A2 - The Terrace Standard, Wednesday, December 04, 2002 Gov’t promises to reduce the bite of power rate hikes By JEFF NAGEL B.C.'S NEW energy policy is being hailed as a major retreat from earlier recom- mendations and should lar- gely shield consumers from the massive price shocks: that have ‘rocked Alberta and Ontario, Energy minister Richard Neufeld unveiled. the’ play ~ last week. It calls for new power generation projects to be built by private companies rather than B.C, Hydro. But it also entrenches a 10-year “Heritage Con- tract” Neufeld said. will _ ensure lower-cost power for B.C. residents and busi- nesses well into the future. That means the much cheaper “old power” ftom existing dams and reser- voirs will be used to buffer the expected higher costs of new power sources -~ meaning a gradual rise in prices, rather than a sud- den massive jump. “We're not going to “.market rates,” Neufeld _ pledged to a chamber of . commerce business. lun- cheon at the golf course here Nov. 28. B.C. Hydro will remain _ government-owned, but a ; second separate Crown corporation is to be cre- ated to oversee the electri- -cal pawer transmission prid. ; ‘Phat’s to assure new in- “ depedent power producers ‘ they’ll get fair transmis- _ sion treatment and also - address U.S. demands so : Hydro can continue its lu- crative power exports there. The North Central Mu- ‘Nicipal Association (NCMA) - which repre- sents northern towns — was ’ generally supportive of the ‘new document. ‘The NCMA had soun- - ded alarm over the earlier : proposals. of a task force to allow B.C. electricity : prices to rise 30 to 60 per - cent fo market rates. Past president Dan Ro- gers welcomed the pro- vince’s decision to discard that idea. He also said the Herit- age Contract concept locks in the low-cost ener- gy produced at existing dams as an entitlement for B.C. consumers. How much prices go up the B.C. Utilities Commis- sion, which is ‘charged with setting rates. But Rogers said the NCMA is somewhat con- cerned that could be forced to. pay higher prices than Vancou- verites depending on what rules are put in place, One possibility is a sys- tem of stepped rates. Con- sumers would get a basic amount of energy at a low ptice, but further usage would be at sharply in- creased rates to encourage conservation. Northern homes, busi- nesses, schools and hospi- tals could face higher costs under that plan, he said, simply because of the colder climate. “That would discrimi- nate against northerners,” he said. But Neufeld said there are no such plans. “Stepped rates are something we're going to try with a few industrial customers as a test,” he said. The move to put power prices back in the hands of the utilities commission — not cabinet — will depoliti- cize energy pricing, he added. Neufeld dismisses sug- gestions the division of B.C. Hydro and the reform measures will lead to the eventual stealth privatiza- tion of B.C, Hydro. He said the goal in dealing with independent producers will be to get the lowest possible price for B.C. consumers. Business betlefits pro- mised include iower prices at off-peak times and the will now be determined by northerners— option to buy power direct- ly from independent produ- cers. Hydro will also aim for 50 per cent new power from clean sources, and has- ruled out use of nu- clear power. — The final energy policy mirrors many of ‘the ‘changes Alcan had urged in its submission ta the en- ergy task: force. Neufeld -confirmed that under the ‘policy Alcan will be able to. export power directly to the U.S. without selling through B.C. Hydro. Alcan has already set up a U.S. subsidiary for power sales there - Alcan Power Marketing Inc. Neufeld said recent power sales by “Alcan are legal and consistent with the company’s agreements.. He also said greater ef- ficiency at its aluminum smeiter makes sense. “Alcan’s going to up- grade the smelter in Kiti- mat, Use some more new technology that will con- sume less electricity. That’s whal we all talk about - conservation,” he said. “If you can produce as much aluminum with less electricity I don’t think we should be against that kind of thing.” He also indicated Vic- toria doesn’t want to undu- ly intefere with the com- pany’s operations. “They run that busi- ness,” he said. “Government doesn’t run business. They used to under the last administra- tion but’ we got out of that.” Neufeld said the energy policy does not contem- plate a resurrection of Alcan’s cancelled half- built Kemano Completion Project. The next new -Majer, source of hydroelec- tricity would likely be the ‘proposed’ $2 billion 1,000- megawatt Site C dam on the Peace River, he indi- Richard Neufeld cated, Power transmission line upgrades may he needed lo carry power from new projects. 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