Frequently Asked Questions
Our Frequently Asked Questions (FAQs) give you answers to common questions regarding the Standing Offer Program (SOP). If you don't find an answer, we invite you to ask us a question. BC Hydro's answers to the questions are only for general information and do not constitute legal or other advice. If there is any conflict between an answer to an FAQ and the Program Rules or the Standard Form EPA, the Program Rules and the Standard Form EPA govern. Capitalized terms in the FAQs have the meaning given to those terms in the Glossary to the Program Rules unless otherwise indicated in the FAQ.
- Eligibility (2 new questions)
- First Nations Consultation (3 new questions)
- General
- Generation Technology (1 new question)
- Interconnection
- Permitting
- Pricing (1 new question)
- Process
Eligibility
1. What are the eligibility requirements for the Standing Offer Program?
The eligibility requirements are summarized on the Who Can Apply page and are detailed in Section 2 of the Program Rules.
2. Can we participate in the Standing Offer Program if we have a cluster of projects that exceeds 15 MW, but each individual project within the cluster is less than 15 MW?
The Standing Offer Program is intended for small energy projects. BC Hydro may reject any Application where BC Hydro determines that the project described in the Application is so closely connected with, or related to, another existing or proposed generator that the project described in the Application and the existing or proposed generator should be considered to be a single project and BC Hydro determines that the size of the combined projects is such that the project described in the Application is not suitable for the Standing Offer Program.
Factors BC Hydro may consider in its sole discretion in determining whether or not two or more projects are effectively part of a larger aggregate project would likely include, but are not limited to:
- Whether or not the projects share common facilities such as penstocks, powerhouse, etc.
- Whether or not the projects share interconnection facilities and/or a point of interconnection with the BC Hydro Integrated System
- Whether or not the projects share the same physical site
- Whether or not the projects will operate under common permits
- Whether or not the projects share the same fuel source
- Whether or not the projects are under common ownership (direct or indirect)
If you are unsure if your project qualifies for the Standing Offer Program, please submit your question along with project details to standingoffer@bchydro.com.
3. Would local governments in the FortisBC service area be able to sell power to BC Hydro through the Standing Offer Program?
Section 2.13 of the Standing Offer Program Rules states "Projects must be interconnected to the Transmission System or the Distribution System through a direct interconnection or an Indirect Interconnection." In the Glossary of the Program Rules, the definition of "Indirect Interconnection" contemplates interconnections through a public utility system owned and operated by a third party such as FortisBC. Thus, in principle, entities (including local governments) within the FortisBC service area are eligible to participate in the Standing Offer Program. There are a number of sections and clauses in the Program Rules (e.g. Sections 2.13 and 5.3) and the Standard Form EPA (e.g. Appendix 11) specifically addressing the treatment of Indirect Interconnections which should be considered for projects contemplating indirect interconnection to the Integrated System. In addition, the concept of a "generator baseline" as described in Section 2.6 of the Program Rules, which establishes the amount of energy that has historically been used to serve an existing load or commitment and is therefore not eligible under the SOP, is also applicable to projects located within the FortisBC service area. As noted in Section 2.13 of the Program Rules, BC Hydro will require clear evidence that power from an entity inside the FortisBC service area (in excess of any applicable generator baseline) will in fact be delivered into the BC Hydro service area together with an appropriate method of tracking such deliveries.
4. If additional capacity becomes available, can I apply to the Program again for the same site?
No. As outlined in the Program Rules, two Standing Offer Program contracts cannot be issued for the same site, or for a Common Generation Facility. However, applicants can approach Energy Procurement at BC Hydro to discuss the terms, if any, under which their existing Standing Offer Program EPA may be amended.
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5. Under the Clean Energy Act the definition of "clean or renewable resource" as biomass, biogas, geothermal heat, hydro, solar, ocean, wind or any other prescribed resource is not exhaustive enough and open to interpretation. What is BC Hydro doing about this?
The SOP will only accept clean or renewable energy as defined in the Clean Energy Act. The list of defined resources also includes "any other prescribed resource". If you have a resource that you believe should be prescribed as clean or renewable, please contact the Ministry of Energy to make this request. If you are not sure that a particular technology is included in the clean or renewable definition, you could send us a detailed inquiry through the SOP website.
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6. One of the key requirements of the SOP is that the energy must be generated by a facility that generates electricity from clean or renewable resources or that is a high-efficiency co-generation facility. Could you explain the eligibility criteria around "high-efficiency co-generation"?
The Program Rules will consider eligible energy as energy delivered to BC Hydro under the Project EPA that must be Clean Energy or energy that is generated by a high-efficiency co-generation facility (i.e. using natural gas). If a project uses high-efficiency co-generation, BC Hydro requires evidence that the project meets the BC Energy Plan requirement of an overall efficiency rate (heat and electricity production) in excess of 80%. The Ministry of Energy and BC Hydro are working together to provide additional definition for high efficiency co-generation under the SOP Program Rules either through the development of a standard or guideline. We will commit to provide either a FAQ or an additional definition in the Program Rules when this information is available.
First Nations Consultation
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1. Where can I obtain information about First Nation consultation requirements?
Developers should contact their local FrontCounter BC office in the Ministry of Natural Resource Operations to obtain information on consultation requirements associated with the permits they will require.
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2. When should I be consulting with First Nations?
Developers are encouraged to commence consultation with First Nations as early as possible.
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3. What material should be included in the First Nations consultation record?
A typical First Nations consultation record includes copies of correspondence with First Nations concerning the project, dates of meetings with First Nations, as well as minutes or meeting notes and presentation materials. A typical First Nations consultation record also includes any concerns that First Nations have identified with the project and responses by the developer to those concerns. Similar communications with Crown permitting agencies regarding First Nations issues and concerns should also be included.
General
1. How is the Standing Offer Program different from a Call for Tenders (CFT)?
The difference between the Standing Offer Program and previous BC Hydro CFTs is that developers are not competing against each other for an EPA in the Standing Offer Program. Developers who are offered an EPA in the Standing Offer Program will be paid a pre-determined price. Unlike a CFT process, the Standing Offer Program does not create any legal obligations for the parties until a Project EPA has been signed by both BC Hydro and the developer.
2. How much power is BC Hydro targeting to acquire under the SOP and is there a quota of how much BC Hydro will buy?
The BC Energy Plan states that "Except for local safety and security reasons, there should be no quota initially for the Standing Offer Program". As such, the Standing Offer Program will not have a quota. Although the Standing Offer Program does not have a specific target, BC Hydro estimates that the pricing structure will attract a cumulative total of approximately 1,000 gigawatt hours per year of energy over two years.
3. When does the Standing Offer Program expire?
There is currently no specified expiry date for the Standing Offer Program.
4. We are preparing an application for a customer who is currently selling power in short-term increments to Powerex, a wholly-owned subsidiary of BC Hydro. Is Powerex considered to be BC Hydro or a third party?
For the purposes of the Standing Offer Program, Powerex is considered to be "a party other than BC Hydro" and so, in answer to your specific question concerning section 2.4 of the Application Form, an existing or previous electricity purchase agreement with Powerex for electricity generated by the project should be submitted in Exhibit 11, and section 2.4.c of the Application Form is the relevant section in which to respond with respect to the previous or existing contract(s) with Powerex.
5. What are the costs involved in leasing a revenue meter?
The details of the revenue metering equipment required vary depending on each project's situation.
Lease costs are generally in the range of $100/month per meter. However, some projects may require more than one meter depending on the circumstances. For example, instances where power is being produced behind a load or where the electricity is being transmitted on a private power line (which serves other generators or loads) may require more than one revenue meter for proper measurement. For questions, please contact BC Hydro Revenue Metering.
Generation Technology
1. What types of generation technologies are eligible?
New and existing generators using any generation technology that meets the requirements to be considered either Commercial Operation Generation Technology or Completed Prototype Generation Technology, except nuclear, are eligible.
2. How does BC Hydro define Commercial Operation Generation Technology?
Commercial Operation Generation Technology means that the generation technology is readily available in commercial markets and in commercial use (not demonstration use only) as evidenced by at least one generation plant (which need not be owned or operated by the developer) generating energy for a period of not less than one year, to a standard of reliability generally required by Good Utility Practice (as defined in the Standard Form EPA).
3. Are emerging technology projects eligible for the Standing Offer Program? What is Completed Prototype Generation Technology?
Emerging technologies are eligible if they meet the criteria for Completed Prototype Generation Technology, which means that the generation technology has completed a program of testing, with satisfactory results, using a sub-scale or full-scale prototype of the technology to simulate real-world conditions, which sufficiently demonstrates technical viability and safe performance of the technology at full-scale and under real-world conditions, as evidenced by the certification of a professional engineer (or equivalent engineering designation) registered or licensed in a jurisdiction that regulates the practice of engineering.
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4. How can an applicant complete a Completed Prototype Generation Technology certification?
Ideally, the professional or licensed engineers involved in the testing and development of the applicant's technology are familiar with the formal metrics-based process of technology readiness assessment and have completed a prototype testing protocol in a simulated or controlled environment. Alternatively, a professional or licensed engineer familiar with technology assessment can be retained to review tests completed to date and provide their professional conclusion as to the validity of the tests and their results.
Interconnection
1. Can I connect my off-grid house to the power line I intend to build for my project?
Possibly, depending on the interconnection circumstances involved.
2. Who should I contact with my questions about interconnecting my Standing Offer Program project?
Information on obtaining an interconnection for a project is available in the interconnection section of the Standing Offer Program Rules and on the Generator Interconnections website.
For all inquiries regarding feasibility discussions, interconnection applications, screening processes, preliminary studies and interconnection impact studies, applicants are encouraged to contact BC Hydro Interconnections.
3. What kind of interest is paid on Network Upgrade Security?
BC Hydro requires Standing Offer Program participants to provide Network Upgrade Security in the form of a letter of credit. The required form for the Network Upgrade Security is contained in Appendix 6 to the Standard Form EPA.
These letters of credit are guarantees from a lender that they have the necessary funds to cover the Network Upgrade Security on the developer's behalf. Since no actual funds are received by BC Hydro via the letter of credit, there is no need to pay interest.
4. Are there any optional interconnection studies I can undertake prior to submitting my application?
Developers of projects that will connect to the Distribution System may choose to undergo an optional screening process or to obtain an optional preliminary interconnection study prior to submitting their Standing Offer Program Application. A screening process provides a conceptual level estimate of the interconnection requirements while a preliminary study provides a feasibility level estimate of the interconnection requirements and will provide some insight into costs and potential issues, which may result in design changes to the project.
Developers of projects that will connect to the Transmission System may choose to obtain an optional feasibility study which provides a high level assessment of technical requirements and potential interconnection network upgrade costs.
A screening process, preliminary interconnection study or feasibility study does not replace the need to conduct the more detailed interconnection impact study required for a Standing Offer Program Application.
Permitting
1. Will permits, zoning and site information be required when submitting the Application Form?
The Program Rules state that documents with respect to a project's permits, site control and zoning must be provided at the time an Application is submitted. Please refer to the Application Form for more details with respect to which documents will be required. Where the project consists of a Completed Prototype Generation Facility, BC Hydro reserves the discretion to identify the permits that are required prior to an offer of an EPA following a review of the project.
Pricing
1. What price of energy will my project be receiving?
BC Hydro will pay for each MWh of energy delivered based on:
- the base price as determined by the region of the point of interconnection;
- any CPI escalation applicable to the base price; and
- the time of delivery adjustment factor specified in the EPA.
A sample calculation [PDF, 15 Kb] is provided as an example.
2. Will the price vary based on the generation technology used?
BC Hydro offers all generation technologies the same price, with prices differentiated by the region where the energy is delivered to BC Hydro. The prices to be paid to developers under the Standing Offer Program are detailed in Section 3 of the Program Rules.
3. Where can I find the current British Columbia CPI?
Monthly reports on the British Columbia CPI can be found on the BC Stats website.
4. Did BC Hydro consider revising the Standing Offer Program to allow flow-throughs of extraordinary increases in government taxes, rentals and levies? This would enable more developers to get financing to build their projects at the set SOP price since these government change risks are beyond the control of developers.
Yes, flow-throughs were considered as part of the SOP Review process but BC Hydro has decided not to make any associated changes to the SOP Standard Form EPA. The SOP price escalation mechanism described in the Standing Offer Program Rules and Standard Form EPA continues to be viewed as a sufficient means of addressing any potential increases in government taxes, rentals and levies.
The Standing Offer Program pricing is based on the levelized bid prices from the Clean Power Call. The Clean Power Call contract contains no provisions for the flow through of increases in government taxes, rentals and levies, so it is reasonable to assume that the Standing Offer Program sufficiently prices this risk into the contract, making the contract financeable.
5. Why are you applying a loss adjustment to the SOP pricing for projects where the energy is used in the closest load center rather than the Lower Mainland?
Even if a project actually serves a local load, it would be displacing other energy which would have to travel on BC Hydro's grid to serve load elsewhere in the province. For loss adjustment purposes, the load being served is assumed to be the Lower Mainland.
Project energy losses vary depending on location, types of transmission infrastructure, system load conditions, and other generators in the vicinity. Losses can change over time as these parameters change. For BC Hydro's competitive call processes, individual loss studies considering these parameters are conducted and the loss estimates are used to adjust bid prices.
For the SOP, BC Hydro developed a postage stamp losses price adjustment by region using the loss estimates from the studies conducted in the Clean Power Call. This approach simplifies the pricing, provides applicants with price certainty, and avoids the cost and complexity of individual loss studies for each developer.
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6. With regard to the Report on the SOP 2-Year Review (January 2011), could you please provide a further explanation for how you transformed the 2010 levelized total energy price into the "unlevelized" price?
The levelized energy price represents the series of equal (i.e. level) real annual prices for generation delivered over the term of the electricity purchase agreement. The present value of this series of prices per unit of energy output, discounted at BC Hydro's real discount rate, is equal to the present value of the price if it were escalated annually at CPI and discounted at the BC Hydro's nominal discount rate. The derivation of SOP prices starts with levelized pricing from the Clean Power Call. However, in the Standing Offer Program, only half the SOP price is escalated annually. Therefore there is a difference between the levelized price and the unlevelized price specified in the Program Rules, which are stated in 2010 dollars.
In order to transform the levelized price into the unlevelized SOP base price, a 20-year analysis is conducted where 50% of the unlevelized price is escalated at CPI and 50% of the unlevelized price is not escalated at CPI. The total present value is calculated by summing the present values of these two series, discounted at BC Hydro's nominal discount rate of 8%. This present value is equal to the present value of levelized price discounted at BC Hydro's real discount rate. The unlevelized price is the number that satisfies the noted equation. In this calculation, BC Hydro assumed an annual CPI of 2.1%.
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Process
1. I have a project that is ready to go. How do I apply to the Standing Offer Program?
Developers must submit an Application Form and supporting documentation for their project. See How to Apply.
2. Is there an application fee for the Program?
There is no application fee for the Standing Offer Program. However, there will be other costs associated with the application process. As part of the process the developer is responsible for paying the costs of required interconnection studies. Developers should contact BC Hydro Interconnections early in the process of preparing their Application to determine what studies are required and the costs.
3. Do I have to specify how much energy I will generate?
Yes, all applicants need to provide us with their project capacity and estimated monthly energy production.
4. Can I start my interconnection study before I apply?
Developers may commence the interconnection impact study process prior to filing a Standing Offer Program Application. However, developers should be aware that depending on the circumstances, BC Hydro may not accept such an interconnection impact study for purposes of the SOP without further verification or restudy to ensure that the earlier study remains valid and accurate based on current information. The developer is responsible for the costs of obtaining any such verification or restudy.
Last Modified: Mar 18, 2011
