About Independent Power Projects
Independent projects produce nearly 20,000 GWh a year
BC Hydro acquires power from Independent Power Producers (IPPs) to help meet B.C.'s electricity needs.
IPPs develop and operate projects such as wind, water and biomass. IPPs include power production companies, municipalities, First Nations and customers. IPPs provide approximately 19,762 GWh electricity each year.
Why does BC Hydro purchase electricity from IPPs?
BC Hydro faces a gap when the amount of electricity that we can supply from existing resources is outstripped by the amount we'll need to meet future demands from our growing population and economy. A variety of measures are required to ensure we have sufficient, reliable power for generations. These include implementing conservation and efficiency initiatives, maintaining and expanding our existing generation and transmission system assets, and adding more supply to our system through long-term electricity purchase agreements with IPPs.
IPPs help us meet our customers' electricity needs by developing and operating innovative, sustainable projects that help maintain B.C.'s competitive advantage resulting from clean, renewable power supply. Ratepayers are not exposed to market risk with the long-term price certainty, while project development responsibilities and costs are shifted to the IPPs.
How does BC Hydro acquire electricity from IPPs?
BC Hydro acquires power from IPPs through various processes, namely competitive call processes, standard or open offers, and bilateral arrangements.
Power Procurement Practices
To continue to learn from past experience and "best in class" industry trends, BC Hydro retained Merrimack Energy Group, Inc. in 2011 to conduct an independent review of its power procurement practices. Merrimack has significant experience working with utilities, regulators and independent power producers on energy procurement processes.
In its findings, Merrimack found aspects of BC Hydro's current practices that meet or exceed industry standards as well as areas for improvement, as highlighted in its report [PDF, 744 KB].
As part of BC Hydro's response [PDF, 30 KB] to Merrimack's recommendations, BC Hydro has prepared a high-level summary of its general energy procurement practices, including guiding principles and procurement procedures [PDF, 456 KB].
BC Hydro has also developed contracted generator baseline guidelines [PDF, 640 KB] (GBL) for customers with self-generation. The guidelines outline the framework that BC Hydro uses in setting a contracted GBL for customers with new or incremental self-generation facilities who are considering entering into a prospective Electricity Purchase Agreement (EPA) with BC Hydro. Under such EPAs, BC Hydro provides self-generating customers with financial payments in exchange for these customers generating more energy than they would otherwise. The BCUC approved the contracted GBL guidelines pursuant to Order G-194-15.
In addition to the GBL Guidelines, the Transmission Service and General Service Self-Generation in the BC Hydro Service Area [PDF, 106 KB] sets out the factual context for self-generation in BC Hydro's service area. It provides the background for BC Hydro's use of contracted GBLs and the principles reflected in the GBL guidelines.
The following acquisition processes are underway to acquire additional power:
- A Standing Offer Program for projects sized between 100 kW, up to and including 15 MW
- A Micro-SOP for First Nations and Communities for projects over 100 kW up to and including 1 MW
- A Net Metering Tariff for customers with projects sized at 100 kW or less