BC refutes Metro Vancouver incinerator business case

May 2, 2014

BC Hydro has responded to Metro Vancouver’s newly updated business case for its garbage burning plan by criticizing Metro Vancouver for its assumption that BC Hydro will pay above market rates for electricity produced in the new facility.

The market rate for electricity in BC is about $24/MWh, but according to the updated business case, Metro Vancouver has assumed that BC Hydro will pay four times that amount ($100/MWh) for electricity generated from incineration.

In the April 30, 2014 letter from BC Hydro, addressed to Metro Vancouver CAO Carol Mason, BC Hydro offers stern clarifications in response to the new business plan:

"The new WTEF was not part of the IRP’s [BC Hydro’s 30-year Integrated Resource Plan] base resource plan for securing future sources of electricity."

"The new WTEF does not qualify for the Standing Offer Program…the energy prices that have been quoted by Metro Vancouver are not necessarily for comparable product under comparable supply/demand conditions"

"At this point in time, BC Hydro has made no commitment to purchase energy from a new WTEF, nor has a commitment been made regarding a price for that energy."

"We applaud BC Hydro for stepping in and doing the right thing to protect the ratepayers of BC from this ill-advised project", said Fraser Valley Regional District (FVRD) Vice-Chair and Abbotsford City Councilor Patricia Ross. The FVRD notes that the swift communication from BC Hydro in response to the updated Business Case which was released last week on April 24, 2014, is an encouraging sign that the Province is watching closely, and does not want citizens across BC to be on the hook for subsidizing dirty power.

FVRD Board Chair and Chilliwack Mayor Sharon Gaetz cautions, "This should serve as a red flag for the citizens of the Lower Mainland. Not only has Metro Vancouver clearly overestimated the dollar value that it can secure from BC Hydro to bolster its flawed business case, but they have also routinely played down the health implications associated with burning garbage." Chair Gaetz adds, "Thank you to Mayor Richard Stewart and his council for asking Metro for a business plan. Through this business plan we have learned that the price tag for this behemoth has quietly risen by 13%. This should infuriate taxpayers, and to add insult to injury, it seems that Metro Vancouver has not even done the most elementary business plan."

Metro Vancouver previously noted that unless they can secure this dramatically higher rate, the business plan for their incinerator is not financially viable.

The letter from BC Hydro was tabled this morning at a Metro Vancouver Board meeting.