What appears to have been a major math error may undermine a BC Hydro plan to devalue “homemade” solar energy in its new rate design, according to local renewable energy advocates, who say the utility’s arguments in favour of lowering the credit customers receive for energy sent back to the grid have fallen apart under scrutiny.
Salt Spring’s Kjell Liem, representing the Community Solar Coalition (CSC), has been taking part in the BC Utility Commission’s public hearing on the electric utility’s proposed Net Metering Rate Design — an electricity billing switch that renewable energy advocates say would drastically reduce the amount of new solar installations in B.C.
A grassroots alliance that grew out of the 2016 Community Solar Summit on Salt Spring, the CSC and Liem acting as interveners told commission regulators that BC Hydro’s initial numerical model failed to fully account for several positive solar impacts — including reduced strain on the local electrical grid, lower transmission line losses and the conservation of hydroelectric reservoir capacity during sunny periods.
What’s more, BC Hydro’s proposal may have double- or triple-counted the benefits to non-solar customers in switching from an equal kilowatt-hour credit to the fixed 10-cent scheme.
The utility had argued early on that an increasing level of participation in what was initially a “small and relatively niche” program threatened to burden anyone not producing their own solar energy with higher prices — a so-called “cost-shifting” theory that posits solar customers avoid paying their “fair share” of fixed grid maintenance costs through buying less electricity.
“Which is so strange,” said Liem. “If you’re going to say that’s a cost to the utility, it’s like saying to a gardener, ‘why don’t you buy tomatoes in September, because you’re costing my grocery store money?’”
In its December submission, BC Hydro told regulators it was indeed “the precise issue” of cost-shifting that had led it to seek an update to the net metering service “so that its continued growth is sustainable and fair for all.”
Over Christmas, Liem said, CSC dug into the report’s tables and found what he called “weird numbers,” showing that cost-shifting was a far smaller number than even they’d imagined.
“So they’d overstated it by almost three times,” said Liem. “And that wasn’t even caught until after a whole year of bickering and discussing this ‘horrible cost shift.’ We wrote that up and put it in our final argument.”
After revising the data, BC Hydro acknowledged that the actual savings delivered by the policy change would be significantly smaller than initially reported. By Jan. 28, after the math had been corrected, the utility wrote in its reply argument that it had been third-party consultants — not BC Hydro — who suggested the inclusion of an analysis of cost-shifting, and that net billing would simply “align the value customers received for net generation with the value of that energy to the BC Hydro system.”
Regardless, if the devaluation of “homemade” electricity is approved, Liem said the impact on solar adoption would be severe. An updated industry analysis indicates the proposed rate change could reduce new solar installations in B.C. by roughly 25 per cent without any other factors. Liem said at issue was whether British Columbians — and solar energy producers on Salt Spring Island — could continue to produce clean power and be treated fairly for providing that value.
The corrected projections on benefits, as well as counter arguments and a “final word” from BC Hydro, are all in front of regulators, who are expected to make a decision on the proposed structure within weeks.
Liem said no matter the outcome, he hoped the process would at least help islanders recognize there was a path forward to increasing energy resiliency — if not outright independence.
“We understand that sort of thing for food really well on Salt Spring,” said Liem. “I mean, we live on an island and we get it. But we can also make energy here, and store energy here. That’s what we’re about.”