Why B.C. should reopen clean energy opportunities for Indigenous communities
Guest blog by Andy Hira, Professor of Political Science, Simon Fraser University.
A little more than a year ago, the British Columbia government launched an inquiry into the regulation of Indigenous energy utilities and ordered the British Columbia Utilities Commission (BCUC) to provide recommendations on how Indigenous utilities should be regulated. The BCUC is set to release its final report on April 30.
The media has provided little coverage of the inquiry, despite its importance. The inquiry was precipitated by a case brought against the BCUC by the Beecher Bay First Nation in June 2016.
B.C.’s electricity system is run as a provincial monopoly by B.C. Hydro, with the exception of a few municipal-level utilities. Beecher Bay wanted to build and run an electrical utility within the reserve. BCUC denied the request.
That decision effectively denied Indigenous groups the ability to run their own utilities, and profit from the environmental and economic benefits that come with it. Many of the remote Indigenous communities in British Columbia rely on expensive and dirty diesel generators, even though they may have the potential to tap into renewable energy.
Despite the court decision, the BCUC’s draft report recommends new regulations be developed to regulate Indigenous utilities separately. My new research group, the Clean Energy Research Group (CERG) at Simon Fraser University, decided to analyze the problem.
Limits on future options?
In line with long-standing land disputes, most First Nations in B.C. dispute the right of the BCUC to regulate their utilities, as reflected in their depositions. Meanwhile, B.C. Hydro is pushing for the continuation a single overarching framework, suggesting that Indigenous utilities could be self-regulating when they operate on reserves of current treaty settlement lands and provide similar customer protections.
The Site C Dam is an under-construction run-of-the-river hydroelectric dam on the Peace River near Fort St. John in northeastern B.C. (B.C. Hydro)
BCUC’s draft and interim reports indicates its intention to follow this line. It would like to continue to have regulatory responsibility for all utilities in the province, citing the need for reliability, reasonable prices and a customer dispute mechanism.
It would still permit Indigenous utilities to operate, but only within their own reserve lands, an exception that currently exists only for municipalities. Such a decision would be short-sighted.
Engine of economic development
This issue reflects the wider marginalization of First Nations from Canadian society. Continued endemic poverty in many communities point to what many say is a further reinforcement of hollow promises as represented by the current efforts at reconciliation by the Canadian government.
Recently, the B.C. legislature adopted United Nations Declaration on the Rights of Indigenous Peoples on Nov. 28, 2019 without a clear plan or guidelines on what it means in practice. The Wet’suwet’en hereditary chiefs’ opposition to the proposed Coastal GasLink natural gas pipeline highlights an important nexus of energy and Indigenous issues.
Access to energy is one of the fundamental factors to quality of life, as recognized in the U.N.’s Sustainable Development Goals. In fact, things were looking up in B.C. in the early 2010s when B.C. Hydro announced its Standing Offer Program (SOP), which allowed for small renewable clean energy projects to be developed across the province.
The Hupucasath First Nation built a 6.5-megawatt run-of-river hydro project that produces enough electricity for the 6,000 homes in Port Alberni, B.C. (Green Energy Futures/flickr), CC BY-NC-SA
Energy innovators, such as Judith Sayers, the former Chief of the Hupacasath First Nation, readied clean energy projects that would sell excess electricity back to the province. First Nations rushed to build new projects, seeing the economic development opportunities that lined up with their environmental values. My research group is working with the Kanaka Bar band (T’eqt’‘aqtn’mux) to document the many economic and social benefits coming from their hydro project, built under the leadership of Chief Patrick Michell.
All of this was brought to a grinding halt by the province’s decision to build the Site C mega dam project in 2014. Site C is projected to provide 5,000 gigawatts per year with a current projected cost of $10.7 billion. This led B.C. Hydro to halt the SOP, stating that adding Site C means other sources would no longer be needed, and leaving a large list of potential First Nations’ projects unfinished.
Indigenous energy projects will be needed
The SOP opened up desperately needed avenues of economic development to First Nations in B.C., and CERG’s analysis concludes the BCUC interim regulations will not revive them.
The proposed regulations limit Indigenous utilities to selling electricity only on their own reserves. The inability to sell back to the main grid cuts off all external sources of revenues and sources of investment needed to run the utilities. It continues to marginalize First Nations, while offering some autonomy.
The crucial point in CERG’s analysis, by its team of engineers, is that B.C.’s electricity demands can in no way be met by Site C alone. The projected demand, including the electrification of B.C.’s natural gas fields and the switch to electric cars to help meet the province’s 2030 goal to reduce its greenhouse gas emissions by 40 per cent, show that additional supply will be needed.
The conclusion is clear: B.C. and Canada need new clean energy sources, and Indigenous providers provide the grounds for a win-win situation. By allowing Indigenous utilities to compete, we create both clean energy and Indigenous economic development opportunities.
Although this article makes several important points it is a bit misleading. Currently Indigenous communities can run clean energy utilities. And several do. They can also create new utilities. The problem is those utilities are limited in what they do. For example, they can engage in generation but are limited in what they can do with transmission or distribution. In BCH rate Zone 1 they are limited in size (but not in Zone 2).
It also possible to set-up utilities that operate off-reserve but with limited scope.
As the article correctly points out Indigenous Communities should have the right to own and operate utilities that are not subject to the current restrictions.
But we should be encouraging Indigenous Communities to set up utilities (or take ownership in utilities like SolShare Energy) under the current rules as well as working to change the rules.
It is also important to do the math. For many First Nations communities they would be better off economically operating or jointly owning a utility under the current rules rather than the proposed changes.
For example in Zone 2 communities it would be more profitable to operate a generation facility under the current rules than own distribution infrastructure which BCH currently subsidies. In Zone 1 First Nations could sell power at 50% more through a utility like SolShare Energy compared to a utility that sells through a re-opened SOP program.
Based on our calculations there are over $60 million in economic opportunities for First Nations under the current utility rules.
As a utility operating in BC we are currently planning 5 new renewable power plants. Our plan is to include indigenous ownership in all of these. Some are on-reserve and some off.
I would be happy to speak to anyone from Indigenous Communities about how they can take advantage of the current rules to create economic opportunities and more clean energy in BC.
Thank you for clarification. Would you be willing to inform Band Offices of this potential? Is anyone covering this topic for APTM?
Hi Justine, We have approached a few Band Offices about this. And will be contacting more. It seems to take time to develop trust and get them to sign off on a project. Also some of the Nations with the best potential are too busy with more pressing issues like housing and health.