Courtesy of McCarthy Tetrault. View original article here.
On March 14, 2018, BC Hydro announced that the Standing Offer Program (“SOP”) and Micro‑Standing Offer Program (“Micro-SOP”) will remain on hold until the BC government has completed its operational review of BC Hydro. No additional electricity purchase agreements (“EPAs”) will be issued until this review is complete. In conjunction with this announcement, BC Hydro also announced that it would be pursuing five small‑scale clean energy projects with five First Nations, with an aggregate of 36.5 MW.
The BC government’s review of BC Hydro comes after a decision of the independent British Columbia Utilities Commission (“BCUC”) earlier this month where the BCUC rejected BC Hydro’s request, following a direction from the BC government, to freeze BC Hydro’s electricity rates this year. Instead, the BCUC approved a 3% increase to electricity rates as of April 1, 2018. In its decision, the BCUC expressed concern about the high unit costs of BC Hydro’s portfolio of EPAs with independent power producers (“IPPs”) and recommended that careful consideration be given to the timing of its existing IPP contracts and contract renewals, to ensure that the timing of delivery of energy is aligned with BC Hydro’s forecast load, after allowing for energy from BC Hydro’s heritage assets.
Applications under the SOP have been suspended since August 18, 2017 when BC Hydro announced it would not be accepting any new applications for the SOP pending completion of a review of prices and annual energy volumes. This review commenced early last year according to an announcement that BC Hydro made on February 1, 2017, which we covered in a previous blog post.
About the SOP and Micro‑SOP
The SOP and Micro‑SOP, which we have covered in a previous blog post, are aimed at new, small scale, renewable energy projects with capacities of 100 kW to 15MW (for the SOP) and 100 kW to 1 MW (for the Micro‑SOP). These programs currently represent BC Hydro’s only active procurement opportunity for IPPs. General information regarding the SOP and Micro‑SOP, including the program rules and standard‑form EPA, is available on BC Hydro’s website.