Electricity Trade

Trade in electricity is important to BC because of the revenues it generates for the government. BC is able to export electricity through its enormous hydro generating capacity and its exceptional storage facilities in its dams. BC Hydro buys power from other jurisdictions—like Alberta and the Northwest US states—when costs there are low, and then stores the power as water in its dams. Later, it generates and exports electricity when prices are higher in other jurisdictions. These trading activities are coordinated through the BC Power Exchange (Powerex), a subsidiary of BC Hydro.

In the past, while new dams were being built, BC exported only surplus electricity. But this is no longer the case. In 2006-07, BC Hydro reports purchasing 33,815 Gwh of electricity for trade, and exporting 33,372 Gwh. From these transactions (and the trade of gas), BC Hydro realized about $326 million.

The BC Citizens Campaign for Public Power recognizes the significance of electricity trade for BC, but we’re critical of the ways that the imperatives of trade have been driving electricity privatization and deregulation in our province. The BC government eagerly complied with the imperialistic directives of the US-based Federal Energy Regulatory Commission (FERC), which were designed to create an integrated, competitive, and privatized North American electricity market.

The major initiative in this direction has been the separation of BC Hydro’s transmission system from its generation system through the creation of the BC Transmission Corporation (BCTC). This was done to allow private, and often foreign-based energy providers the ability to sell their power over BC Hydro transmission lines. [NOTE: after the numerous operational and financial failures associated with separating BCTC and BC Hydro were repeated reflected in the media, the two corporations were reintegrated, once again, in July, 2010.]  Many US states opposed FERC’s efforts to dismantle integrated utilities, but BC was one of the first jurisdictions to accept FERC’s directives. Now, decisions about transmission access, pricing, reliability, and security, as well as plans for future expansion of the system, all come under US jurisdiction.

In the future, all new private power producers in BC will have the option to sell their power to BC Hydro or to the US. This will result in domestic consumers competing with American consumers for power produced in Canada; and the impact will certainly be reflected in skyrocketing market prices. The option to sell either to BC Hydro or export power to the US is a major incentive for private producers to purchase water licenses to generate power in BC.

New investments in cross-border transmission lines could turn out to be very expensive for BC, particularly in view of the proposed expansion of private generation and the relatively small proportion of electricity that can presently be exported through existing transmission lines. Since the transmission lines are still in the public sector, the public will likely be paying for the future expansion of the system for the private sector and the export markets.

The BC Citizens Campaign for Public Power maintains that BC should not be redesigning its system to support private power and US designs for an integrated North American electricity system. NAFTA, in fact, does not require that trading partners have identical systems in order to trade, yet FERC has required this change. BC should not surrender any control over its transmission system to US regional transmission organizations.

Further reading:

• Marjorie Griffin Cohen, "Why Canada Needs a National Energy Plan: US is Now Determined to Control Canada’s Electric Power," The CCPA Monitor (Feb. 2006).
• Marjorie Griffin Cohen. "Gutting A Powerhouse: BC Hydro and the New Energy Plan." (CCPA, April 2003)
• Marjorie Griffin Cohen, "High Tension: BC Hydro’s Deep Integration with the US Through RTO West." (CCPA, 2003).