Rising cost of diesel moving Hartley Bay to electricity

The residents of Hartley Bay are moving forward with plans to give up diesel as the main energy source for the village and head towards electricity generated from lakes behind the village.

The Daily News examined the change in direction and the funding for the project that could make diesel the thing of past in the area.

Village has powerful reasons to build plant
By Leanne Ritchie
The Daily News
Friday, June 15, 2007

Hartley Bay has received an almost half million dollar boost in their efforts to move away from using diesel fuel to power their community.

Last month, the province announced the Gitga'at Development Corporation will receive funding of $488,000 to support development of the new Hartley Bay hydroelectric project.

Bob Hill, chief council of the Hartley Bay Band Council, said the multi-million project has been under investigation for years but the ever increasing cost of diesel fuel is really encouraging them to move forward.

"We have done all kinds of hydro studies and found in the last few years it is become more and more evident we have to enter in to another form of energy for the community because of the increased cost of diesel fuel," said Hill. "The timing is right."

The project would see a 900-kilowatt micro hydro generating system developed on the lakes in behind the remote First Nations community, replacing the three diesel generators that are currently used to provide electricity.

"We are at the stage now were we have purchased the drawings and are looking at two turbines," said Hill. "The whole of the system does not require any kind of dams to be set up. We are using the natural gravity of the water coming in and releasing itself from the upper lake and lower lake and into the river whereby we set up a series of penstocks to redirect the water flow."

Over time, the project will pay for itself and allow the community to reduce its environmental footprint.

Getting electricity in remote North Coast communities, specifically those not connected to the provincial transmission grid, has always been a challenge.

Hill remembers many years ago when the community first looked at replacing coal oil lamps with small amounts of electricity.

"The village got together and formed a committee called the lighting committee and went on a fundraising initiative and managed to gather enough money for a small community to buy a one-cylinder engine. One single light bulb per household was all the energy it was supposed to produce," said Hill.

"I can remember the engineers cranking that thing up. It was interesting how we've gone from that to a hydro station which is unheard of and we can start producing our own energy."

While the community is making other steps, such as exploring new and more efficient ways to heat their homes, Hill said they have a long-term vision of setting up their own utilities company and developing other forms of electricity such as tidal and wind power.

Money generated from the sale of electricity could then be put into economic development and used to create much needed employment for Hartley Bay residents.

Other energy upgrades for coastal communities include plans by the community of Klemtu to upgrade its existing run-of-river hydro-power plant. Klemtu has also built new, local housing to be more energy efficient in collaboration with the province, federal government and the Kitasoo-Xaixais First Nations. The province is contributing more than $440,000 for increased hydroelectric capacity and new homes built to EnerGuide 80 standards.

2006 sees less revenue for PNG

You might find it hard to believe as the natural gas bills arrive in the mailboxes of Podunk this week, but 2006 saw the Northwest gas provider make less money than in years past.

This despite rate increases to local homeowners and colder temperatures; perhaps we’ve all put on an extra sweater.

Obviously there’s quite a bit more involved in the gas business and on Monday The Daily News examined the varying factors involved in the bottom line at PNG.

COLDER WEATHER FAILS TO TRANSLATE FOR PNG
By Leanne Ritchie
The Daily News
Monday, February 26, 2007
Pages one and three

It may have been colder in 2006 than it was in 2005, but natural gas customers aren’t jacking up the heat, according to a quarterly report from Pacific Northern Gas (PNG).

The company, the sole supplier of natural gas in the Northwest, announced its fourth-quarter results last week.

According to PNG, overall gas deliveries in 2006 were up by one per cent compared to 2005.

“Increased deliveries in the commercial sector were offset by decreased deliveries in the residential sector,” said the company, in a press release.

“Weather in 2006 was four per cent colder than in 2005, accounting for a portion of increased deliveries to the commercial sector, however residential usage declined due to a small net loss of residential customers as well as strong conservation efforts the company believes are due to higher delivered gas prices for its Western system.”

Pacific Northern Gas also made less money in 2006 than it did in 2005, operating revenues decreased from $160 million in 2005 to $138.8 million in 2006.

This was largely due to the fact that company only bought as much gas as was needed for its current customers and didn’t sell gas back in to the market through off-system gas sales.

PNG does not mark up the cost of gas to its customers on its transmission system, but rather makes its money from fees it charges for transportation.

In 2005, the company brought more gas than the customers on its system needed, and made additional money by reselling that gas back into the volatile natural gas market.

However in 2006, the company made $23.4 million less because it didn’t buy as much excess gas.

In the meantime, the amount the company made for transporting gas to homes and businesses was reduced by $9.7 million in 2006 in comparison to 2005 because of the closure of Methanex in Kitimat.

However, the company did receive a contract termination payment from Methanex in February 2006 for $5.6 million.

PNG rates have gone up significantly since the Methanex closure, more than 15 per cent, outside any fluctuation in natural gas prices.

And last week, the provincial Minister of Energy and Mines announced customers for both B. C. Hydro and PNG can expect to see another increase on their utility bills are part of the provincial government’s green plan.

Energy Minister Richard Neufeld confirmed that the B. C. government plans to slap a surcharge on all public utilities to build its “Innovative Clean Energy Fund,” promised as part of an ambitious plan to cut greenhouse gases laid out in last week’s Throne Speech.

“I can tell you it would be less than on per cent… on domestic consumer utility bills, “ Neufeld said in an interview, noting it will likely require approval from the B. C. Utilities Commission.

Neufeld said the move will affect electricity producers BC Hydro and Fortis as well as natural gas producers including Terasen Gas and Pacific Northern Gas.

He said his ministry is talking to all these utilities about “how we can move this forward to get enough from their revenue to cover the $25 million a year.”

In the Feb. 13 Throne Speech, the government promised to cut current levels of greenhouse gas emissions in British Columbia by one third by 2020. It also promised to establish the new Innovative Clean Energy Fund to “encourage the commercialization of alternative energy solutions and new solutions for clean remote energy.”

The news that a utility surcharge would be used to build the fund came as a revelation as B. C. Finance Minister Carole Taylor met reporters before delivering her new provincial budget Tuesday.

“The fund was mentioned in the Throne Speech, it will be funded, it will be in the energy plan when it is released,” said Taylor. “And the minister is currently looking at the notion of a small surcharge on all public utilities.”

Opposition NDP energy critic John Horgan said it is a stretch to announce a fund in the Throne Speech that people would assume was a government initiative, only to find it will be paid for by consumers.

“There’s not a thing wrong with having a fund for innovative, clean energy now and into the future,” he said. “But if you are going to make it a user fee, then call it a user fee,” he demanded.

With files from CP