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BC Hydro’s Bioenergy Phase 2 Call

From my new colleague, Jenny Kirkpatrick:

On May 31, 2010, BC Hydro issued a Request for Proposals in relation to the long term supply of clean or renewable biomass energy generated by new projects in British Columbia (the “Bioenergy Phase 2 Call”).  Those intending to submit a Proposal must first register with BC Hydro and the registration deadline is fast approaching – July 15, 2010 at 4pm.

With the recent announcement of the Clean Energy Act coming into force, it is worth noting that there is a direct effect on the Bioenergy Phase 2 Call insofar as the Utilities Commission Act (“UCA”) is concerned. It is anticipated that BC Hydro will post an Addendum and/or Notice(s) to the RFP website to address modifications to the RFP process required to accommodate all impacts of the Clean Energy Act, including exemptions from certain procedural requirements to which energy supply contracts in British Columbia are normally subject.

Specifically, section 7(1)(e) of the Clean Energy Act exempts, “a bio-energy phase 2 call to acquire up to 1,000 gigawatt hours per year of electricity” from sections 45 to 47 and 71 of the UCA. Those provisions essentially relate to the British Columbia Utilities Commission’s (“BCUC”) approval process for public utility plants or systems, or Section 71 Hearings (as they are known).  Pursuant to section 71 of the UCA, all energy supply contracts are subject to the scrutiny of the BCUC, which determines whether the subject energy supply contract is in the public interest. By being exempt from BCUC’s regulatory process, those intending to submit a proposal in response to the Bioenergy Phase 2 Call will not be burdened with having to file an energy supply contract, in this case the electricity purchase agreement, with the BCUC, nor required to participate in a public hearing convened by the BCUC. In addition, the Bioenergy Phase 2 Call is exempt from the requirement to obtain a “certificate of public convenience and necessity” prior to the construction, operation or extension of a public utility plant or system, as provided for in s. 45 of the UCA. Lastly, the procedural requirements set out in s. 46 and the provisions relating to cease work orders set out in s. 47 of the UCA, do not apply to the Bioenergy Phase 2 Call. As a result, proponents will not have to incur the (often significant) costs associated with meeting these procedural requirements.  Regulatory barriers aside, all of the proponents will have to comply with the RFP’s procedural requirements.

Exempting the Bioenergy Phase 2 Call from sections 45 to 47 and 71 of the UCA will likely result in the development of clean energy projects in a more expeditious manner, which in turn will help the B.C. Government meet its objectives as set out in the Clean Energy Act.