New legislation ensures B.C. benefits from clean, affordable electricity
The Province has introduced legislative amendments to enable regulation of electricity service for cryptocurrency miners and also to eliminate the former government’s Standing Offer Program for purchasing power.
“Demand for electricity is increasing as B.C.’s economy grows and people and businesses make the switch to clean energy,” said Josie Osborne, Minister of Energy, Mines and Low Carbon Innovation. “We’re working with BC Hydro to ensure we have the electricity we need to build a clean economy and power our future, and that includes regulating electricity service for energy-intensive cryptocurrency miners that create very few local jobs.”
Cryptocurrency miners consume large amounts of electricity to run high-powered computers 24/7, while creating very few jobs or economic opportunities for people in British Columbia. BC Hydro’s clean, reliable and affordable electricity has attracted growing interest from cryptocurrency miners looking to locate in British Columbia. Unchecked growth of cryptocurrency mining operations could make it challenging and more expensive to provide the clean electricity that homes and businesses need to switch off fossil fuels, or that new industries need to power up and create jobs.
In December 2022, the Province issued a direction to the BC Utilities Commission (BCUC) suspending new electricity connections for cryptocurrency mining for 18 months. Twenty-one projects, requesting a total of 11,700 gigawatt hours per year (GWh/y) were temporarily suspended. That is equivalent to more than two Site Cs worth of annual energy.
Proposed amendments to the Utilities Commission Act would enable government to make permanent regulations respecting the provision of electricity service by public utilities to cryptocurrency miners, such as prohibiting, restricting or regulating service for cryptocurrency mining projects. In summer 2023, the Province began engagements with First Nations, local governments and industry regarding the design of a permanent cryptocurrency policy.
Regulating electricity connections for cryptocurrency mining in B.C. is consistent with actions to temporarily or permanently restrict electricity for cryptocurrency mining in other provinces, including New Brunswick, Manitoba and Quebec.
The legislation also includes amendments to repeal sections of the Clean Energy Act that were used to create the former government’s Standing Offer Program.
“For years, the former government bought too much power when we didn’t need it through their Standing Offer Program, mostly from run-of-river projects. And they paid too much for it – offering fixed-price contracts at almost three times the market price,” Osborne said. “This led to higher rates for people and businesses. We’ve kept rates below inflation for six years in a row and are now moving forward with a competitive call for power – BC Hydro’s first in 15 years.”
Established in 2008, the Standing Offer Program was a continuous-intake program that provided long-term energy-purchase agreements for small, grid-connected independent power projects at a fixed price, increasing each year with inflation. Some of these contracts are costing BC Hydro $120 per megawatt hour, well above the market price. Future commitments from the program are estimated at close to $2.5 billion, with the last contracts signed not expiring until 2062.
In addition, many of the projects supported by the program were run-of-river hydro projects that often provide the bulk of their energy during spring freshet, when both provincial demand for power and market prices are at their lowest.
In 2019, the Province suspended the program indefinitely as part of measures included in Phase 1 of the BC Hydro Comprehensive Review to reduce BC Hydro’s energy procurement costs and keep rates affordable. Existing contracts continue to remain valid. Suspending the Standing Offer Program has saved people and businesses an estimated $120 million on their hydro bills over the past five years.
In April 2024, BC Hydro issued a request for proposals to acquire approximately 3,000 GWh/y per year of clean electricity. This is BC Hydro’s first competitive call for power in 15 years and includes requirements for a minimum 25% First Nations equity ownership in projects.
This will be the first in a series of calls for power, as BC Hydro requires more power to electrify B.C.’s growing economy. The competitive call is expected to result in projects at significantly lower cost than the Standing Offer Program. BC Hydro expects its next call to be issued in 2026, with successive calls to be issued approximately every two years.
Under a separate procurement stream, the Province has contributed $140 million to the BC Indigenous Clean Energy Initiative to support First Nations communities by funding smaller, grid-connected clean energy projects (i.e., fewer than 15 megawatts (MW)) that are not big enough to meet the minimum threshold under the BC Hydro call for power (40 MW).
Quick Facts:
- Electricity demand in B.C. is expected to increase by 15% or more between now and 2030 due to population growth, housing construction, increased industrial development, and people and businesses switching from fossil fuels to clean electricity, among other factors.
- B.C. has the second-lowest residential electricity rates in North America, and the third-lowest commercial and industrial rates.
- BC Hydro rates are 15.6% lower than the cumulative rate of inflation over the past seven years (starting 2017-18).
- In addition, rates are currently 12.4% lower than what they would be under the previous government’s 10-year rates plan.
- Currently, 98% of the power generated for B.C.’s integrated grid comes from clean or renewable resources, making B.C. a leader in North America when it comes to clean energy.
Learn More:
For information about BC Hydro’s call for power, visit:
https://news.gov.bc.ca/releases/2024EMLI0018-000470
For more information about B.C. legislation, visit: https://strongerbc.gov.bc.ca/Legislation