Integrated Electricity Plan (IEP) 2005 Provincial IEP Committee May 29 th, 2006 Meeting Notes Version: June 22, 2006 CONTENTS

Transcription

1 CONTENTS Table of Contents MEETING OBJECTIVES...4 PROPOSED AGENDA...4 PRESENTATIONS DELIVERED AT THE MEETING (NO PAPER COPIES DISTRIBUTED)...4 AGENDA ITEM #1 WELCOME & INTRODUCTIONS...4 AGENDA ITEM #2 UPDATE...5 QUESTIONS & DISCUSSION...5 AGENDA ITEM #3 DEBRIEF AND FEEDBACK...9 QUESTIONS & DISCUSSION...9 ACTION ITEMS...13 Table of Figures Figure 1 LTAP Load Resource Capacity Balance...7 Figure 2 BC Hydro s LTAP and Contingency Plans...8 Meeting May 29, 2006 at Westin Grand in Vancouver Page 1

2 ATTENDEES (in alphabetical order by the name of the organization) Name Organization or Alternate? Brian McCloy BC Business Council Dr. John Calvert BC Citizens for Public Power Bev Van Ruyven BC Hydro Mary Hemmingsen BC Hydro Julius Pataky BC Transmission Corporation Ex-officio Katherine Muncaster Energy and Materials Research Group, Simon Fraser University (SFU) and BC Sustainable Energy Association (BC SEA) John Newcomb Greater Victoria Chamber of Commerce Dan Smith Hamatla Treaty Society David Austin Independent Power Producers Association of BC (IPPBC) Dan Potts Joint Industry Electricity Steering Committee (JIESC) Sharron Simpson Kelowna City Council and Central Okanagan Regional District Russell Leslie Nelson Hydro Mansell Griffin Nisga a Lisims Government Alternate Collier Azak Nisga a Lisims Government (Director of Lands & Resources) Fred Fortier North Thompson Indian Band Gwen Johannson Peace Williston Advisory Committee (PWAC) Dr. Nola Kate Seymoar (Kate) Sustainable Cities Foundation Jane McRae Sustainable Cities Foundation Alternate Meeting May 29, 2006 at Westin Grand in Vancouver Page 2

3 BC HYDRO PROJECT TEAM (in alphabetical order by first name) Name Organization & Department Anne Wilson BC Hydro, IEP Project Management Office Basil Stumborg BC Hydro, Stakeholder Engagement Brandee Clayton BC Hydro, IEP Project Management Office Brenda Goehring BC Hydro, IEP Project Management Office Heather Matthews BC Hydro, IEP Project Management Office Randy Reimann BC Hydro, IEP Project Management Office Role on the IEP Project Team Feedback Facilitator Facilitator & Decision Analyst for Provincial IEP Committee IEP Logistics Coordinator IEP Stakeholder Engagement Coordinator IEP Technical Coordinator Project Manager for 2005 IEP Meeting May 29, 2006 at Westin Grand in Vancouver Page 3

4 MEETING OBJECTIVES Integrated Electricity Plan (IEP) 2005 The objectives of the last Provincial IEP Committee (PIEPC) meeting are to: Update PIEPC members on the final IEP filing process, the Long Term Acquisition Plan and next steps in the regulatory process, Provide the Committee members with a formal opportunity to debrief on the PIEPC process, and to be recognized for their contributions and efforts. PROPOSED AGENDA 2:00 p.m. Introduction and welcome 2:15 p.m. Update The IEP The LTAP The regulatory process The planning cycle in context 3:00 p.m. Debrief and feedback on the PIEPC process 4:00 p.m. Break 4:10 p.m. Acknowledgements 5:00 p.m. Reception 6:30 p.m. Dinner PRESENTATIONS DELIVERED AT THE MEETING (No Paper Copies Distributed) The following presentations were delivered during the meeting but paper copies were not provided at the meeting. Electronic copies will be made available on the BC Hydro website at: Item IEP/LTAP Update Description Randy Reimann delivered a power point presentation that reviewed some of the changes in data since the last PIEPC meeting, a review of the various portfolios and strategies examined by PIEPC and how PIEPC feedback was considered in developing the LTAP AGENDA ITEM #1 WELCOME & INTRODUCTIONS Basil Stumborg formally welcomed everyone to the last meeting of the Provincial Integrated Electricity Plan (IEP) Committee and commented that the first part of the meeting was to report out on results while the second, and larger, part of the meeting was for BC Hydro receive feedback on the PIEPC process and to collect advice for similar processes that may proceed in the future. Meeting May 29, 2006 at Westin Grand in Vancouver Page 4

5 AGENDA ITEM #2 UPDATE Integrated Electricity Plan (IEP) 2005 Randy Reimann delivered a power point presentation to the Committee on the IEP and the LTAP. This presentation reviewed the key threads that led to the actions within the plan. Randy reviewed with the committee that the Load Forecast is not set numbers, but a range based on uncertainties and that the 2005 Load Forecast that was used to develop the LTAP. Questions & Discussion Load Forecast discrepancy between 2004 and Katherine asked why there was such a discrepancy between the 2004 and 2005 Load Forecast? Mary commented that the discrepancy falls from the impact of cumulative load growth. The 2004 forecast was based upon the 2003 observations and since then the economy has heated up significantly. Mary also commented that there was a significant jump in gas prices due to consumption pressures, increased prices, and from forecasters stating that there will not be enough gas. Gas Price Forecast. Brian stated that BC Hydro s high gas price forecast is the only realistic forecast. Mary commented that the high gas price forecast has been adjusted to reflect increases from various sources of information, i.e. the Department of Energy in the US, Cambridge Energy, and the Energy Research Association. Randy followed this comment by noting that the gas market is beginning to soften. Gas Price Forecast Accuracy. Mansell asked if BC Hydro has compared previous gas forecasts for their accuracy? Mary commented that yes, this has been reviewed and the gas price forecasts are fairly accurate in the short-term and then accuracy begins to fall off. Resource Requirements and Supply Plans. DSM and the three calls will fulfill some of the projected need. Brian asked if some of BC Hydro s thinking has been influenced by the fact that the 2006 bids came in higher than what was expected? Mary said that this fact raises the threshold for DSM programs and the inception of lead times on future projects. Bev followed stating that this makes DSM look much more attractive. Brian then asked how this was going to affect the capital cost estimates for Site C? Mary commented that sensitivities for Site C costs were built in at +/- 40%, and that this bandwidth covers what is currently being seeing in the increased economy. Sharron asked why increased costs are factored into what will happen? She felt that if BC Hydro is on the ground and looking at a project these costs should be factored in now. Mary stated that BC Hydro is meeting with IPP developers to understand the costs they are facing. BC Hydro is also meeting with other jurisdictions to talk about what they are experiencing. In addition, BC Hydro is looking at ways to structure subsequent calls e.g. fixed prices or index? Meeting May 29, 2006 at Westin Grand in Vancouver Page 5

6 Sharron stated that low cost as the primary driver will affect the resources selected. David suggested that the whole issue is more complicated. An example he gave is that BC Hydro has been advised not to have such a long evaluation period in its call for tender, as costs go up over time. However, BC Hydro has not taken this advice. Therefore bidders have to budget for contingency plans and include terms and conditions in their contracts with Hydro. This makes the resultant costs bid in look high. Brian asked if there was any thought given to tariffs where there is one flat price like in Ontario? David then asked why a price would be set when it might be possible to get it cheaper? A competitive bidding process is necessary to get the best price. Bev interceded that this is done in Ontario only for small projects. Brian mentioned that one flat price takes all of the risk out of the equation and also makes the process completely transparent. David said that risk can still be taken out and better prices are still possible. Bev stated that BC Hydro is hearing the need to make decisions on getting new supply and BC Hydro is listening and agrees. LTAP and the Load Resource Balance. John C. enquired if Alcan is factored in to the Load Resource Balance? David replied that Alcan never supplied BC Hydro with that much power anyways. Mary followed stating that the agreement between BC Hydro specifies that Alcan is to supply BC Hydro with 130 GWh per year. Alcan has the option of recalling this, but they must use it for their smelter or they have to supply the power back to BC Hydro. Fred asked when Revelstoke 5 and 6 are coming on, as people in his community were enquiring. Mary said that stating specifically when they will come on board is a challenge. The chart in the slide (shown below as Figure 1) shows when Revelstoke 5 and 6 are needed. However those start-up times are affected if the results from the calls are intermittent and/or there is less capacity. Randy followed stating that slide 15 (shown below as Figure 2) shows the LTAP plus two potential contingencies. If the load forecast is higher, Revelstoke and Mica could start-up earlier. This is depending upon the calls and the success of DSM programs. Meeting May 29, 2006 at Westin Grand in Vancouver Page 6

7 Figure 1 LTAP Load Resource Capacity Balance Integrated Electricity Plan (IEP) ,000 Dependable Capacity (MW) 16,000 15,000 14,000 13,000 12,000 11,000 Operating Planning 10,000 9,000 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017 Fiscal Year (year ending March 31) F2018 F2019 F2020 F2021 F2022 F2023 F2024 F Load Forecast Range after full DSM targets* Heritage Hydroelectric Existing Purchase Contracts Resource Smart Heritage Thermal F2006 Call F2007 Call F2009 Call Revelstoke Capacity Addition Mica or Revelstoke Capacity Addition Downstream Benefits 2005 Mid Load Forecast after full DSM targets* * including planning reserves Meeting May 29, 2006 at Westin Grand in Vancouver Page 7

8 Figure 2 BC Hydro s LTAP and Contingency Plans LTAP Contingency Plan 1 Contingency Plan 2 Change in Key Resource Planning Variables Load Forecast Uncertainty Mid High High DSM Deliverability Uncertainty All DSM EE/LD 2 EE 3, 4, 5 All DSM EE/LD 2 EE 3, 4, 5 Supply-Side Type Risk Supply-Side Location Risk Low Cost ROR As per ROR 1 Low Dependable Capacity As per ROR 20% Less DSM Low Dependable Capacity 50% of LM/VI Region Resources moved outside LM/VI Region BC Hydro s Planned Actions Revelstoke Unit 5In-Service Date F2011 F2011 F2011 Mica Unit 5 or Revelstoke Unit 6In-Service Date 2 F2018 F2013 F2013 (earliest date) 1 The LTAP consists of a large project that is presumed to be located in the Tumbler Ridge/Peace River region. The large project could be either a large hydro or coal fired plant. Alternatively, these facilities could be located in the Elk Valley or the Central Interior. BC Hydro plans to test all three locations in its NITS application. 2 Earliest in-service date needs to be coordinated with the ILM upgrade. Meeting May 29, 2006 at Westin Grand in Vancouver Page 8

9 Transmission Requirements. Sharron asked if there was a process where if A happens than B and C will automatically follow? Randy replied that BC Hydro will proceed with the plan outlined for the earliest in service date. BCTC knows what is in the IEP and what BC Hydro will require for transmission in the future. Mary added that BC Hydro is proposing to the regulator that Revelstoke be advanced to its earliest in service date, as well as proceeding with the two calls, and DSM programs. BCTC will design the infrastructure timing in accordance with all these. Bev followed stating that the outcomes of all of these have risks which may shift through planning IEP? Randy stated that the current thinking is to do an update on the acquisition portion of the IEP every second year. Brian asked if any gas projects had bid into the 2006 CFT and Randy stated no. Brian then asked of BC Hydro was obligated to at least buy the 2500 GWh and Randy stated no to this question as well. Brian enquired if Hydro was expecting the costs to come down in future calls? Mary felt that the costs would probably not come down. Some IPP s and industrials are looking to BC Hydro to structure the calls with longer delivery dates which might bring down the prices. Mary also noted that there was a quite a range between the bids themselves. John C asked if anyone knew what the total obligation was amongst all the current contracts with Hydro? Mary said that although she did not know that number off the top of her head she would get that information for him. Bev followed this comment by stating that there are already 58 EPA s which is 9000 GWh and this will grow as the next three calls are finished. Some EPA s are already on line and some still need to be delivered. Mary to send John C the amount that BC Hydro is obligated to under the various IPP contracts. Basil wrapped up the discussion by pointing out that the IEP team did a good job of bridging what PIEPC discussed and what ended up in the report, so he encouraged the members to take a close look at the IEP. AGENDA ITEM #3 DEBRIEF AND FEEDBACK Basil introduced Anne Wilson stating that Anne will be playing an increasing role in the Stakeholder Engagement of energy planning going forward. Anne addressed the committee expressing that BC Hydro started off this type of process in WUP and now the IEP, and BC Hydro is looking to potentially do this again. Therefore, Hydro would like to ask what advice the committee would give BC Hydro in undertaking similar processes in the future. Questions & Discussion The following are highlights of the questions that were asked and the points that were made during the open discussion. Meeting May 29, 2006 at Westin Grand in Vancouver Page 9

10 Sharron stated that the initial learning curve is very steep as there is no consistent knowledge around the table. Rather than starting from scratch every time BC Hydro should utilise some of the same people through various processes. This would ensure that there is a deeper understanding in similar processes. The more knowledgeable committee members could seed other processes with their knowledge. Anne asked how the committee members felt the process went with the wide range of people involved, i.e. interveners and others? Mansell stated that he found a benefit to not having a firm position upon entrance into the process. He felt that fresh perspectives were gained from having people with different backgrounds and knowledge. Mansell did feel that better planning around meeting dates could be improved as there were no set dates and the dates fluctuated a lot. Dan S. felt that he did not see PIEPC stopping, but continuing on in the future, as required, to potentially serve in a variety of areas. Dan S. believed that the committee served well as representatives from all over the province and a variety of backgrounds. The knowledge base built over the PIEPC process should be used in the future. Dan S. also stated that he would like to see more involvement with First Nations as his own involvement has been beneficial to prospective First Nation IPP s on Vancouver Island as well as around the province. John believed that awareness was built throughout the process as people with conflicting roles and view points benefited from exposure to each others opinions. Commonalities and conflicts of interest were highlighted. Fred thought that a multi-stakeholder process could be improved by defining the various stakeholders who should be present at the table. Implications of the options discussed throughout the process affect different areas. It is important that there is representation around the table from the various areas in order to increase understanding of what is lost when lands are flooded. Many people would not support building in their own backyard. Fred also emphasized that a separate, bi-lateral process should be set up to consult First Nations. Capacity with First Nations should also be addressed as BC Hydro has a lot of human capacity but the First Nations participants in such a process would not. The Province also has to be clear about the relationship it has with Crown Corporations. Brian felt that BC Hydro should offer a per diem for the amount of time invested. Anne asked if the PEIPC process required a reasonable amount of effort? Brian believed that more effort and thought would be put into the opinions and advice given if BC Hydro was not asking for it for free. Mansell supported Brian s point. David felt that if BC Hydro was going to assemble a group of people, BC Hydro should listen to what was said rather than trying to convince committee members that what BC Hydro was saying is correct. Anne asked if others felt this way? Mansell, Dan S. and John C all disagreed and believed that a lot of change was seen. Brian thought that the Campbell River meeting was a great ice breaker. Sharron agreed that meeting should take place outside of the Lower Mainland as it offers a good opportunity to see what is going on, and how other people are involved. Meeting May 29, 2006 at Westin Grand in Vancouver Page 10

11 John C. was frustrated that the issues for him are managed by the Provincial Government and not BC Hydro even though many things are closely related. John felt that the PIEPC was only dealing with one piece of the pie and limits were set upon what the committee members could offer suggestions on. John however is not sure how this issue can be addressed. Katherine expressed similar frustration over BCUC regulations. Anne asked if the committee members felt that this was a valuable process? Katherine said yes, however she still had concerns that she would like relayed to the BCUC. Susan felt that the biggest value for her was the respectful and constructive dialogue. She also agreed that people should be paid for their time in order to encourage attendance and expertise. She also saw a value of having a two to three year window for the committee, balanced against having fresh faces. Susan also agreed that the Campbell River meeting was a good idea. It is important to get out of Vancouver and visit sites to see what happens in the long term. Katherine was surprised that at the conclusion of the meetings there was not more of an effort made to come to some sort of consensus. She expected that there would be some effort beyond just boiling down the positions and finding common ground. Katherine expected the committee members to answer the question where would you be willing to compromise? and hence provide BC Hydro with one report that sums up PIEPC s position. Sharron agreed with Katherine s comments, and felt that the committee members should have been informed at the outset that they were ultimately looking at strategies rather than coming to consensus. David stated that the valuable part of the portfolio exercise was in looking at peoples relative priorities and values. However, given the accuracy of the numbers, it did not make sense to push beyond this to land on a particular portfolio. Because once a portfolio was chosen, then external factors would change. Brian felt that had the committee received the current numbers in advance, the discussion might have been different. John N. appreciated David s input on costs but pointed out that fundamentally it was a discussion of peoples values. Although dollars matter, values don t necessarily involve dollars. Mary stated that the process profoundly influenced how the planning group developed the IEP. The team struggled initially to bring all the information to the committee but as the process progressed, the team became more able to present the information and connect it for the committee. The outcome shows in the final product. Each person has their own idea on what the correct outcome was, and the IEP reflects that. John C. felt that it would be useful at the outset of future processes to give each member a chance to explain their own key issues and view points, thus facilitating a shared understanding of where everyone is coming from. Sharron stated that so much of what came to the table was historical and that having this information prior to the process would have been helpful. Sharron also stated that she developed an appreciation for the history as she went through the process. One idea may be to tap into the people sitting on the committee to provide the historical context rather than having BC Hydro provide the history. Brian wanted to bring up the point that there seemed to be a perception that cabinet turned down the report. He stated that it was impossible to turn down the report as there was something in there for everyone. Meeting May 29, 2006 at Westin Grand in Vancouver Page 11

12 Mary felt that one gap was having a regulatory perspective present at the table. Other jurisdictions have been able to get a regulatory person involved. The benefit of this is that it is difficult relating what took place within this forum to the regulator. Mansell appreciated having David on the committee, as well as Fred, as his insight into the Revelstoke and Site C project was invaluable. Mansell would have preferred if the PIEPC received a First Nations perspective on Site C. Brenda said that BC Hydro tried to get a representative and they recognise the need going forward. Brian felt that more external experts should be brought in to discuss certain topics. John N. clarified that PIEPC is here only because the regulator says that it needs to be here. David stated that the PIEPC committee can not be here just for that purpose. The committee needed to find a practical plan the will be accepted by BCUC and outside the room. However the PIEPC can not go to the final step of selecting a portfolio as the rules are constantly changing. This process needs to adjust its process to fit with other cycles. Julius suggested that when a process is created, such as the IEP, the product that BC Hydro files with the regulator is improved. If everyone in the room can agree on that then the process is worthwhile. Susan agreed that the committee can not be dismissed because it does not have decision making abilities. The dialogue that takes place is still valuable and should inform both BC Hydro and the Province going forward. Katherine would have like to have seen the report before it was publicised. She also felt that the two hour notice for the conference call was unacceptable. Several other committee members added their support to this statement. Dan S. stated that there are 53 projects and 37 IPP s. He would like to know who the proponents are as well as the types of projects. First Nations are very interested in being involved in energy production and should be involved right from the very beginning. First Nations currently get referrals from industry and government in their area. Those referrals require capacity building. David supported this view point. Mansell stated that it is not necessarily the case with all proponents. Brenda to send Mansell, Fred and Dan S. the listing of proponents. Fred felt that a bilateral process is needed between First Nations, the Province and BC Hydro. The obligations in dealing with BCUC must be clear right from the start. A lot of these issues can not be addressed at this table. Basil asked what the committee s feedback is on the people sitting on the committee. Are the individuals reporting back their own views or that of their association? Dan S. felt that he would like to think that the committee represented the citizens of BC. Dan S. stated that he can only give an idea of what to look for in dealing with First Nations, particularly the cultural connection to land and resources. He felt that an expert in First Nations issues should be brought in for future meetings. Mary stated that both her, and Bev tried to reflect other issues outside of BC Hydro, and so did not necessarily bring the same view to the table. BC Hydro endorsed this approach and the preference expressed for the strategies was their own. Meeting May 29, 2006 at Westin Grand in Vancouver Page 12

13 John C. felt that the people around the table came with different expectations. It is messy and he could not see how it could be any different. Basil and Anne concluded the discussion by thanking the committee members for their time and clarifying that the feedback given from the discussion as well as the feedback given on the forms will help to develop future processes. Randy thanked each member personally and distributed the thank you gifts. ACTION ITEMS What needs to be done? Who will do it? By when? Send Mansell, Fred and Dan S. the listing of IPP proponents. Brenda Before the end of June Send John C the amount that BC Hydro is obligated to under the various IPP contracts. Mary Before the end of June Meeting May 29, 2006 at Westin Grand in Vancouver Page 13