going to be condos in Port Moody as a result of this. It's staying right where it is. Hydro will continue to pay grants-in-lieu or whatever taxation regime is in place. If I'm mistaken, I think that will be good news or bad news in Port Moody. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The issue is…. And he is correct. This is not going to be decommissioned in the sense that this plant will be levelled. There will be other…. Whether it be condos or whatever, this plant will remain, as we said. It is right next to the largest load centre we have in British Columbia. It will be there for emergency backup. But it has been taken out. With what this OIC has done, it is now out of the planning cycle for B.C. Hydro. [DRAFT TRANSCRIPT ONLY]
We have been a net importer of electricity for eight of the last nine years as a result of having to maintain that within the planning purposes for B.C. Hydro. So although it will remain, it is our intent to actually acquire our electricity in British Columbia through clean, green, renewable sources. We think that's clear, that British Columbians are proud of that fact and the ability we have in our province. [DRAFT TRANSCRIPT ONLY]
But I do want to assure the people, and I have spoken to the mayor as well, about the grants-in-lieu, for example. It is an issue. They were concerned. Does this mean they would lose that? No, it doesn't. But we are going to be electricity self-sufficient once again in this province. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, it's interesting that we go from self-sufficiency to wanting to export to displace. That's, again, another one of those contradictions where we have rhetoric, not just from the minister but from the Premier and others, that, "This is where we're going; we need to make sure that the lights stay on," and: "This is where we're going; we need to export aggressively." We have the panels that were announced. I'm going to get to that in a minute. [DRAFT TRANSCRIPT ONLY]
On the question, again, of the impact of this decision, has there been an analysis done on what the impact will be on ratepayers? Will this lead to an increase in the short term or the long term in costs to ratepayers? [DRAFT TRANSCRIPT ONLY]
[1520]
Hon. B. Lekstrom: Well, the issue is one that really depends on what we replace that power with. I know the member spoke earlier that in 2000 the plant was run at a significant rate because the spot price was $1,200. We do not want to put British Columbians in that position, to have to depend on the spot market. We are going to go and ensure that we have clean, green, renewable electricity to meet our electricity demands. We think we're very blessed in British Columbia to have that ability to do that right here within our own province. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Currently, the provincial government owns a block of electricity known as the downstream benefits from the Columbia River treaty. That power is now sold in the United States for profit — a line item in the budget every year. Does the minister consider this asset to be part of our domestic supply, or does he see it as some other source of energy? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The downstream benefits to the Columbia…. I'm pretty sure I'm going to tell the member something he knows already. That electricity is generated in the United States. If British Columbia needs it, we have the ability under emergency situations to access that. It is not part of our planning cycle or planning purposes within B.C. Hydro to meet our domestic need, nor is it part of our electricity self-sufficiency that we're going to meet by 2016. It is not part of that planning either. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, can the minister explain why it's not part of that planning cycle and why the minister and government wouldn't take advantage of this provincial asset to meet our energy supply needs in a cost-effective way and protect ratepayers from the shock of having to pay excessive prices for independent power? [DRAFT TRANSCRIPT ONLY]
We have access to 1,100 to 1,400 megawatts of power. We could bring it back. We could meet our domestic needs, and we could do it in a more cost-effective way than purchasing high-priced IPP power, which appears to be more important in terms of meeting our self-sufficiency than using the power that's available to us today. [DRAFT TRANSCRIPT ONLY]
[1525]
Hon. B. Lekstrom: Member, right now we have that power electricity when we need it. It actually generates, on average, about $250 million a year for British Columbians. It helps us deliver the services that all of us, not just the people in this Legislature, are so proud of — British Columbians. [DRAFT TRANSCRIPT ONLY]
We talked about…. You mentioned the high-priced IPP power. I do want to point out — and I think that there's a real misconception out there — that the average price we're paying right now for the power that we purchase from IPPs is $66 per megawatt hour. [DRAFT TRANSCRIPT ONLY]
I think people in British Columbia, if they follow the pricing of electricity, would be extremely happy with that price in today's world, and I know that other jurisdictions would be as well. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Can the minister advise the committee what the projections are for rate increases as a result of purchasing or acquiring new sources of supply exclusively from independent power sources? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The cost of new supply today, when we go out to purchase that, whether it is B.C. Hydro facilities being upgraded and bringing on additional supply or whether it's through the independent power producers of British Columbia…. It costs more to produce electricity today than it did 30 years ago, without question. [DRAFT TRANSCRIPT ONLY]
But he was talking about: is this reflected in rate increases? The cost of new supply is only one driver of those rates. Other drivers are the investment. We have invested $8.7 billion over the last eight years in capital upgrades, which also drive the price of our electricity. [DRAFT TRANSCRIPT ONLY]
There's a great need for capital infrastructure upgrades, whether it be through B.C. Transmission Corp for our transmission or through B.C. Hydro for generation and distribution. There are a number of factors that come into play when we look at hydro rates. [DRAFT TRANSCRIPT ONLY]
Probably the most important thing that we could…. I think that we would all agree on this: British Columbia has been fortunate. It is one of our competitive advantages here in British Columbia with the electricity prices we have. We traditionally have between —I believe I said this earlier in the day — the second- and fourth-lowest electricity rates in North America. We're going to continue to ensure that we continue with that competitive advantage here in British Columbia. [DRAFT TRANSCRIPT ONLY]
J. Horgan: The minister referenced earlier, in the previous answer, the average cost of independent power to be in the area of $65 a megawatt hour. I would be delighted to see the analysis that demonstrates that. Everything that I have seen from B.C. Hydro has it pegged at between $88 and $120 per megawatt hour. [DRAFT TRANSCRIPT ONLY]
Perhaps I could suggest to the minister that if he wanted to put to rest this debate, he should open up the contracts for public scrutiny and thereby leave it to individuals to assess these impacts rather than taking his word or mine. If the public had access to these documents and these contracts, they'd be in a much better position to assess the efficacy of this policy. As it is now, we are left to speculate and guess. [DRAFT TRANSCRIPT ONLY]
[1530]
As of today, I'm not even aware of the 13 companies. And I am paying attention — you may not think that — as the critic. You may think that I just play golf on the weekends and drink pina coladas during the week. But I don't know who the 13 companies are that have been given a shot at the gravy train through the IPP contracting process. [DRAFT TRANSCRIPT ONLY]
Why don't we settle this once and for all? Open it up, and let everyone have a look. Let's see the contracts. [DRAFT TRANSCRIPT ONLY]
[D. Hayer in the chair.]
Hon. B. Lekstrom: I do want to point out, with all due respect, that the average cost that we're talking about is actually in B.C. Hydro's annual report on page 61. You'll find that information there. We also have to file, under section 71 filing, all contracts that come forward with the BCUC. They review this and ensure that it is in the public interest. [DRAFT TRANSCRIPT ONLY]
As to your comment about the people that were in this clean power call, it is on the B.C. Hydro website. The names of the companies are there. I encourage you, if you haven't had the opportunity yet, to go to that website and have a look. It actually is available to the member there. [DRAFT TRANSCRIPT ONLY]
J. Horgan: The minister is saying that all contracts with independent power producers signed by B.C. Hydro are available — every jot and tittle, every paragraph — for public scrutiny on the website? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: What I did say, and I want to make sure this is very clear, was yes. You can access that through the BCUC. But what you wouldn't access is the commercially sensitive data that relates to individual companies, for example. [DRAFT TRANSCRIPT ONLY]
The contracts that are filed — you can get that through the BCUC. I'll give you an example. In 2006 all of the prices and the range of prices were disclosed. It wasn't tied to individual companies. Hopefully, that helps. I think it's good information not only for the member but for all British Columbians who are interested in following this file. [DRAFT TRANSCRIPT ONLY]
[1535]
J. Horgan: Just for the minister and others, if they haven't been able to check the mid-C price today, it's $29 a megawatt hour. So $66 doesn't look so sweet beside $29, but I'll proceed. [DRAFT TRANSCRIPT ONLY]
During the LTAP application B.C. Hydro stated the following: "Net revenues from non-firm energy can be negative in years with relatively low amounts of heritage hydro due to the cost of non-firm purchases from IPPs." [DRAFT TRANSCRIPT ONLY]
Perhaps Hydro staff can explain and reconcile that statement with the statement that the minister made earlier about the cost-effectiveness of IPP power. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Member, could I ask you to repeat that question? I apologize. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'll read the quote for the minister and staff. This is from the LTAP filing: "Net revenues from non-firm energy can be negative in years with relatively low amounts of heritage hydro due to the cost of non-firm purchases from IPPs." That's the end of the quote. [DRAFT TRANSCRIPT ONLY]
In my opinion, it puts the lie to the statement the member made earlier that this is a cost-effective and useful way for B.C. Hydro to plan into the future. The mid-C price today is $29 a megawatt hour. The average price, according to the minister, is $66 a megawatt hour for IPP power. The LTAP application said that the high cost of IPP power sometimes reduces net revenue to the Crown. Somewhere in there rests the truth. [DRAFT TRANSCRIPT ONLY]
I'm not suggesting that the minister is trying to mislead. I want to be clear on that. This is complicated stuff, and we don't have at our fingertips the information that we need to adequately assess this. Thank goodness we're not the Utilities Commission. But the facts remain the same — 29 bucks a megawatt hour today if you're buying it on the market, 66 bucks by your estimation, $88 to $120 a megawatt hour by the estimations of the data that was available through the 2006 call. How is it possible that this is a good way for us to proceed? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I will note that, as you say, today's spot price is $29. I think that about two weeks ago, it was $55. Earlier in the questioning the member himself talked about the year 2000, when the spot market was $1,200. [DRAFT TRANSCRIPT ONLY]
I believe that as responsible British Columbians, as a responsible government, we have a job to bring some certainty to British Columbians with the purchase of electricity that can meet our needs and not be at the volatility of the spot market. I think that creates challenges. I think we've seen other jurisdictions on the brink of bankruptcy as a result of getting caught by this spot market price fluctuation. [DRAFT TRANSCRIPT ONLY]
We're committed to developing an incredible electricity-generating sector here in British Columbia in cooperation with B.C. Hydro, in cooperation with independent power producers. But at the end of the day, I can assure the member — and we've had this discussion — that this is about cost-effective electricity. It's about our ability to develop clean, green, renewable electricity and something that I know we're all very proud of. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Again, in Hydro's own documents, in their filing to the commission, they said that the high price of IPP power puts them in a difficult position to manage their heritage resources and to provide revenue for the Crown to keep rates stable. It's a destabilizing effect. [DRAFT TRANSCRIPT ONLY]
[1540]
That's not to say that leaving ourselves open to the vagaries of the marketplace…. Although I do think it's important for the record that the bizarro world that we lived in, in 1999-2000 was not a result of a stable market. It was about a deregulated marketplace that was trying to find its way, and a corrupt and bizarre organization called Enron that drove prices up. They didn't produce electricity; they just pretended to move it around. That was a situation that I don't imagine we're going to see repeated in the short term. Who knows what the long term holds? [DRAFT TRANSCRIPT ONLY]
The concern I have is that overall, on average in the past five years, the spot market has been below the price that Hydro has paid for interruptible — in some cases — supply from independent power producers. [DRAFT TRANSCRIPT ONLY]
I was involved with the government of the day when Premier Harcourt announced a drive to encourage independent power production. I was there, and I did support that — micro-hydro, small-scale, 20 megawatts, 10 megawatts, generated at source where it was going to be used. [DRAFT TRANSCRIPT ONLY]
Some of the proposals being brought forward by companies such as Plutonic Power are to rival our heritage assets. These are not small-scale items. The private sector ability to generate electricity below that of B.C. Hydro, I believe, is not sound when it's on a scale of that size. So IPPs when they're small, focused…. [DRAFT TRANSCRIPT ONLY]
I was up in the member's constituency just looking down at his home in Dawson Creek, visiting the Bear Mountain wind farm — a fantastic proposal, cost-effective. It's interruptible, but in concert with our reservoirs, it's a good idea. I would prefer that it was publicly owned; I'm not going to quibble about that. What I do worry about is shareholders being first call on profits from independent power producers such as Plutonic, rather than ratepayers. [DRAFT TRANSCRIPT ONLY]
I'm going to move on to another subject, hon. Chair, because we're running out of time, but this is my partisan poke for the day. I firmly believe that the road that the government is on and that the minister has inherited is the wrong one. The balance that he talks about on all other things is lost in this file because Hydro is incapable of participating in new sources of supply outside of upgrades at existing facilities or buying part shares in private facilities such as Waneta. [DRAFT TRANSCRIPT ONLY]
With that, I'd like to move on. I know the minister might want to have a poke back at me, but I'd like to move on to smart meters, because this is an issue that was at the front of a throne speech or two. As the staff are thumbing through their pages, I hope there are a lot of pages there. As I understand it, this is a near billion-dollar adventure, and I have yet to see a business plan. [DRAFT TRANSCRIPT ONLY]
Last year…. Actually, it wouldn't have been last year; it would have been the year before. We didn't have estimates last session. The session before, I was assured that there would be a business plan before Hydro proceeded with the smart meter process. I'm wondering if the minister could update me on the status of that. [DRAFT TRANSCRIPT ONLY]
[1545]
Hon. B. Lekstrom: Because we are attempting to be non-partisan here, as the member said earlier, it won't be a shot. I just want to respond briefly to a couple of the comments. [DRAFT TRANSCRIPT ONLY]
B.C. Hydro, you indicated, was excluded from generating or entering into new generation. In fact, that's not the case. B.C. Hydro can actually develop new electricity, certainly, if there is a cabinet approval process — for instance, the Site C project that is being discussed right now, were it to be entertained. So B.C. Hydro does have the ability to move forward if they so wish. [DRAFT TRANSCRIPT ONLY]
The other one is that our system…. This is where we do disagree. It's not negatively affected with our independent power production and the sources we generate. We have firm power. We have non-firm or intermittent, such as the project you referred to. Bear Mountain Wind, for example. I believe wind is about 32 percent efficient because of the way the wind blows. [DRAFT TRANSCRIPT ONLY]
So we have the ability within our system. We have probably the most flexibility of any hydro system, electricity system, with our shaping capability and our firming capability. So really, just a bit of a rebuttal to the last comments. [DRAFT TRANSCRIPT ONLY]
I'll move on now to your question on smart metering. The price, actually, on the smart meters that we're talking about is $575 million. The $1 billion that you're referring to includes such things as the smart grid, theft detection. So the actual metering itself that we're talking about is $575 million. We will meet our commitment to have these in place by 2012. We will be filing in the spring, I believe, our full business case with the BCUC, and we look forward to that. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I want to ask another question on wind, so I'll do that, and then I'll come back. I'll do two questions. We'll do them two at a time. We might actually get more done. [DRAFT TRANSCRIPT ONLY]
The Dokie farm in Chetwynd. Did B.C. Hydro contemplate or aggressively consider purchasing that opportunity when it became available? Again, that would be an ideal opportunity to get into the wind game, and I'm wondering if B.C. Hydro availed themselves of that. So that would be the first question. [DRAFT TRANSCRIPT ONLY]
The second question is on the smart grid versus the smart meters. Again, as this was proposed to the public through press releases and announcements by the previous minister, it was heading towards a billion dollars. [DRAFT TRANSCRIPT ONLY]
I'm delighted with the efficiency of the new minister that he's almost cut that in half. But I guess my question is: where's the plan? If the minister's answer is, "Wait and see," that's a long time to wait for a billion-dollar investment. As a preliminary glimpse at what the impacts of that smart meter decision will be, has there been an analysis at this point on what the impact on rates will be as a result? [DRAFT TRANSCRIPT ONLY]
[1550]
Hon. B. Lekstrom: On the first question regarding Dokie Wind. B.C. Hydro did have a look at that originally, but because there were other proponents that were interested, it was left to them. We didn't need that. We actually have the ability within our system. [DRAFT TRANSCRIPT ONLY]
So there was interest expressed. The Dokie Wind project was in CCCA. I think the member is aware of what transpired there. I believe there's a proponent now that we have seen step forward on that. [DRAFT TRANSCRIPT ONLY]
You asked: "Was there any consideration?" There was consideration. The determination was made that it wasn't in B.C. Hydro's interest because of the interests expressed by other parties. [DRAFT TRANSCRIPT ONLY]
The smart grid versus smart meters. There is work ongoing right now. For instance, the work, as I said, is ongoing. There hasn't been a technology chosen yet, for example, so to say that there will be a full public document.... [DRAFT TRANSCRIPT ONLY]
That won't be available until the public filing with the BCUC. That's when all of the work will culminate in the business plan in what we would like to put forward. Ultimately, as we've talked before, the BCUC will review that and make a determination: is it in the public interest or not? [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, I guess smart meters will come in the spring. We'll do it then. [DRAFT TRANSCRIPT ONLY]
The minister confirmed my belief, and this is why I sit on this side of the House, I suppose. The minister suggested on the Dokie file that Hydro backed off because there were other parties interested, and that seems to me to be the problem. [DRAFT TRANSCRIPT ONLY]
If B.C. Hydro can't aggressively participate in finding new sources of supply, then, in my opinion, their hands are tied and they're left to refurbish Mica and Revelstoke, ponder Site C — which the minister knows as well as I is a very controversial subject, certainly in his neighbourhood. I was there the other day and was treated to a whole host of views that are, of course, interesting to the minister, who has to answer to them on election day rather than just here in estimates. [DRAFT TRANSCRIPT ONLY]
Maybe he'd like to restate it. I do want to go back to this. The Dokie project was available. Hydro had an opportunity to get into the wind game so it that could raise the stakes a little bit for these private players — so that Hydro could be setting the benchmark for these private players — and they stepped away because other parties were interested. [DRAFT TRANSCRIPT ONLY]
That strikes me as reducing the ability of Hydro to grow and be all it can be. It's often said to me by some of the people that I interact with who are not fans of B.C. Hydro…. I know that this will surprise the vice president — that there are some people that don't embrace Hydro as I do, with love and affection. They say that B.C. Hydro is a disaster. It's out of control. Its bureaucracy is growing. Its contracts are wildly out of sync with other…. [DRAFT TRANSCRIPT ONLY]
I disagree with that. I'd like to think, instead, of the Hydro we want to see rather than, maybe, the Hydro that we do have. So here was an opportunity for Hydro to get into the wind game — a lot of work had already been done — help out the private sector company that was in distress, get in there, participate. Instead, if I understood the minister's answer, we stepped away because other people were interested. [DRAFT TRANSCRIPT ONLY]
That seems to me to be constraining the Crown rather than letting it flourish. [DRAFT TRANSCRIPT ONLY]
[1555]
Hon. B. Lekstrom: Let me start by saying — and I guess we're both looking for a little clarification from each other at this point — that B.C. Hydro is not a disaster — not today, not in the past, not in the future. I think most British Columbians.... [DRAFT TRANSCRIPT ONLY]
Interjection.
Hon. B. Lekstrom: And I see the member agreeing. So I think we have an incredible Crown corporation there that does incredible work, and the people that work there are incredible staff. [DRAFT TRANSCRIPT ONLY]
As I said, and to clarify to the member, B.C. Hydro sought to understand all aspects of the Dokie project. I think that's fair to say. But we were the party that was without question least able to do this project. Our expertise is not there. B.C. Hydro's expertise is in large hydro development. They do an amazing job of that. [DRAFT TRANSCRIPT ONLY]
The other parties that were coming to the table had experience and expertise in the wind field. So that, hopefully, helps clear up my initial statement for the member. But I think we have an incredible future, and again I go back — B.C. Hydro is an amazing organization. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, as I understand it, Plutonic Power, the successful bidder, has no wind expertise any more than B.C. Hydro, and the advantage of participating in the wind market is to have an asset in the wind market. [DRAFT TRANSCRIPT ONLY]
Hydro retains private sector expertise to meet all of its needs. Quite aside from the Allied Hydro agreement, which is a project labour agreement, Hydro doesn't have a warehouse full of cement mixers ready to drive up to the Peace River and lay a slab of concrete across the Peace River. They retain private sector expertise to meet their needs. They're a public utility with publicly owned assets. [DRAFT TRANSCRIPT ONLY]
The challenge at Dokie was: here's an opportunity to purchase an asset. A quick and nimble corporation, public or private, could have seen that opportunity and seized upon it. [DRAFT TRANSCRIPT ONLY]
Hydro didn't, and the rationale the minister is giving us is that the successful bidder had more expertise. I'm not aware of Plutonic Power having any expertise in the wind sector any more than I do. Had I had the capital, I might have participated, knowing that I would have had an ironclad 40-year contract from B.C. Hydro once I'd completed the project. [DRAFT TRANSCRIPT ONLY]
The challenge with Dokie was the credit crisis. It wasn't the technology. It wasn't the location. It wasn't the opportunity. It was access to capital, and the minister knows that as well as I do. I'm going to leave that. We're doing this two-tier inclining block questioning here, but we do need to move on. [DRAFT TRANSCRIPT ONLY]
I want to go to the most recent events within this sector that have literally caught everyone by surprise. We had the LTAP decision. We had the throne speech commitment to special direction. We've seen the special direction. We had an announcement at an independent power conference — not in the Legislature, at a private sector lunch — that the government was embarking on a course of aggressively exporting independent power. That's my interpretation of the announcement. [DRAFT TRANSCRIPT ONLY]
I'm wondering if the minister can help us through this. We saw the resignation of the CEO, I believe, although I did see a comment from the new chair that said that the reason for Mr. Elton's departure was that the corporation was moving in a different direction. [DRAFT TRANSCRIPT ONLY]
Now, again, I don't know of any expertise Mr. Doyle has in this sector, capable fellow that he is, engineer and competent as an administrator of projects. He suggested that the reason for Mr. Elton's departure was that the corporation was moving in a different direction. So that's part one of my multipart question. [DRAFT TRANSCRIPT ONLY]
The other is that we've got the CEO leaving. We've got the direction from the commission that they need to throw out the yearlong hearing and let's get back at accelerating independent power production. We have an announcement of 13 contracts that are under negotiation. [DRAFT TRANSCRIPT ONLY]
[1600]
So the question is: what direction is the Crown going, based on Mr. Doyle's comments? Can the minister name the 13 companies that are now in negotiation for power sales agreements with B.C. Hydro? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: We are covering some ground, Member, I can tell you. I wanted to go back…. You mentioned that Plutonic had no expertise in the wind field. Their partner GE actually has extensive experience in that. [DRAFT TRANSCRIPT ONLY]
But I do want, I guess, to make a comment. Earlier today we were talking about how B.C. Hydro shouldn't be involved in trying to take on a one-third purchase of Waneta dam — something that we think is in the best interest of British Columbians; obviously, B.C. Hydro does. Then here we are discussing why B.C. Hydro didn't go and purchase a wind farm. So I'm getting some mixed messages there. [DRAFT TRANSCRIPT ONLY]
The clean power call. I want to direct the member to B.C. Hydro's website. All of the proponents that are left are listed on their website. We can get you that website if you like. Okay, I see the member saying that he has that. [DRAFT TRANSCRIPT ONLY]
The issue of export. I think this is something…. I want to speak directly, not only to the member but to British Columbians. We've had the opportunity and have exported power from British Columbia for close to 30 years. It has been a benefit to the ratepayers of this province as a result of what we've been able to do. [DRAFT TRANSCRIPT ONLY]
I do want to assure not only the members across but everybody listening that our first priority is to become electricity self-sufficient once again. Our commitment is to do that by 2016. We're well on our way. We're going to meet that commitment. [DRAFT TRANSCRIPT ONLY]
We have the ability to utilize this resource for the ratepayer and taxpayer of British Columbia in a responsible manner, one that can be done in an environmentally sound manner, and I believe we'll probably get into some questions in the future on that. [DRAFT TRANSCRIPT ONLY]
When I look at our resources…. We extract our minerals. We actually have those worked; we export them. We extract natural gas. We extract what oil we have. We have that resource; we export it. It works for British Columbians and helps us deliver health care, education, social programs and so much more. [DRAFT TRANSCRIPT ONLY]
I think we have a significant opportunity, with our clean, renewable electricity resources that we have in British Columbia, not only to help reduce our greenhouse gas emissions and meet our domestic demand but to help others actually reduce their greenhouse gas emissions and meet their electricity needs as well. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I support exporting electricity. I did that proudly in a previous administration. That wasn't the point. The point was that the government took us down a course of promoting independent power production in watersheds that might not necessarily have been the first choice if you were planning an integrated system as B.C. Hydro would have done. [DRAFT TRANSCRIPT ONLY]
[1605]
Rather, they went to a call for proposals. The first people in the door got the best sites, whether it be Bear Mountain, Dokie or NaiKun in terms of wind. The private sector got access to those before Hydro did, and that was the imbalance in that case. [DRAFT TRANSCRIPT ONLY]
The challenge is not that we shouldn't export electricity, because I believe we should when it's advantageous to do so, when it's in the interests of British Columbians to do so. B.C. Hydro can't save the world from climate change. It can assist, absolutely, but it cannot save the world. [DRAFT TRANSCRIPT ONLY]
The first premise for accelerating independent power production was: "We'd better do it because all lights are going to go out." That was the argument. "We need to be self-sufficient in these brave new worlds. We need to be self-sufficient." Well, we've dropped that now. It's still on the books. We're still heading for 2016. I understand that. But let's try a new sales pitch. The new sales pitch is: "Let's save the world. Let's develop more independent power for export." [DRAFT TRANSCRIPT ONLY]
My argument is not that I disagree that export is not advantageous to British Columbians in terms of selling when the prices are right and buying when the prices are low. Hydro has been doing that effectively for all of us for a long time, before this government and before the government that I was involved with. [DRAFT TRANSCRIPT ONLY]
What bothers me is that it's all about messaging. We've always been exporting, so now it's going to be…. We're going to see the advertisements. I can see them now. There are going to be kids running on the beach, and it's going to be: "If only we had more power to export, everyone could run around on the beach." That's the part that troubles me. [DRAFT TRANSCRIPT ONLY]
These are the points that the minister and I enjoy in the hallway, and we're doing it now, live. Fortunately, Oprah is now on, so our audience share has dropped like a stone. The 10,000 that were on before are down to our parents and immediate family members. [DRAFT TRANSCRIPT ONLY]
We can go back and forth on this. We have a disagreement — not a personal disagreement, a policy disagreement. I believe that the government is going in the wrong direction. This side of the House believes the government is going in the wrong direction. [DRAFT TRANSCRIPT ONLY]
The balance that I always hear from the minister, personally and publicly, I embrace. But the policy is not balanced if Hydro can't participate in the marketplace not just on projects approved by cabinet but the whole baby. If you can't get in the game, you're not going to win, and that's where Hydro is eroded as a positive utility for British Columbians, in my view. The minister and I disagree. [DRAFT TRANSCRIPT ONLY]
I want to go back to the question again. Dan Doyle, the new chair — I don't believe he knows anything about electricity beyond those are lightbulbs, and that's the switch on the wall, but now he's running this corporation. He dismissed the CEO — long history in the sector — and said they were going in another direction. Can the minister advise what direction that is? [DRAFT TRANSCRIPT ONLY]
[1610]
Hon. B. Lekstrom: I do want to assure, again to the member, that our first priority and B.C. Hydro's first priority is to ensure that B.C. is once again electricity self-sufficient. That is our first priority. We believe that the resource opportunity before us in British Columbia, as the member said, under the right circumstances — exporting electricity and having that work for British Columbians — is a good idea. We agree on that. We're going to continue down that. [DRAFT TRANSCRIPT ONLY]
I believe he indicated there was a challenge that this wasn't a benefit. This is about economic development in every region of this province — the economic opportunities that avail themselves through development of independent power projects, for example. [DRAFT TRANSCRIPT ONLY]
As well, I want to respond briefly. B.C. Hydro, you mentioned, couldn't respond to opportunities. I believe they can. I think they do a tremendous job of that. I'm not sure if I interpreted that properly. If I didn't, I guess I'll just reiterate about B.C. Hydro then, saying that I think they're an incredible Crown corporation. [DRAFT TRANSCRIPT ONLY]
They respond on behalf of all of us. I think — and whether we agree or disagree on this is still to be proven — the Waneta deal, for example, is a response by B.C. Hydro for the benefit of British Columbians. [DRAFT TRANSCRIPT ONLY]
Moving on to Mr. Elton, I'll take this opportunity to say publicly that I want to thank Bob for the work that he did on behalf of British Columbians. He served for six years as the top fellow at B.C. Hydro, as the CEO. That's the longest-serving CEO we've had, I believe, for B.C. Hydro. He accomplished a great deal and did a tremendous amount of work on behalf of all of us, not just that Crown corporation. As I've said, a huge thank-you goes out to him. [DRAFT TRANSCRIPT ONLY]
But he is staying on as well. We will gain from his experience. He will remain as a special adviser to the board of B.C. Hydro as well as the CEO of Powertech Labs. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Was it Mr. Elton's decision to leave, or was it Dan Doyle's decision to move him? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I'm not about to discuss personnel issues here in estimates of the Ministry of Energy, Mines and Petroleum Resources. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well, it seems to me a legitimate question. We've had the longest-serving — I'm not sure if that's true, but I'll take the minister at his word — CEO in B.C. Hydro's history — a giant, a pillar, by the minister's account. I share that account. I think Bob Elton is a top-rate guy, and he's done a pretty good job under difficult circumstances. But when he left or when he moved to be an adviser to the board and an adviser to Powertech, the chair who reports to the minister advised the public that the corporation was moving in a different direction. [DRAFT TRANSCRIPT ONLY]
I think it's a legitimate question to ask if that new direction was the result for Mr. Elton to decide that he wanted to only be an adviser, or was it Mr. Doyle's decision that he should only be an adviser? [DRAFT TRANSCRIPT ONLY]
[1615]
Hon. B. Lekstrom: The question. It was Mr. Doyle's decision to make a change with the CEO. I believe he made that clear in his comments as well. Hopefully, that is a clear answer for that question. [DRAFT TRANSCRIPT ONLY]
J. Horgan: That is a clear answer. But Mr. Doyle intimated that the corporation was moving in a different direction, and I'm wondering what direction that is. [DRAFT TRANSCRIPT ONLY]
I also want to go back to…. The minister said that self-sufficiency was the highest priority. Is it high or highest priority? It's kind of like George Bush. The worst president or just a bad president? The reason I ask this is that I'm wondering where the ratepayers fit in all of this because that certainly — and I think the minister is going to stand and agree with me…. That is where we should be putting our energies — that is, to try to ensure that we do maintain low-cost, clean and green energy for British Columbians. [DRAFT TRANSCRIPT ONLY]
My concern about the self-sufficiency debate is…. I went back and forth with the previous minister, and it was more rhetoric on both sides than anything else. Where does the ratepayer fit in all of this? Is self-sufficiency by a date certain by legislation now in the best interest of ratepayers? I'm not sure that it is. I think you can get to that objective. [DRAFT TRANSCRIPT ONLY]
When I'm doing renovations at my home I don't say that I have to have it all done by a certain day, because then the contractors that come in know that I'm stretched for time and that I have to have it done because this is what my lease says or what my mortgage says. It's just bad planning. It's bad economics. [DRAFT TRANSCRIPT ONLY]
Where does the ratepayer fit in the self-sufficiency gambit and perhaps in the whole game here of improving the bottom line for independent power companies, providing economic opportunities for their shareholders? Where are the ratepayers in all that? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I think we will share this vision. I can assure you that the ratepayer is the top priority not only for our government but for B.C. Hydro. I believe that it always has been and always will be. I think the leadership that is there and the public recognize that when we talk about price, this is also about environmental responsibility. [DRAFT TRANSCRIPT ONLY]
You talked about: do we have enough time? The 2016 deadline. When we talk about the ratepayer, is it to achieve that at all costs? [DRAFT TRANSCRIPT ONLY]
[1620]
I don't believe so. The special direction came in 2008. It allows us eight years to become electricity self-sufficient, to meet our demand, and 50 percent of that was to be met through conservation and B.C. Hydro. [DRAFT TRANSCRIPT ONLY]
Where we're at is actually far ahead of that — 72 or 73 percent. Conservation is at a cost of less than four cents per kilowatt hour. There's some good work, but to be very clear, the ratepayer — as the minister responsible for this Crown and in the eyes of B.C. Hydro and our government — is the number one priority. I want to assure not only the member but every British Columbian that's watching. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Certainly, it hasn't been the minister's responsibility — the most recent round of rate increases. They've been significant — upwards to 20 percent over the past number of years. [DRAFT TRANSCRIPT ONLY]
I'm wondering again, and I have kind of posed these questions with respect to Burrard Thermal and with respect to…. We're going to get to the Transmission Corporation soon and the enormous investments there, some to enhance the grid and some, now I understand, for smart grid and still more expenditure to hook up independent power producers wherever they may be. [DRAFT TRANSCRIPT ONLY]
So the challenge for me, for the minister and for all of us in this place is that when the bill comes in and it's higher than it was before, they look to the government of the day. They don't look at me, and they don't look at the dismal '90s or the bad Socreds. They look at the minister responsible, and he's sitting right over there. [DRAFT TRANSCRIPT ONLY]
There have been significant rate increases. There are projected rate increases in the coming fiscal year. I'm wondering if there has been the rigour and due diligence on all of these policy decisions that came out like balls in a 6/49 machine, whether it be the special direction, whether it be responding to the LTAP or whether it be the Premier's announcement about advisory panels that have no terms of reference that I'm aware of. Maybe the minister is going to table those today. [DRAFT TRANSCRIPT ONLY]
I don't know who the people are that are sitting on these panels. Are they doing it for a dollar a year? If there is a cost, is it going to be absorbed by government? Is it going to be absorbed by the Crown? If it's being absorbed by the Crown, it's then going to be passed on to ratepayers. A whole bunch of activity may well be all to the good, but we don't have terms of reference, and we don't have time frames other than some time in January. [DRAFT TRANSCRIPT ONLY]
Maybe the terms of reference will be more specific on that. We don't know who is participating and who has been asked to participate. A lot going on in the sector, and we're running short of time this afternoon. I want to just go back, if I could, to these panels. Can the minister advise when we can anticipate seeing terms of reference? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: We do want to, and we will, deal with this in a respectful manner. I think that the member probably knows where I'm going to go on this. [DRAFT TRANSCRIPT ONLY]
The rate increases since 2004 — to April 1, 2009 — have been 17 percent. There are most definitely rate increases taking place, but there was a rate freeze for ten years in this province during the 1990s, during the previous government's administration. [DRAFT TRANSCRIPT ONLY]
[1625]
I know that on its surface many people think the rates not going up are a pleasant thing, but the reality is that took place as the infrastructure began to deteriorate, and there was limited capital investment in our infrastructure. We are investing extremely large amounts of money to bring both our generation and transmission systems back up. [DRAFT TRANSCRIPT ONLY]
There's obviously a concern. I know that they will point to this minister being responsible if they look at rate increases, but I will stand here and say that I'm a big supporter of investing in infrastructure. I think infrastructure is the backbone of our province, and B.C. Hydro is a big part of that backbone. Most definitely, that is the reason we're seeing that, without question. But had we not had ten years of what I would consider minimal investment and a rate freeze, we wouldn't be in the position today to be playing catch-up on that. [DRAFT TRANSCRIPT ONLY]
The other one — the terms of reference and the membership lists of the committees that you're referring to — will be available very soon. We're working diligently on that, and I think the member should be able to see those very soon. They will be released publicly as soon as we've concluded the work we've got on the front end of that. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Again, I don't disagree with the minister that you need to invest in infrastructure. That's what we do in our homes. That's what we do in our businesses. The public understands that. But we can't fix all of the problems at once. That was a challenge that faced the previous government and the government before that. [DRAFT TRANSCRIPT ONLY]
I often say that public policy is like a river. You bend here; you bend there; new people in the boat; different people in the boat. Sometimes we're in the same party. We've had multiple Mines ministers. I've made reference to that. I'm hopeful that the current minister will stay in the boat for longer than the previous ones, but things change. People come into these positions. We are just minor cogs in a very, very big operation. [DRAFT TRANSCRIPT ONLY]
I'm certainly not blaming the minister or his predecessor for rate increases. But one of the challenges we have is that when we take an action in one corner of the room, it's going to have an effect on another corner. [DRAFT TRANSCRIPT ONLY]
I find it very difficult to stand and defend Burrard Thermal for the reasons that the minister articulated. But in terms of public policy, you can't save all of the people in the world with one fell swoop, and the impact of one decision has an impact somewhere else. So we're simply agreeing to disagree, as I've done with previous ministers. [DRAFT TRANSCRIPT ONLY]
With that, I just want to ask a couple more questions while we still have access to B.C. Hydro staff, and those have to do with the HST and statements that the minister made after the announcement of the implementation of the HST that there would be no impact on energy. Or was it electricity, or was it natural gas? Will B.C. Hydro bills include the HST? That would be a good place to start, and we'll go from there. [DRAFT TRANSCRIPT ONLY]
[1630]
[D. Horne in the chair.]
Hon. B. Lekstrom: The HST is going to be credited to the residential customers. They will not pay. It will be a net zero for them. We made that commitment. As far as the commercial bills, though, they will pay the HST. They will claim that back through their input credits. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'm just wondering if the minister could explain to me how it becomes net zero. Is it just not going to be applied to the bills? Is that one of the exemptions that the province is seeking from the federal government? How is that going to be operationalized? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I'm going to defer that for the Minister of Finance on the detailed part of that question. What we can assure not only you, Member, but British Columbians is that the HST will not be applicable to residential bills. It will be a net zero, as I said, through a credit. I can't go into the detail of how it will show on the bill, but the key issue here is that it is HST-exempt at the end of the day with a net zero effect on residential electricity bills. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'm just wondering if the gas bill…. I know we're in the area, so let's just ask it. Would that cover home heating fuel and natural gas as well? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I'm going to once again defer and ask you to ask those questions directly to the Minister of Finance, on the detailed questions of the HST, if I could, Member. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I will do that, Minister, but I'm just wondering if you could give the answer on the net zero. Will there be a net zero on those two bills, or are you not aware of the plans for natural gas and home heating fuels? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Once again, I think that rather than go around, I will defer and ask you to ask that question to the Minister of Finance. I think he'll be better positioned to answer it directly and give you the detail that I know the member would like. [DRAFT TRANSCRIPT ONLY]
J. Horgan: This might be a good opportunity for me to exit to the room down the hall while the minister thanks the B.C. Hydro staff who've made the trek over on a blustery day and gets the B.C. Transmission Corporation staff in place. If we could just have five minutes for that. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Certainly. Just prior to our staff leaving, I do want to say thank you once again for the work that they do and echo the words of my colleague the opposition critic and ask for a five-minute recess while we change our staff. [DRAFT TRANSCRIPT ONLY]
The Chair: This committee will be in recess for five minutes. [DRAFT TRANSCRIPT ONLY]
The committee recessed from 4:34 p.m. to 4:40 p.m.
[D. Horne in the chair.]
Hon. B. Lekstrom: Just before we begin questions regarding B.C. Transmission Corp, I'd like to introduce Janet Woodruff, who is our acting president of B.C. Transmission Corporation, as well as Bruce Barrett, who has joined us and who is the vice-president of major projects. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I thank the minister for the break, and I welcome staff from B.C. Transmission Corporation. [DRAFT TRANSCRIPT ONLY]
What we're going to try and do in the time available is we're going to canvass some issues. My colleague from Delta North is going to discuss issues around the Tsawwassen transmission scenario as that unfolded. Then we're going to move to Highway 37 and, finally, end up with the Utilities Commission review that's on hold. [DRAFT TRANSCRIPT ONLY]
Those are the three general areas. There will be some other stuff in and around that, but if staff can brace themselves for that listing, we'll proceed from there. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Regarding the buyout of residents along the corridor in Tsawwassen, the high-voltage transmission lines, can the ministry tell us to this date how many properties were purchased? Was it 104? Was it 105? How much were the total costs to the ministry for such a purchase? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: We do have an individual coming back. That's actually under B.C. Hydro. We have BCTC staff with us, but somebody is on their way in. We'll get you that information as soon as they're here. If we had any B.C. Transmission Corp questions…. We'll endeavour, as soon as we have that information, to get it to you here in a few minutes. [DRAFT TRANSCRIPT ONLY]
J. Horgan: We'll then proceed directly to the questions around Highway 37. The viewing public and members of the committee will know that for some period of time, residents in the northwest have seen an opportunity for economic development, whether it be through development of mineral extraction or through micro-hydro to service the needs of local communities — not necessarily for export, not necessarily to serve some other communities but to generate electricity close to home to meet local supply. [DRAFT TRANSCRIPT ONLY]
I'm wondering if the minister could advise…. The federal government has announced that they're prepared to participate to the tune of $130 million in the project. The ballpark that I've heard for development of this corridor is $404 million. So could the minister advise what portion of that would be on the back of ratepayers and what portion would be picked up by those that would benefit most — that being mining interests along the corridor? [DRAFT TRANSCRIPT ONLY]
[1645]
Hon. B. Lekstrom: The member is correct. It is $404 million — in that range. As you've indicated, we have a $130 million commitment from the federal government towards the power line. We are presently in negotiations with the private sector for contributions on that. As well, we would expect a capital contribution in the future, should a new mine come in on that, and that capital contribution would be under the tariff that exists. [DRAFT TRANSCRIPT ONLY]
J. Horgan: When Galore Creek was on the verge of taking off some years ago, Teck and NovaGold were the two companies that were the main drivers of the Highway 37 initiative. At that time they had $158 million on the table, I am advised. That, of course, disappeared with the prospects of Galore Creek proceeding. So again, if the minister.... I understand that there are negotiations going on and that they're not concluded. [DRAFT TRANSCRIPT ONLY]
My concern is that earlier in the estimates the minister made the statement that rates were driven by investment in transmission — general rates driven by the cost of transmission. I'm very concerned. I've made this clear to the Mining Association and Mineral Exploration B.C. — that this side of the House supports economic development in the northwest to the extent that the people in the region can absorb it. [DRAFT TRANSCRIPT ONLY]
My colleague from Stikine will talk about the residents in the area, the Tahltan and others, and what their views are on the economic development that they can absorb within their communities. [DRAFT TRANSCRIPT ONLY]
Our concern is that we want to make sure that the people in the region are prepared for the development. We want to make sure that the costs of that development are not borne by ratepayers right across the Peace. Understanding that negotiations are underway, it was $158 million when Galore Creek was at the front of the line. They're off the table now. What is the ballpark that we're looking for with this negotiation with the private sector partner? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I can't give you a number, Member, right now, and it's not because I don't want to. We don't have a number. There are negotiations ongoing, as I said. As those negotiations move forward and as we bring them to conclusion, once that is completed, that number will be known. But there isn't a number that I can share. [DRAFT TRANSCRIPT ONLY]
I know you've touched earlier on a number of $158 million based on previous discussions, but right now the discussions that go on today are exactly that. They are negotiations. I would be hopeful that we secure a good, healthy contribution, and I do expect that to be the case. But again, we can't predetermine any negotiations until those negotiations are completed. [DRAFT TRANSCRIPT ONLY]
J. Horgan: The minister at the time of the federal announcement said that this was going ahead, that we're proceeding. People in Stikine and Skeena and North Coast and right across the north assumed that this was a done deal, that we're off to the races. [DRAFT TRANSCRIPT ONLY]
Based on the fact that we're still in negotiation for a private partner, based on the fact that we don't know what the provincial contribution through BCTC is going to be, can the minister advise people in the north what the time frame for development of this project would be? [DRAFT TRANSCRIPT ONLY]
Does it hinge on a successful proponent — in terms of whether it's Imperial, Shaft Creek, Galore Creek, AltaGas— any number of the opportunities in the region — whatever that might be? Are we going to be building a transmission line to nowhere without private sector partners, or will the minister today commit that this will not proceed unless there's an economic benefit at the end of the line? [DRAFT TRANSCRIPT ONLY]
[1650]
Hon. B. Lekstrom: Does this power line hinge on private capital coming? No, it doesn't. We made a commitment that we were going to build this transmission line. We had worked closely with the federal government. Their contribution came through. But we are, I guess, very positive that the private sector will come to the table. [DRAFT TRANSCRIPT ONLY]
For the people of the northwest, if the question is: will this proceed…? Yes, it will. We actually will be filing the EA by year-end, most definitely. The work that has been ongoing on that application was a commitment that the Premier made a year ago — or a little better, actually, now — for the $10 million. It was to do the preliminary work for that filing. [DRAFT TRANSCRIPT ONLY]
This, in its form…. When I look at it, our province was built with solid infrastructure and a foundation. Much of the infrastructure, going back to W.A.C. Bennett days, was put in place, really, with the future vision of what it meant to economic development in the region, what it meant to the families and those children growing up, and we see this line doing the same for the northwest. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Certainly, far be it for me to tell the minister how to negotiate, but standing up and saying you're going to go ahead regardless of private sector involvement might not be the starting point I would have taken in that negotiation. [DRAFT TRANSCRIPT ONLY]
There are 1,500 people that live along this corridor — robust people, all. This is hinterland. This is way out there. The minister knows this. The whole point of developing this area is for the economic benefit, but it should not be borne on the backs of ratepayers. [DRAFT TRANSCRIPT ONLY]
We talked, when Hydro staff were here, about 17 percent increases by Hydro's estimations. Others estimate the numbers to be higher, depending on where you start and where you finish. A $400 million investment. Even if it is backstopped by $130 million from the federal government, some of that money is coming from British Columbia as well. I'm fairly certain that the thousand people in the region may well be satisfied with some other arrangement, provided they can meet their needs locally and find job creation outside of large-scale mineral development. [DRAFT TRANSCRIPT ONLY]
Do we want to see that on this side of the House? No question about it. But we are operating under the assumption that if the private sector is not at the table, the primary benefactor of this line…. And I don't dispute that big vision leads to big outcomes, but when you're running a transmission line from communities that are without employment, past communities that barely exist, without some buy-in from the private sector, that's disturbing to me. [DRAFT TRANSCRIPT ONLY]
Again, the minister has said that he's going to fulfil, or the government's going to fulfil, the Premier's commitment. I believe it was UBCM — the minister was in a different role at that time — made a commitment to proceed with the environmental assessment process. But I would think that without a firm guarantee from the private sector in the neighbourhood that was there with Galore Creek, we would be ill-advised to put this project on the backs of ratepayers. [DRAFT TRANSCRIPT ONLY]
That's not to diminish the importance of having vision, and I respect the minister for saying that, but we're a bit out there if we don't have the private sector. [DRAFT TRANSCRIPT ONLY]
[1655]
Hon. B. Lekstrom: With regard to playing our hand too early, for example, I guess my view on that is that we haven't. The reality is that we said we were going to build this line. We were going to develop this infrastructure. Although I'm extremely optimistic, with the negotiations going on — I say that because I am an optimist — that we can reach agreement, the opportunity there is not just in mining. We have the potential for 2,000 megawatts of clean, green, renewable energy as well. [DRAFT TRANSCRIPT ONLY]
For access to this line, I think the member would agree that you would either pay at the front end as a user of this or you'll pay at the back end. So we don't feel we've jeopardized anything by saying that we're going to build this. I think the private sector realizes that there's a cost associated for them to access this line, whether it be at the front end or at the back end once the line is in place. [DRAFT TRANSCRIPT ONLY]
D. Donaldson: The minister mentions potential for 2,000 megawatts of power from that region. Can he advise, on the studies or analyses that have been done, as to where that number comes from? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: There was work done by the western renewable energy zone, which British Columbia participated in, indicating that potential. We believe that not only 2,000 megawatts of potential was there but possibly a far greater opportunity in that area as well. There was a published document under WREZ, however people would like to refer to it — but that's where that information was first at hand. [DRAFT TRANSCRIPT ONLY]
D. Donaldson: Thank you for that answer. I have a question on the environmental assessment process that you alluded to, and that's going to be completed or filed by the end of this month, I think, or by the end of the year. [DRAFT TRANSCRIPT ONLY]
Does the EA consider alternate routes for the proposed transmission line or just the single route that's been published in papers and documents? Related to that, does it just consider a 287-kilovolt line? If the line was a larger transmission line than that, would the EA cover that? Or if it's a smaller transmission line, would that present any problems to the EA as it's been undertaken to date? [DRAFT TRANSCRIPT ONLY]
[1700]
Hon. B. Lekstrom: The EA will not determine the route. We are actually looking at two separate ideas in a particular area that we may be able to put forward for them. [DRAFT TRANSCRIPT ONLY]
The other question was the 287-kV line that is being proposed. The environmental assessment office would not determine that a larger line or a smaller line…. If a determination was made in the future, if this went through the process and was approved that there had to be an alteration, that would have to go back to the BCUC at that time. [DRAFT TRANSCRIPT ONLY]
G. Gentner: I want to go back to the issue relative to the Tsawwassen power line dispute. I see that a member from Hydro will be here. My question was: how many properties were purchased — the number I hear is 104 or 105 — and how much did the corporation pay for those properties? [DRAFT TRANSCRIPT ONLY]
[H. Bloy in the chair.]
Hon. B. Lekstrom: I just want to correct a statement I made earlier. I was talking about the 287-kV line and indicated that if a change was to happen, if this project was to go ahead, they would go back to the BCUC. Me and the member have had a great deal of discussion. It wouldn't be the BCUC. It would be through the environmental assessment process — that adjustment just for clarification. [DRAFT TRANSCRIPT ONLY]
Going on to the homes. There was a purchase of 104 homes for a total of $58.8 million. [DRAFT TRANSCRIPT ONLY]
G. Gentner: How many sales have been completed on the resale right now? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: To date we have sold 21 homes. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Those are completed sales? Is that correct? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Of those sales, 11 are complete. Seven have unconditional offers, and three have conditional offers. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Okay. Of the 11 that are completed, what did the ministry pay for those 11, and what was the value of the resale? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Of the 11 homes that we have sold and completed, we have recovered 96 percent of the price that we pay or costs that we pay. [DRAFT TRANSCRIPT ONLY]
[1705]
G. Gentner: So we've lost money on it. We have to assume that — 4 percent. Yeah. Can the minister tell us how much of the total purchase cost included property transfer taxes, moving costs and appraisals and also the real estate fees? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: To get that specific breakdown, we will have to get that back to the member for those 11 homes that he's asking about. We don't have that information with us here. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Then can we break it down to within the $58.8 million paid? Did that include all the fees, or is that over and above? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Hon. Chair, $58.8 million is the acquisition cost of the homes. If the member is seeking the cost associated with moving and so on, we're going to have to get that information back to the member as well. But the $58.8 million is the acquisition cost of the 104 homes that were purchased. [DRAFT TRANSCRIPT ONLY]
G. Gentner: I'd like to indulge the minister and thank him for offering that information, and I'm looking forward to receiving it soon. That would also, I assume, include the appraisals that were done by the Atlas Group. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Yes, we will. [DRAFT TRANSCRIPT ONLY]
G. Gentner: I'd like to also ask: how much money was spent on a security firm that did an investigation on residents to see if there was any damage being done on the line before the purchases were made? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The security that was provided was during construction. It was not an investigative security, I think, as the member alluded to. This was security put during the construction. We will endeavour to get you that number, as well, when we give you the other, the exact number, and be assured that we will do that as quickly as possible. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Could we also have the videos that were taken of the residents. Is that possible? [DRAFT TRANSCRIPT ONLY]
[1710]
Hon. B. Lekstrom: With the question — I will endeavour to look into this — there will be privacy issues. I will endeavour to go through that, get that information and get back to the member as quickly as possible. I think everybody would agree that the protection of privacy is a priority for all, so we will do the work on that and get back to the member, again, on that issue. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Relative to the budget comparison between '08 and '09, it would be interesting to know if this is a new policy between '08-09. I'd like to know: who is responsible for the procurement of the surveillance? Was that BCTC, or was that Hydro? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: It was BCTC's decision. As well, I do want to clear something up. You mentioned that this was surveillance. This was actually security. There is, I believe, somewhat of a difference. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Therefore, were there not pictures taken of the area? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: I get somewhat confused. In the previous answer I gave, the member asked about the videos. We will endeavour to get that information and ensure that the issues around privacy are met and get the information and share that with the member. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Relative to the budget, I am interested to know.... We see that BCTC was responsible for the video-taking, so to speak, if we can say that on record, but I'd like to know: how is it that BCTC was involved in this operation? [DRAFT TRANSCRIPT ONLY]
Now, I want to know. Was BCTC also involved in the actual appraisal of properties, and how is it that Hydro wound up being the Crown corporation that was paying for the properties? [DRAFT TRANSCRIPT ONLY]
[1715]
Hon. B. Lekstrom: BCTC, as I said, is responsible for the security portion. B.C. Hydro has the right-of-way and, therefore, administers this program. That's how that works. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Regarding the budget, how many of the 83 remaining properties or homes are actually rented in the interim? And how much is B.C. Hydro paying in property taxes to the corporation of Delta as they sit empty? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: There are a number of people that have rented their homes back at the present time until they're sold, but the level of detail the member is seeking…. I will endeavour to get that information and get it back to him. We don't have that level of detail here with us this afternoon. [DRAFT TRANSCRIPT ONLY]
G. Gentner: I appreciate the minister's candidness, and I'm hopeful that I'll receive it sometime soon. I know we're dealing with the budgets this year, and that's detailed information, but it's relative to the budget. [DRAFT TRANSCRIPT ONLY]
We seem to see a policy shift with this budget. Now that the government is on record as paying for properties when they want to develop or improve high voltage poles or lines, so to speak…. This is a shift in policy. This is a precedent. So are we to believe now that when we increase the voltage or increase capacity along high voltage power lines, we are now going to see further buyouts in future projects? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: No, this is not a precedent that we are setting and going down. This is an issue that we dealt with. We addressed the concerns of the residents of Tsawwassen and made the decision that this was the best course of action to follow. As I said, this does not establish a precedent that we believe the member has indicated. [DRAFT TRANSCRIPT ONLY]
G. Gentner: Can the minister explain to me when this was done at an earlier period? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Between 1989 and 1991, B.C. Hydro purchased and resold 59 homes in the Gold River area after the Dunsmuir to Gold River transmission line project was built. [DRAFT TRANSCRIPT ONLY]
G. Gentner: How much money has the government set aside for any future purchases relative to proposed line improvements? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: None. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'd like to ask the minister if he can advise what the status is of the long-term transmission inquiry at the Utilities Commission. I understand it was halted abruptly. Perhaps he could explain (a) why it was halted and (b) when it will be starting up again. [DRAFT TRANSCRIPT ONLY]
[1720]
Hon. B. Lekstrom: The section 5 inquiry is what he's referring to, and this is really a long-term view. Both the B.C. Hydro and BCTC submissions…. There was a delay. We wrote to the Utilities Commission asking them to allow time to ensure that these were aligned with government policy and asking them to put back and recommend time frames as we move forward. [DRAFT TRANSCRIPT ONLY]
We expect that to take place in the future — not too distant future. I see the member smiling right away, "The future" is a pretty wide-open comment. But the work is being done right now to ensure that there is alignment with government policy on those submissions. [DRAFT TRANSCRIPT ONLY]
J. Horgan: And quite often the future is so bright, you need to wear shades. I had to get that in. I got a groan from my colleague for that. [DRAFT TRANSCRIPT ONLY]
Can the minister advise? Being in line with government policy — does that mean waiting until the panels that have not yet been appointed, with terms of reference that are not yet clear, report out? Or is it existing government policy that the minister is aligning BCTC's application with? [DRAFT TRANSCRIPT ONLY]
[1725]
Hon. B. Lekstrom: The review that we're looking at is to ensure that they align with government policy. The task force, as I indicated, will be very quickly put forward for the member and the public to see. [DRAFT TRANSCRIPT ONLY]
We will see if that will need alignment as well to help us with this. I know what the member is wondering: is the task force going to determine what takes place on these? I think that it's fair to say, and I'll be clear, that the review is taking place to ensure that the submissions align with government policy. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Well done. Yes, Minister, we'll be proud of that one, and I am proud of that one. [DRAFT TRANSCRIPT ONLY]
I have one more question for transmission staff, and I know we've got a lone survivor from Columbia Power Corporation in the gallery from the thousands that were here earlier. I do want to make the trip from Castlegar worthwhile. [DRAFT TRANSCRIPT ONLY]
Maybe, if you can't immediately do this, we could get this in written form, but I'm curious. When we talk about the investment in refurbishing B.C. Transmission Corporation infrastructure, is there any way to separate out what is refurbishing existing infrastructure and what is putting in place transmission networks and systems to service independent power projects? [DRAFT TRANSCRIPT ONLY]
There's going to be an investment in the existing grid. There's going to be an investment, apparently, in a smart grid as part of the smart meter program, and then there's, in my mind, a third component which is new transmission equipment to service new generation stations, which are all private companies. [DRAFT TRANSCRIPT ONLY]
The question is this. How much is refurbishment, how much is smart grid and, lastly, how much of the investment in the horizon that the minister wants to give me is for connecting to independent power projects? Who is paying for all three of those? Is it just ratepayers, or will it be ratepayers and the private power producers? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Within the question that was asked, the growth capital is $3.3 billion over 10 years, and that includes such things as the Interior to Lower Mainland line. It also includes interconnection for IPPs. I will get back to the member with the breakdown of that. [DRAFT TRANSCRIPT ONLY]
[1730]
The other one we invest is sustained capital of $1.8 billion, which is to maintain existing structures as well. You mentioned, just for clarification, the smart grid, and you talked about three. The smart grid is really about all the grids. It is a technology that allows monitoring to go on, find optimization. When we refer to a smart grid, it really is all-encompassing of all grids out there, to watch what takes place within the system and improve it. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I understood that, but if I'm not mistaken, the reason we've got a lower cost on smart meters is because BCTC is now picking up some of the costs of that. Is that where the smart grid component comes from? Who is going to be paying for that element? Will it be BCTC or will it be…? Ultimately, it's the ratepayers, but on whose capital line will it show up? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: There are smart grid costs associated with distribution as well as smart grid costs associated with transmission. Most of the costs will show up on B.C. Hydro. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'd like to now address some questions to the minister with respect to a small but vibrant Crown corporation located in Castlegar, British Columbia, the Columbia Power Corporation. [DRAFT TRANSCRIPT ONLY]
I want to thank very much the staff from B.C. Transmission Corporation who made the trip over. I hope that the ride back is not too rocky on a blustery night. [DRAFT TRANSCRIPT ONLY]
With respect to Columbia Power…. I know that we're running short of time, and the staff prepared themselves. I want to just remind committee members that when Columbia Power was started, it was started with a commitment of a significant amount of equity, $500 million in equity, to realize the development of three power projects in the Columbia basin: the Keenleyside dam on the Columbia River, the Brilliant expansion and the Waneta expansion. [DRAFT TRANSCRIPT ONLY]
This goes back to the question in question period today. I know that it's not necessarily germane to Vote 24, but if I were the Minister of Finance and I saw an opportunity to assist Teck Cominco with their capital challenges and I had access to the staff and resources of two public utilities, I would think that the one that had expansion rights at the Waneta dam, who had been working diligently for a decade on putting in place a clean, green, run-of-river project for public benefit, would be the Crown corporation that I would have nodded at. [DRAFT TRANSCRIPT ONLY]
[1735]
So I want to know from the minister: did the Columbia Power Corporation have an opportunity to bid on the one-third Waneta project? [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: Just before I answer the member's question, I would introduce Victor Jmaeff, the acting CEO of Columbia Power Corporation, who joins us today. [DRAFT TRANSCRIPT ONLY]
Tech did have an inquiry with CPC. There were no formal discussions that I'm aware of on that. The discussions at that point were well along with B.C. Hydro, at the time. [DRAFT TRANSCRIPT ONLY]
I do want to point out that the member mentioned a large run-of-the-river project. Earlier in our discussions today he was talking about how he supported microprojects, so I'm a little caught off guard. I'm happy to hear that you do support this magnitude of a project, Member. [DRAFT TRANSCRIPT ONLY]
J. Horgan: Certainly I support an existing facility of this magnitude, particularly when it was part of a ten-year plan that involved $500 million in public equity. [DRAFT TRANSCRIPT ONLY]
The minister has touched on one of the other issues that I want to talk about. We have an acting CEO, and I'm curious if the minister could advise me: what happened to the last CEO? Apparently, before arriving in town, he left town, and I'm wondering what the costs are to CPC to manage his departure, in terms of severance. [DRAFT TRANSCRIPT ONLY]
Hon. B. Lekstrom: The previous CEO resigned, and there was no severance. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I understand that the chairman of the board of CPC is a Mr. Lee Doney, who has had a career in government spanning several decades. I understand that he's been very busy with negotiations with paramedics. I understand that he's involved with Community Living and other board appointments, but I'm not certain that he has any experience whatsoever in electricity generation, which is the primary focus of Columbia Power Corporation. Could the minister advise me of Mr. Doney's qualifications to be the chair of the board? [DRAFT TRANSCRIPT ONLY]
[1740]
Hon. B. Lekstrom: Mr. Doney has served as chair for a number of years, contributed greatly to CPC. I think he has a proven track record with his longtime public service, as the member rightfully put forward. I think he has done a good job and continues to do a good job as the chair at CPC. I think he's taken that organization and done some very good work with that. [DRAFT TRANSCRIPT ONLY]
J. Horgan: I'm curious as to what that very good work might be. Mr. Doney took over the board in late 2005, just as the Brilliant expansion was coming to a conclusion. The next logical step — in fact, the only remaining step — for the Columbia Power Corporation was to proceed with the Waneta expansion, which Mr. Doney advised the public, via press release ten days ago, was not going to proceed in the near term. So I dispute the minister's assertion that Mr. Doney has had a stellar record as chair. [DRAFT TRANSCRIPT ONLY]
I regret that we've brought Mr. Jmaeff all the way here from Castlegar and that we have not yet concluded the questions I was hoping to ask. [DRAFT TRANSCRIPT ONLY]
So rather than end now, I will note the time and ask that we rise, report progress and ask leave to sit briefly again before the end of this session. [DRAFT TRANSCRIPT ONLY]
Motion approved.
The committee rose at 5:42 p.m.
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