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The trickle-down effect

How local creeks are feeding into the global economy

"Whistler is a kind of microcosm of the world at large. The forces and trends that play themselves out across the country and around the globe tend to play themselves out right here in our own backyard." — local author Stephen Vogler musing on the effects of globalization in an essay from his book, Whistler Features

The same elements that attract millions of skiers to the Whistler area – abundant amounts of precipitation, big mountains and gravity – also play a large role in what could be the valley’s next big industry.

Hydroelectric power, created when water is teased through turbines by the pull of gravity, is creating the latest buzz, although it is nothing new.

The region’s hydroelectric industry started in 1957 when a dam was built on the Cheakamus River between Whistler and Squamish.

Electricity is a good thing. It powers things like chairlifts, stereos lights and heating systems. In fact, electricity from the Cheakamus Dam is probably powering my computer right now as I write this story.

But along with the good comes the bad. There is no black or white here, just grey – kind of like Whistler’s omnipresent clouds.

The B.C. Hydro dam prevents salmon – an important symbol of the West Coast identity – from making their way upriver towards gravel-covered spawning grounds, while the Daisy Lake Reservoir has flooded prime wildlife habitat and trees on the valley bottom.

This scene was repeated many times across B.C. in the 1950s and ’60s as B.C. Hydro built dams to meet the electricity demands of a growing province.

However, we’ll never know the real costs, not just to fish, wildlife and their habitat, but to ourselves and our sense of place.

B.C. Hydro, a provincially owned Crown corporation, is now getting out of the dam-building business. According to its Integrated Electricity Plan, the utility currently generates enough power to meet expected growth until at least 2007.

As part of the plan, B.C. Hydro forecasts an 18 per cent increase in demand over the next 10 years and is looking at various ways to meet its long-term needs.

According to the IEP, B.C. Hydro is committed to meeting 10 per cent of its load growth through "green" energy options, such as small-scale hydroelectric projects and wood waste co-generation.

That’s where run-of-river hydroelectric projects like the ones proposed for Miller and Rutherford creeks near Pemberton and the Mamquam River and Ashlu Creek near Squamish come into the story.

According to the Ministry of Environment’s water management branch, there’s a definite interest in developing this area’s hydroelectric potential.

(Interestingly enough, the new Liberal government has split the environment ministry into the seemingly contradictory ministries of sustainable resource management and water, land and air protection.)

There are a total of 57 projects proposed on 42 different waterways in the Sea-to-Sky region, from Howe Sound and the Squamish River system to the Lillooet River watershed. The bulk of these projects will be planned, developed and operated by private companies, not the provincially owned B.C. Hydro.

After inking a deal to sell its power to B.C. Hydro for the next 20 years, the Vancouver-based Miller Creek Power Ltd. sold its project to Edmonton’s EPCOR Power Development Corp. (Miller Creek Power Ltd. is now called Rutherford Creek Power Ltd. to reflect the new project the company is working on.)

"We’re in the business of planning and developing hydroelectric projects," RCPL spokesperson Nick Andrews told Pique Newsmagazine. "EPCOR is in the business of building and operating them."

Although still in the early stages, Andrews has hinted that the Rutherford Creek project could follow the same process of reaching a power sales agreement with B.C. Hydro and then selling the whole package to EPCOR.

The Mamquam and Ashlu projects are being developed by another Alberta company, the Calgary-based Canadian Hydro Developers Inc.

Why is this significant? Well, because – as Vogler puts it – the Sea-to-Sky region is not insulated from global forces or trends.

Provincial governments in both Alberta and Ontario have deregulated their electricity utilities over the past 1 1/2 years. The privately held EPCOR used to be the publicly owned Edmonton Power.

Deregulation has also happened in a number of American states, most notably California. More about the U.S. experience later.

The rationale behind the complex deregulation issue goes like this: Electricity regulations, like those in B.C., are put into place to ensure customers have access to a safe, reliable supply of power at a reasonable price.

The swing towards deregulation, such as what has happened in Alberta, Ontario and the U.S., has been created by regional price disparities, the perception that competition means lower prices and the (some would say somewhat) successful deregulation of the airline, natural gas and telecommunications industries.

Technological advancements in generation hardware also mean smaller companies can now compete with larger ones, creating an economic argument for breaking up monopolies. All of these arguments do hold some water.

But in B.C., there has been less pressure to move towards deregulation due to low electricity prices.

B.C. Hydro rates have been frozen since 1993 and will continue to be that way until September 2001. Residential rates, by comparison, are lower here than in Calgary, Toronto, Seattle or Los Angeles.

OK, so what happened in the U.S.? Californians gobble up energy quicker than tourists schralping Peak Chair powder after a 30-centimetre dump. This insatiable appetite for consumption is causing a well-publicized energy shortage, complete with a new language that includes such words as "brown-outs" and "Californication."

Energy demands in the Golden State are greater than what they can generate, due to a large population, a booming economy and the increased use of appliances such as TVs, year-round Christmas lights and, of course, air conditioners.

With increased demand, but no increase in supply, prices have skyrocketed. Kind of like the housing situation in Whistler.

Also, California energy regulations restrict power retailers – both utilities and private power companies – from passing these increases on to their customers who, more often than not, refuse to reduce their consumption, which amplifies the problem. It’s Californication.

Some Kootenay residents, a region of B.C. that was affected by dams built in the 1960s under the Canadian-U.S. Columbia River Treaty, consider it karma coming back to haunt the Americans.

Before being ousted from Victoria last month, the NDP government, in its Green Economy plan, also promised to increase efficiency and power production by adding new generating plants on existing B.C. Hydro dams, such as those near Castlegar and Revelstoke.

Meanwhile, B.C. Hydro generated record profits this year – more than $1 billion – by selling its surplus power to California on the open market.

The provincial utility made so much money that it gave all its residential customers in B.C. a $200 credit on their electricity bills, adding up to a grand total of $305 million.

But, once again, along with the good comes the bad. Privately owned companies such as Cominco Ltd. and Alcan Aluminum Ltd., which both consume large amounts of electricity, shut down their respective smelters in Trail and Kitimat in order to sell the power and increase shareholder profits.

Each smelter has about 1,800 employees on their payroll and the companies claim that there will not be any layoffs. Employees have even been told to take extended holidays.

In other words, both Cominco and Alcan are making so much money from selling power that they can afford to pay their employees as if they were working.

Even EPCOR, the new owner of the Miller Creek project near Pemberton, is applying for a licence to export power.

So, what does all this have to do with the Sea-to-Sky region and the development of small-scale hydroelectric projects? Michael Goldberg, a UBC commerce professor who specializes in the provincial economy and globalization, says these types of projects could be the harbinger of deregulation in B.C.’s electricity industry.

"Part of deregulation is opening up the generation side of things," he said in an interview from his office on the Vancouver campus.

Goldberg also noted that, despite the province’s new Liberal government creating a Minister of State for Deregulation, the status quo will most likely remain.

"B.C. Hydro does have a natural monopoly on the generation, distribution and retail aspects of power in the province," he said. "It is hard for a private company to get into the industry because all the transmission lines are owned by B.C. Hydro."

Barry Wilkinson, a B.C. Hydro media relations officer, agrees with Goldberg’s assessment of the province’s electricity industry.

"As independent power producers, they can sell their electricity or assets to anyone, at anytime," he said. "But it is hard to sell to anyone except B.C. Hydro because of the transmission lines."

B.C. Hydro’s transmission lines link the provincial grid to export markets across North America.

Goldberg also mentioned there is more than one positive aspect to letting private companies into B.C.’s electricity game. "They’re good for the environment," he said. "They take the pressure off B.C. Hydro to construct new dams or thermal generation plants."

In this age of globalization and multinational corporations, it is a bit shocking to learn that instead of playing follow the leader, B.C. is humming along on its own path to success and prosperity.

The province is meeting increased electricity needs, not by listening to Americans or building new dams, but by developing intelligent, home-grown solutions.

It doesn’t matter which government is in power in Victoria because Crown corporations, like B.C. Hydro, are owned by the people of the province.

And with a bit of fine-tuning, the turbine will keep on spinning.



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