B.C. Hydro misled regulator: report

US Summer Electricity Outlook 2022 projects rising renewable energy generation as utility-scale solar and wind capacity additions surge, while coal declines and natural gas shifts amid higher fuel prices and regional supply constraints.

Key Points

An EIA forecast of summer 2022 power: more solar and wind, less coal, and shifting gas use amid higher fuel prices.

✅ Solar +10 million MWh; wind +8 million MWh vs last summer

✅ Coal generation -20 million MWh amid supply constraints, retirements

✅ Gas prices near $9/MMBtu; slight national gen decline

In our Summer Electricity Outlook, a supplement to our May 2022 Short-Term Energy Outlook, we expect the largest increases in U.S. electric power sector generation this summer will come from renewable energy sources such as wind and solar generation. These increases are the result of new capacity additions. We forecast utility-scale solar generation between June and August 2022 will grow by 10 million megawatthours (MWh) compared with the same period last summer, and wind generation will grow by 8 million MWh. Forecast generation from coal and natural gas declines by 26 million MWh this summer, although natural gas generation could increase in some electricity markets where coal supplies are constrained.

For recent context, overall U.S. power generation in January rose 9.3% year over year, the EIA reports.

Wind and solar power electric-generating capacity has been growing steadily in recent years. By the start of June, we estimate the U.S. electric power sector will have 65 gigawatts (GW) of utility-scale solar-generating capacity, a 31% increase in solar capacity since June 2021. Almost one-third of this new solar capacity will be built in the Texas electricity market. The electric power sector will also have an estimated 138 GW of wind capacity online this June, which is a 12% increase from last June.

Along with growth in renewables capacity, we expect that an additional 6 GW of new natural gas combined-cycle generating capacity will come online by June 2022, an increase of 2% from last summer. Despite this increase in capacity, we expect natural gas-fired electricity generation at the national level will be slightly (1.3%) lower than last summer.

We forecast the price of natural gas delivered to electric generators will average nearly $9 per million British thermal units between June and August 2022, which would be more than double the average price last summer. The higher expected natural gas prices and growth in renewable generation will likely lead to less natural gas-fired generation in some regions of the country.

In contrast to renewables and natural gas, the electricity industry has been steadily retiring coal-fired power plants over the past decade. Between June 2021 and June 2022, the electric power sector will have retired 6 GW (2%) of U.S. coal-fired generating capacity.

In previous years, higher natural gas prices would have resulted in more coal-fired electricity generation across the fleet. However, coal-fired power plants have been limited in their ability to replenish their historically low inventories in recent months as a result of mine closures, rail capacity constraints, and labor market tightness. These coal supply constraints, along with continued retirement of generating capacity, contribute to our forecast that U.S. coal-fired generation will decline by 20 million MWh (7%) this summer. In some regions of the country, these coal supply constraints may lead to increased natural gas-fired electricity generation despite higher natural gas prices.
 

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Ontario Comprehensive Electricity Plan delivers Global Adjustment reductions for industrial and commercial non-RPP customers, lowering electricity rates, shifting renewable energy costs, and enhancing competitiveness across Ontario businesses in 2022, with additional 4 percent savings.

Key Points

Ontario's plan lowers Global Adjustment by shifting renewable costs, cutting industrial and commercial bills 15-17%.

✅ Shifts above-market non-hydro renewable costs to the Province

✅ Reduces GA for industrial and commercial non-RPP customers

✅ Additional 4% savings on 2022 bills after GA deferral

As of January 1, 2022, industrial and commercial electricity customers will benefit from the full savings introduced through the Ontario government’s Comprehensive Electricity Plan, which supports stable electricity pricing for industrial and commercial companies, announced in Budget 2020, and first implemented in January 2021. This year customers could see an additional four percent savings compared to their bills last year, bringing the full savings from the Comprehensive Electricity Plan to between 15 and 17 per cent, making Ontario a more competitive place to do business.

“Our Comprehensive Electricity Plan has helped reverse the trend of skyrocketing electricity prices that drove jobs out of Ontario,” said Todd Smith, Minister of Energy. “Over 50,000 customers are benefiting from our government’s plan which has reduced electricity rates on clean and reliable power, allowing them to focus on reinvesting in their operations and creating jobs here at home.”

Starting on January 1, 2021, the Comprehensive Electricity Plan reduced overall Global Adjustment (GA) costs for industrial and commercial customers who do not participate in the Regulated Price Plan (RPP) by shifting the forecast above-market costs of non-hydro renewable energy, such as wind, solar and bioenergy, from the rate base to the Province, alongside energy-efficiency programs that complement demand reduction efforts.

“Since taking office, our government has listened to job creators and worked to lower the costs of doing business in the province. Through these significant reductions in electricity prices through the Comprehensive Electricity Plan, customers all across Ontario will benefit from significant savings in their business operations in 2022,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “By continuing to reduce electricity costs, lowering taxes, and cutting red tape our government has reduced the cost of doing business in Ontario by nearly $7 billion annually to ensure that we remain competitive, innovative and poised for economic recovery.”

As part of its COVID response, including electricity relief for families and small businesses, Ontario had deferred a portion of GA between April and June 2020 for industrial and non-RPP commercial customers, with more than 50,000 customers benefiting. Those same businesses paid back these deferred GA costs over 12 months, between January 2021 and December 2021, while the province prepared to extend disconnect moratoriums for residential customers.

During the pandemic, residential electricity use rose even as overall consumption dropped, underscoring shifts in load patterns.

Now that the GA deferral repayment period is over, industrial and non-RPP commercial customers will benefit from the full cost reductions provided to them by the Comprehensive Electricity Plan, alongside temporary off-peak rate relief that supported families and small businesses. This means that, beginning January 1, 2022, these businesses could see an additional four per cent savings on their bills compared to 2021, as new ultra-low overnight pricing options emerge depending on their location and consumption.

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US Electricity Generation H1 2018 saw wind and solar gains but hydro declines, as natural gas led the grid mix and coal fell; renewables' share, GWh, emissions, and capacity additions shaped the power sector.

Key Points

It is the H1 2018 US power mix, where natural gas led, coal declined, and wind and solar grew while hydro fell.

✅ Natural gas reached 32% of generation, highest share

✅ Coal fell; renewables roughly tied nuclear at ~20%

✅ Wind and solar up; hydro output down vs 2017

To complement our revival of US electricity capacity reports, here’s a revival of our reports on US electricity generation.

As with the fresh new capacity report, things are not looking too bright when it comes to electricity generation. There’s still a lot of grey — in the bar charts below, in the skies near fossil fuel power plants, and in the human and planetary outlook based on how slowly we are cutting fossil fuel electricity generation.

As you can see in the charts above, wind and solar energy generation increased notably from the first half of 2017 to the first half of 2018, and the EIA expected larger summer solar and wind generation in subsequent months, reinforcing that momentum.

A large positive when it comes to the environment and human health is that coal generation dropped a great deal year over year — by even more than renewables increased, though the EIA later noted an increase in coal-fired generation in a subsequent year, complicating the trend. However, on the down side, natural gas soared as it became the #1 source of electricity generation in the United States (32% of US electricity). Furthermore, coal was still solidly in the #2 position (27% of US electricity). Renewables and nuclear were essentially in a tie at 19.8% of generation, with renewables just a tad above nuclear.

Actually, combined with an increase in nuclear power generation, natural gas electricity production increased so much that the renewable energy share of electricity generation actually dropped in the first half of 2018 versus the first half of 2017, even amid declining electricity use in some periods. It was 19.8% this year and 20% last year.

Again, solar and wind saw a significant growth in its market share, from 9% to 9.9%, but hydro brought the whole category down due to a decrease from 9% to 8%.

The visuals above are probably the best way to examine it all. The H1 2018 chart was still dominated by fossil fuels, which together accounted for approximately 60% of electricity generation, even though by 2021 non-fossil sources supplied about 40% of U.S. electricity, highlighting the longer-term shift. In H1 2017, the figure was 59.7%. Furthermore, if you switch to the “Change H1 2018 vs H1 2017 (GWh)” chart, you can watch a giant grey bar representing natural gas take over the top of the chart. It almost looks like it’s part of the border of the chart. The biggest glimmer of positivity in that chart is seeing the decline in coal at the bottom.

What will the second half of the year bring? Well, the gigantic US electricity generation market shifts slowly, even as monthly figures can swing, as January generation jumped 9.3% year over year according to the EIA, reminding us about volatility. There is so much base capacity, and power plants last so long, that it takes a special kind of magic to create a rapid transition to renewable energy. As you know from reading this quarter’s US renewable energy capacity report, only 43% of new US power capacity in the first half of the year was from renewables. The majority of it was from natural gas. Along with other portions of the calculation, that means that electricity generation from natural gas is likely to increase more than electricity generation from renewables.

Jump into the numbers below and let us know if you have any more thoughts.

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Alberta Wind Energy Policy Changes highlight TransAlta's Riplinger cancellation amid UCP buffer zones for pristine viewscapes, regulatory uncertainty, and market redesign debates, reshaping Alberta's renewables investment climate and clean energy diversification plans.

Key Points

UCP rules and market shifts reshaping wind siting, permits, and finance, increasing uncertainty and delays for new projects.

✅ 35-km buffer near pristine viewscapes limits wind siting

✅ TransAlta cancels 300 MW Riplinger project

✅ Market redesign uncertainty chills renewables investment

The winds of change are blowing through Alberta's energy landscape today, and they're not necessarily carrying good news for renewable energy development. TransAlta, a major Canadian energy company, recently announced the cancellation of a significant wind farm project, citing a confluence of factors that create uncertainty for the future of wind power in the province. This decision throws a spotlight on the ongoing debate between responsible development and fostering a clean energy future in Alberta.

The scrapped project, the Riplinger wind farm near Cardston, Alberta, was envisioned as a 300-megawatt facility capable of providing clean electricity to the province. However, TransAlta pointed to recent regulatory changes implemented by the United Conservative Party (UCP) government, following the end of the renewable energy moratorium in Alberta, as a key reason for the project's demise. These changes include the establishment of a 35-kilometer buffer zone around designated "pristine viewscapes," which significantly restricts potential wind farm locations.

John Kousinioris, CEO of TransAlta, expressed frustration with the lack of clarity surrounding the future of renewable energy policy in Alberta. He highlighted this, along with the aforementioned rule changes, as major factors in the project's cancellation. TransAlta has also placed three other power projects on hold, indicating a broader concern about the current investment climate for renewable energy in the province.

The news has been met with mixed reactions. While some residents living near the proposed wind farm site celebrate the decision due to concerns about potential impacts on tourism and the environment, others worry about the implications for Alberta's clean energy ambitions, including renewable energy job growth in the province. The province, a major energy producer in Canada, has traditionally relied heavily on fossil fuels, and this decision might be seen as a setback for its goals of diversifying its energy mix.

The Alberta government defends its changes to renewable energy policy, arguing that they are necessary to ensure responsible development and protect sensitive ecological areas. However, the TransAlta decision raises questions about the potential unintended consequences of these changes. Critics argue that the restrictions might discourage investment in renewable energy and the province's ability to sell clean power to wider markets altogether, hindering Alberta's progress towards a more sustainable future.

Adding to the uncertainty is the ongoing process of redesigning Alberta's energy market. The aim is to incorporate more renewable energy sources, including solar energy expansion across the grid, but the details of this redesign remain unclear. This lack of transparency makes it difficult for companies like TransAlta to make sound investment decisions, further dampening enthusiasm for renewable energy projects.

The future of wind energy development in Alberta remains to be seen. TransAlta's decision to scrap the Riplinger project is a significant development, and it will be interesting to observe how other companies respond to the changing regulatory landscape, as a Warren Buffett-linked developer pursues a $200 million wind project in Alberta. Striking a balance between responsible development, protecting the environment, and fostering a clean energy future will be a crucial challenge for Alberta moving forward.

This situation highlights the complex considerations involved in transitioning to a renewable energy future, where court rulings on wind projects can influence policy and investment decisions. While environmental concerns are paramount, ensuring a stable and predictable investment climate is equally important. Open communication and collaboration between industry, government, and stakeholders will be key to navigating these challenges and ensuring Alberta can harness the power of wind energy for a sustainable future.

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BC Hydro Customer Crisis Fund Surplus highlights unused grants, pilot program imbalance, and calls to reduce fees or expand eligibility. Ratepayers, regulators, and social agencies urge awareness, rebates, and aid for overdue electricity bills.

Key Points

A funding carryover from BC Hydro's crisis grants, sparking debate over fee reductions or more aid eligibility.

✅ $2.9M surplus from 25-cent monthly customer fee

✅ Only 2,250 grants issued; awareness and eligibility questioned

✅ Regulator may refund balance or adjust program design

BC Hydro is sitting on a surplus of about $2.9 million in its customer crisis fund, even as BC Hydro rates rise 3% across the province, leading to calls for the utility to reduce its take from the average customer or provide more money to those in need.

B.C. Liberal Energy Critic Greg Kyllo said if the imbalance continues in the year-old pilot program, amid a provincial rate freeze announced by the province, it’s time to cut the monthly 25 cent fee in half.

"If the grant requirement or the need in the province is going to remain where it is, they should look at rolling back the contribution level in the fund," he told CTV News Vancouver from Salmon Arm.

But social agencies who were part of the consultation around the fund in the beginning said it’s more likely that people in need don’t know about the fund and more time is necessary to get the word out.

"If they collect the money, then the program’s got to change to make sure more people are able to be helped," said Gudrun Langolf of the Council of Senior Citizens Organizations of BC.

The customer crisis fund was started in spring 2018 to give people short-term relief when they can’t pay their electricity bills, especially as a $2 monthly hike pressures household budgets. Customers can apply to get a grant of up to $500 to keep the lights on, and up to $600 if electricity heats their homes.

The public utility took in about 25 cents per customer per month which added up to a revenue of $4.5 million in the year since the program started, BC Hydro confirmed to CTV News.

But the agency only gave out 2,250 grants totalling $850,000.

Administration costs added up around $750,000 – leaving the $2.9 million remaining.

The news will come as a welcome relief to those who suddenly struggle to pay their hydro bills, particularly as Alberta ratepayers are on the hook under a utility deferral program elsewhere in Canada.

Some people who come into Disability Alliance B.C. are often anxious and emotional when they’re suddenly unable to pay their bills, said Shar Saremi, an advocate there.

"I’ve had people crying. I’ve had people who have experienced a loss in the family," she said. "A lot of the time people are stressed out, anxious, really upset. They are looking for assistance, and they aren’t sure what is available for them."

She said people are only eligible if their bills are under $1,000, which could be cutting out the people who are most in need. And because the program is in its first year, it could be undersubscribed, she said.

"A lot of people don’t know about the program, don’t know how to apply, or what kind of assistance is out there," Saremi said.

The fund was established thanks to an order from the B.C. Utilities Commission, the utilities regulator in the province.

The pilot program is going to be examined by the regulator at the end of its first year.

"Any remaining balance in the account at the end of the pilot would be returned to residential ratepayers," says a BCUC fact sheet, as BC Hydro rates are set to rise 3.75% over two years. The decision on exactly what to do with the money hasn’t yet been made.

In Manitoba, a similar program is by donation, and in Newfoundland and Labrador a lump-sum credit was offered to bill payers in a separate initiative. That program raised about $200,000 from customers and $60,000 in other income. It spent $199,000 on grants to applicants, but lost about $20,000 a year.

In Ontario, private utilities are expected to raise 0.12 per cent of their revenue, and Hydro One reconnections have highlighted the stakes for nonpayment there. Across the province, those utilities gave out about $7.3 million in grants. Any unused funds in one year are rolled over to the following year.

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Nova Scotia Cap-and-Trade Program joins Western Climate Initiative to leverage emissions trading IT systems, track allowances, and manage compliance, while setting in-province caps, carbon pricing signals, and third-party verified reporting for industrial and fuel suppliers.

Key Points

A provincial emissions trading system using WCI services to cap GHGs, track allowances, and enforce verified compliance.

✅ Uses WCI IT system to manage allowances and registry

✅ Initial trading limited to in-province participants

✅ Third-party verification and annual reporting deadlines

Nova Scotia is yet to set targets for its new cap and trade regime to reduce greenhouse gases, but the province announced Monday that it has joined the Western Climate Initiative Inc. -- a non-profit corporation formed to provide administrative and technical services to states and provinces with emissions trading programs.

Environment Minister Iain Rankin said joining the initiative would allow the province to use its IT system to manage and track its new cap and trade program.

Rankin said the province can join without trading greenhouse gas emission allowances with other jurisdictions -- California, Quebec, and Ontario are currently linked through the program, with Hydro-Québec's U.S. sales highlighting cross-border dynamics. Nova Scotia currently has no plans to trade outside the province as it works on emissions caps Rankin said will be ready sometime in June.

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Nova Scotia is yet to set targets for its new cap and trade regime to reduce greenhouse gases, but the province announced Monday that it has joined the Western Climate Initiative Inc. -- a non-profit corporation formed to provide administrative and technical services to states and provinces with emissions trading programs.

Environment Minister Iain Rankin said joining the initiative would allow the province to use its IT system to manage and track its new cap and trade program.

Rankin said the province can join without trading greenhouse gas emission allowances with other jurisdictions -- California, Quebec, and Ontario are currently linked through the program. Nova Scotia currently has no plans to trade outside the province as it works on emissions caps Rankin said will be ready sometime in June.

"By keeping our system internal it ensures that our greenhouse gas reductions are happening within our province," said Rankin. "But we do have that opportunity (to join) and if there are new entrants or we need more access to credits then that may shift our strategy."

The use of the system will cost Nova Scotia about US$314,000 for 2018-19, with an annual cost in subsequent years of about US$228,000 or more, if the province requests modifications.

"If we were to do something like that internally we would have to build a full database and hire more people, so this was an obvious choice for us," said Rankin.

Nova Scotia has already met the national reduction target of 30 per cent below 2005 levels and says it's on track to have 40 per cent of electricity generation from renewables by 2020, underscoring how cleaning up Canada's electricity supports climate pledges.

Stephen Thomas, energy campaign coordinator for the Ecology Action Centre, called the province's move an "important small step," stressing the importance of using the same administrative rules as the other jurisdictions involved.

But Thomas said Nova Scotia should go further and trade emissions with California, Quebec, and Ontario, and also put a price on carbon by auctioning credits as they do.

Thomas said Nova Scotia's system stands to be volatile because of the smaller number of participants -- about 20 including Nova Scotia Power, Northern Pulp, Lafarge, and large oil and gasoline companies such as ExxonMobil, Imperial and Irving.

"It's very likely to favour Nova Scotia Power as the largest single emitter with the most credits to sell here, and that would change if we had a linked system, at a time when Canada will need more electricity to hit net-zero according to the IEA," Thomas said.

He said it's important to have a linked system and a regional approach in Atlantic Canada, which has more emissions per person and more emissions per GDP than places like Ontario, Quebec and California, and where policies like Newfoundland's rate reduction plan can influence electricity strategy.

"Reducing emissions, because we are so emissions-intensive here, is a little bit cheaper," said Thomas. "So it's possible that Ontario, Quebec and California could pay Nova Scotia to reduce its emissions."

Under its program, Nova Scotia requires industrial facilities generating 50,000 tonnes or more of greenhouse gas emissions per year to report emissions.

Regulations also cover petroleum product suppliers that import or produce 200 litres of fuel or more per year for consumption and natural gas distributors whose products produce at least 10,000 tonnes of greenhouse gas emissions a year.

Companies were to have reported to the Environment Department by May 1 but Rankin said the deadline has been pushed back to June 1, a deadline that was to be followed in subsequent years in any event. Reports must be verified by a third party by Sept. 1 every year.

The Liberal government passed enabling legislation for cap and trade last fall.

As for the upcoming emissions caps, Rankin isn't tipping the province's hand yet, even as B.C.'s 2050 targets face a shortfall in some forecasts.

"Those caps will recognize the investments that have already been made and therefore will be the most cost-effective program that we can put together to meet the federal requirement," he said.

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