ORDER NUMBER

G-61-25

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

British Columbia Hydro and Power Authority
Long Term Resource Plan Extension Request

 

BEFORE:

M. Jaccard, Commissioner

 

on March 6, 2025

 

ORDER

WHEREAS:

 

A.      By Order G-58-24 dated March 6, 2024, pursuant to section 44.1 of the Utilities Commission Act (UCA) British Columbia Utilities Commission (BCUC) accepted the British Columbia Hydro and Power Authority
(BC Hydro) 2021 Integrated Resource Plan, and directed BC Hydro to file its next long-term resource plan with the BCUC no later than October 31, 2025;

B.      By letter dated February 20, 2025, BC Hydro requests an extension to the deadline to file its next long-term resource plan to October 2026; and

C.      The BCUC has considered BC Hydro’s request and determines that an extension to the deadline for
BC Hydro’s next long-term resource plan is not warranted.

 

NOW THEREFORE for the reasons outlined in the decision accompanying this order, the BCUC denies BC Hydro’s request for an extension to the deadline to file its next long-term resource plan.

 

 

DATED at the City of Vancouver, in the Province of British Columbia, this      6th      day of March 2025.

 

BY ORDER

 

Electronically signed by Mark Jaccard

 

M. Jaccard

Commissioner

 

 

 

British Columbia Hydro and Power Authority
Long Term Resource Plan Extension Request

 

1.0              Background

By Order G-58-24 dated March 6, 2024, pursuant to section 44.1 of the Utilities Commission Act (UCA) British Columbia Utilities Commission (BCUC) accepted the British Columbia Hydro and Power Authority (BC Hydro) 2021 Integrated Resource Plan (IRP), and directed BC Hydro to file its next long-term resource plan (LTRP) with the BCUC no later than October 31, 2025.

 

By letter dated February 20, 2025, BC Hydro requests an extension to the deadline to file its next LTRP plan to October 2026 (Extension Request). BC Hydro submits that substantial changes in three areas have increased potential risk for resource planning, and BC Hydro no longer believes that its 2024 load forecast scenarios adequately capture the nature of the potential uncertainty. BC Hydro submits that it will be neither effective nor efficient to advance and consult on the next LTRP on the basis of its current load scenarios. The three areas are:

1.       Tariffs and competition for resource project investments: In 2025, the new U.S. Administration announced policies including the acceleration of U.S.-based natural resource industry projects that compete for investment capital with BC-based project proposals, as well as potential new trade tariffs. The Government of BC has responded by committing to fast-track resource projects in BC. BC Hydro submits that time is needed to determine the impact on its load of such policies and Canada’s response to them.

2.       Lower population growth: In fall 2024, the Government of Canada reduced immigration targets. As a result, Conference Board of Canada, which provides expert economic forecasts for use in BC Hydro’s load forecast scenarios, adjusted its population growth forecast for BC downward over the near term. Population growth rates are an important influence on all load forecast scenarios, for example through the rate of new residential accounts formation and vehicle purchases.

3.       Shifts in approaches to greenhouse gas emission reduction: Recent changes to private firm investments and public policy may impact the pace at which customers choose electricity over other energy options. For example, federal electric vehicle purchase incentives have ended and North American vehicle manufacturers such as Ford have delayed plans to expand their electric vehicle offering. With a federal election expected in early 2025, there could be further changes in policy, particularly with regards to carbon taxes.[1]

 

Panel Determination

The Panel denies BC Hydro’s request for a one-year extension to the deadline to file its next long-term resource plan. BC Hydro must file its next long-term resource plan by October 31, 2025, as directed by Order G-58-24.

 

In making its determination, the Panel relies heavily on key themes that emerged during BC Hydro’s 2021 IRP proceeding. As articulated in more detail below, the Panel continues to agree with BC Hydro’s view expressed in the 2021 IRP that a more frequent and flexible approach to resource planning is an appropriate means of addressing uncertainty and changing circumstances. Additionally, the Panel does not agree that the recent developments cited by BC Hydro warrant a significant delay to the next LTRP. Finally, the Panel offers considerations for a path forward that would enable BC Hydro to file its next LTRP by October 2025.

 

Adopting a More Flexible Approach to Resource Planning

 

In the 2021 IRP proceeding, BC Hydro proposed more frequent LTRPs as a means to address the pace of change:

BC Hydro has proposed this “living” planning cycle with regular more frequent filings in an effort to better match resource plans to the potential pace of change during this time of energy transition. Aligning the long-term resource planning cycle with the potential pace of change allows future plans to remain current while balancing flexibility and mitigating cost risk.[2]

The Panel is disappointed that for the first LTRP following the 2021 IRP, BC Hydro is requesting to deviate from its own stated intent to file more frequent and targeted LTRPs. The BCUC expressed strong support for
BC Hydro’s proposal in the 2021 IRP Decision, noting that more frequent plans would enable BC Hydro greater flexibility to respond to changing conditions.[3] The Panel considers the three recent developments cited by
BC Hydro as examples of why more frequent LTRPs constitute an essential tool for BC Hydro to manage uncertainty. More frequent filings, combined with more efficient BCUC reviews, can be an effective method to allow BC Hydro to react more quickly to changing circumstances.

 

If load forecasts are refreshed more regularly, this can mitigate some of the inherent uncertainty associated with long-term forecasting. The BCUC noted in its 2021 IRP Decision that more frequent LTRPs will mitigate the risk that load would outpace the highest load scenario between resource plan cycles,[4] and the Panel is of the view that the same logic applies, namely, more frequent LTRPs mitigate the risk that load stagnation would fall below BC Hydro’s lowest load scenario. Additionally, the BCUC noted that BC Hydro’s approach in the 2021 IRP, which considered load scenarios collectively, “can provide a pathway to manage load forecast uncertainty in the absence of more comprehensive load forecast updates.”[5] Overall, more frequent LTRPs can reduce the concerns around long-term load uncertainty, and provide the opportunity to focus more on short-term adaptive strategies.

 

The 2021 IRP proceeding also provided instructive examples of how BC Hydro’s consideration of resource options can allow it to respond to uncertainty. The BCUC’s decision on the 2021 IRP placed considerable emphasis on examining the extent to which the various aspects of the plan lead to a flexible approach which enables BC Hydro to adjust to changing circumstances,[6] and in finding the 2021 IRP was in the public interest, the BCUC observed:

BC Hydro has presented a flexible plan that will allow the utility to adjust its decisions regarding the implementation of new demand and supply side resources during a period of significant change and uncertainty[7]

The Panel encourages BC Hydro to continue to build upon the positive steps taken in the 2021 IRP to implement more flexible, adaptive resource planning as it develops the next LTRP. Such an approach is preferable to delaying the next LTRP and relying upon the 2021 IRP Base Resource Plan and Contingency Resource Plans for an extended period. This is particularly important if BC Hydro intends to advance any significant resource acquisitions in the near future.

 

Materiality of the Recent Developments Cited by BC Hydro

 

The Panel also finds that BC Hydro has provided insufficient justification that the three recent developments it cited warrant a delay to the next LTRP. Overall, the Panel is not persuaded that the three recent developments reflect the types of “significant changes” that the BCUC had envisaged when it provided the following comments on the possible circumstances that could warrant a delay to the next long-term resource plan in the 2021 IRP Decision:

significant changes in policy or other exogenous factors in the interim period may result in significant and unforeseeable changes which could substantially alter BC Hydro’s planning assumptions or Near-term Actions[8]

It appears to the Panel that the likely directional impact of the three developments described by BC Hydro would be to lower BC Hydro’s load forecasts. In the 2021 IRP, BC Hydro provided a Low Load scenario representing a prolonged stagnation in electricity demand, with assumptions including: a low electric vehicle forecast; low load for the large industrial sector developed on an account-by-account basis; and load for distribution voltage customers assumed to remain at fiscal 2021 forecast levels.[9] Based on the limited information provided by BC Hydro in its Extension Request, it does not appear conceivable to the Panel that the combined impact of these developments could be expected to result in a load forecast that was materially lower than the Low load scenario. Regardless, the Panel would expect that the impact of a hypothetical extreme low load forecast would be that fewer near-term actions, or no actions at all, would be required by BC Hydro to acquire new resources.

 

In addition, the Panel makes specific observations on each of the three developments cited by BC Hydro below:

•         The Panel acknowledges the uncertainty around the direct and indirect impacts of tariffs to BC, and more specifically the electricity sector. However, there is also little guarantee that six months or one year from now, the future status or longer-term impact of tariffs will be known with any degree of confidence. The Panel would also expect that the potential for downturns in BC’s resource industries, regardless of the specific cause, would already be an uncertainty that BC Hydro should be accounting for in its range of load scenarios or as part of its account-by-account industrial forecast method.

•         BC Hydro has provided no further characterization of the materiality of the changes to the Conference Board of Canada’s population forecasts. Additionally, BC Hydro has provided no indication that it would not be possible to re-model or to qualitatively describe the impact on the existing load forecasts in advance of the October 2025 deadline.

•         The pace of change associated with greenhouse gas emissions is an inherent uncertainty that the Panel would expect to be covered by the range of scenarios modelled by BC Hydro. The Panel does not consider that incremental changes to certain adoption trends or speculation around possible changes in future policy are material changes that warrant a delay of the LTRP development process.

It is nearly inevitable that changes will occur during the development of an LTRP that affect key planning assumptions underlying the load forecast and/or analysis of supply. The Panel notes that load forecasts can only represent point-in-time estimates of possible outlooks for future customer demand. If the Panel were to accept BC Hydro’s position that the above developments warrant a one-year delay to the filing of the next LTRP, it is conceivable that there could be more changes in the next 18 months prompting the need for further updates to the load forecast. To accept this extension request would risk introducing a perpetual cycle of delays, during which time the 2021 IRP becomes increasingly outdated.

 

Finally, even in a circumstance where BC Hydro is required to amend its load forecast, BC Hydro has not provided sufficient justification for why an additional year is required to complete the LTRP development process. BC Hydro has provided no timeline to illustrate the steps that would need to be taken between now and October 2026 under its proposed alternate timeline, or supporting explanation of why such steps cannot be completed or amended under a more compressed timeline.

 

The Path Forward

 

In denying BC Hydro’s extension request, the Panel wishes to provide further guidance of the potential next steps that can enable the timely filing of the next LTRP.

 

BC Hydro proposed in the 2021 IRP that it would be making targeted rather than comprehensive updates to its load forecast. It is unclear to the Panel based on the information provided in the Extension Request if BC Hydro has abandoned this approach, and if not, why it is not possible to make further targeted adjustments to its load forecast on a compressed timeline.

 

Regardless, the Panel observes that BC Hydro has already illustrated that it can perform updates to its LTRPs in relatively short order. In the 2021 IRP proceeding, BC Hydro filed a letter on March 16, 2023 requesting the filing of the Signposts Update[10] on the basis that it expected its proposed near-term actions were no longer sufficient to meet the future needs of customers.[11] Three months later, BC Hydro filed the Signposts Update, which included significant changes to its previous load resource balances and near-term actions. The Signposts Update serves as an example of BC Hydro’s ability to respond to changing planning circumstances in a flexible and time sensitive manner.

 

For clarity, the Panel is not necessarily recommending that BC Hydro needs to take an approach similar to the Signposts Update, and notes there are other possible options for conveying and addressing the load uncertainty that may not be reflected in BC Hydro’s current modelling. The points below are intended to provide guidance to BC Hydro, but are not intended to fetter the discretion of the future BCUC panel that will be charged with determining whether the next LTRP is in the public interest:

•         BC Hydro could continue to progress its LTRP based on the 2024 load forecast, while clearly describing the key updates and directional changes that may have happened since its development, during its consultation activities and in the final LTRP;

•         If deemed necessary, further load forecast modelling could be undertaken in parallel with BC Hydro’s consultation activities, and reflected in the final submission to the BCUC;

•         BC Hydro could adjust the timeline, scope or need for its planned second phase of consultation activities;

•         In the Signposts Update, BC Hydro emphasized ranges rather than static targets,[12] which was supported by the BCUC in the 2021 IRP Decision. Such an approach, combined with load scenarios which illustrate a range of potential future customer demand, can mitigate the need to precisely plan towards any single load forecast;

•         Uncertainty associated with the load forecasts can be addressed with near-term actions that reflect BC Hydro’s judgement of how to best address that uncertainty, for instance, by selecting resource actions that are flexible enough to be adjusted if BC Hydro’s signposts monitoring indicates circumstances have changed. BC Hydro could provide analysis in its LTRP filing to show the robustness of its planned demand and supply side resources under different load conditions; and

•         BC Hydro can seek the informal guidance of BCUC staff as the development of the LTRP progresses.

 

In summary, the Panel does not wish for perfect to be the enemy of the good in the preparation of BC Hydro’s next LTRP. By building upon some of the key themes established in the 2021 IRP proceeding and the work already undertaken to develop the next plan, the Panel believes that BC Hydro can produce an acceptable LTRP within the original timeframe.

 

 

Dated at the City of Vancouver, in the Province of British Columbia, this   6th   day of March 2025.

 

 

Electronically signed by Mark Jaccard

_________________________________

M. Jaccard

Commissioner