The British Columbia government last Monday unveiled an ambitious energy plan under which BC Hydro will be restructured into two separate Crown corporations, one for generation and distribution, and the other for transmission.

Under the proposal, which the British Columbia government said will be fully implemented by 2004, independent power producers (IPPs) will be able to access the transmission system and sell directly to large consumers. This, in turn, will stimulate new investment in power generation and give producers the confidence they need to expand supply, the province believes.

IPPs will develop new generation, with BC Hydro’s role limited to undertaking efficiency improvements at existing facilities. A separate entity, BC Hydro Transmission Corp., will operate BC Hydro’s publicly-owned transmission system in order to ensure fair access for all generators.

In addition, the plan calls for electricity distributors to pursue a voluntary goal to buy at least 50% of their new power supply from clean resources in the province that are renewable or result in a net environmental improvement over existing generation. “New rate structures…will give better signals for energy saving activity,” the plan said.

British Columbia’s government will also expand and update its Energy Efficiency Act and regulations and will change utility regulatory practices to remove a disincentive to energy efficiency investments by utilities. Also, in order to allow for a fair evaluation of the role of coal-fired generation in British Columbia’s electricity future, the province will adopt emission guidelines for coal-fired power plants intended to allow British Columbia to compete for investment with neighboring jurisdictions.

BC Hydro last month found itself in the position of having to deny reports in the Canadian press that the provincially-owned electric utility was mulling plans to divide into at least seven different independent companies.

BC Hydro produces between 43,000 and 54,000 GWh of electricity annually from 32 hydroelectric facilities, two gas-fired thermal power plants and two combustion turbine stations. Through its wholly-owned power marketing subsidiary, Powerex, BC Hydro is extensively involved in energy trade outside the province. Powerex markets wholesale energy products and services in western Canada and the western U.S. and is a growing niche player in other markets in North America.

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