Energy efficiency investments to reduce costs for pulp and paper producers
SURREY – Bill Bennett, Minister of Energy and Mines and Minister Responsible for Core Review and Jessica McDonald, President and CEO of BC Hydro, announced a new Power Smart program that will reduce electricity costs for pulp and paper producers.
The program will help producers remain globally competitive, supporting thousands of jobs across the province and will reduce overall electricity demand, keeping rates low for all customers over the long-term.
The new program builds on existing initiatives for industrial customers where BC Hydro provides a financial incentive of up to 75 per cent of the project cost to support investments in more energy efficient equipment.
Under the new program, thermo-mechanical pulp and paper producers, which have electricity costs that account for as much as 30% of their operating budgets and represent 10% of BC Hydro's annual power sales, will be eligible for increased incentives ranging from $5 million to $25 million for projects that can reduce their power consumption.
The program is expected to reduce electricity consumption by 300 gigawatt hours per year which will save pulp and paper producers $17.5 million in annual power costs. In addition, by reducing overall electricity demand by this amount, BC Hydro will avoid the need to acquire new sources of power generation, saving ratepayers up to $265 million and keeping rates low for all customers.
The demand for electricity in British Columbia is expected to grow by 40% over the next 20 years. Investing in energy efficiency is a key component of BC Hydro's Integrated Resource Plan target to meet 78% of this new demand through conservation, which is more cost-effective than acquiring new sources of power generation.
There are seven thermo-mechanical pulp and paper operations in B.C. operated by four companies: Canfor (Taylor), Catalyst Paper (Crofton, Port Alberni and Powell River), Paper Excellence (Chetwynd and Port Mellon) and West Fraser (Quesnel).
The new program adds to the $1.6 billion that BC Hydro will spend on Power Smart initiatives as part of the 10 Year Plan. Earlier this month, government, BC Hydro and FortisBC announced an expansion of energy-efficiency programs to help customers, particularly those on low-incomes, reduce their electricity and gas bills.
BC Hydro continues to work with all of its residential, commercial and industrial customers on Power Smart programs and is also conducting a rate design review to provide large industrial customers with more flexible rate options to manage their costs and stay competitive.
Bill Bennett, Minister of Energy and Mines and Minister Responsible for Core Review
"Government and BC Hydro have worked closely with large industrial power users to find collaborative ways to reduce their electricity costs and make investments in energy efficiency that will benefit all ratepayers. This new program is a key part of our 10 Year Plan commitment to provide customers with tools to manage their energy costs as BC Hydro makes investments to maintain and grow our electricity system."
Jessica McDonald, President and CEO, BC Hydro
"Electricity is the backbone of our economy. Thanks to the investments made in our hydroelectric system decades ago, our industrial customers enjoy among the lowest rates in North America. However, as we renew and reinvest in our system to ensure safe, reliable power in B.C., I'm pleased that we are able to offer a new opportunity for our industrial customers to save electricity and reduce their operating costs."
Joe Nemeth, President and CEO of Catalyst
"I would like to thank the provincial government and in particular, Minister Bennett, BC Hydro's leadership, namely Jessica McDonald and her predecessor Charles Reid along with Joanna Sofield, for constructively working with industry to find timely, workable solutions to reduce power costs. This is an important step forward, which combined with the rate design review currently underway, will allow us to remain competitive and continue to generate economic benefits for the Province of B.C."
David Formosa, Mayor of Powell River
"I am very pleased that Minister Bennett and the provincial government listened to the concerns of our communities that rely on this industry as their economic backbone. This is an important first step in dealing with the increasing power costs facing this industry and along with the rate review process, will go a long way to ensuring that the jobs in Powell River and other communities will be here for the long term."
Mike Verdiel, Union President of Unifor Local 76
"This energy conservation program will improve the long-term viability of jobs at Catalyst's mills and the mill community as a whole. A large part of Powell River's economy relies on the pulp and paper mill. This new program created by the Ministry and BC Hydro is not only good news for resource, ratepayers and Catalyst – it means job stability and opportunity in Powell River also."
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Ministry of Energy and Mines and Responsible for Core Review
250 952 0628
BC Hydro Media Relations
604 928 6468