VICTORIA — Energy Minister Josie Osborne wrote a confidential memo to herself this week suggesting that B.C. Hydro offer a rebate on electricity bills to offset the pain of the carbon tax.
She also wondered to herself whether Hydro could attempt what sounded like a $1-billion shakedown of Fortescue, a company that proposes to build a green hydrogen-manufacturing plant in Prince George.
The memo was not intended for public consumption. Osborne was just talking to herself, albeit in writing. She emailed the note to herself at 7:13 a.m. Wednesday, printed out a copy and got on with her day.
Then, on Thursday morning, she had to endure the mortifying experience of hearing her own words read back to her during question period in the legislature.
At some point during the previous 24 hours, she dropped the printout of her memo.
“These things happen,” Osborne confessed to reporters.
The memo somehow fell into the hands of B.C. United, which made political hay of the embarrassing contents.
“If PDE (that’s Premier David Eby to you) is looking for a big and shiny affordability measure for budget (2024), we should push them to look into option of returning a portion of incremental carbon tax back to the people in their monthly B.C. Hydro bills,” the memo said.
“We could give people ‘CleanBC rebates’ that show up on their Hydro bills.”
Or: “We could announce that we are going to use carbon tax revenues to FREEZE B.C. Hydro rates for people.”
This tells you that the New Democrats are worried about the growing backlash over the carbon tax, much as they insist they alone will defend the tax against B.C. United and the B.C. Conservatives.
Rather than cutting the tax or postponing the next scheduled increase, the government is more likely to order B.C. Hydro to provide the relief.
The New Democrats will then order the “independent” B.C. Utilities Commission to approve the rebate and/or rate freeze.
A second embarrassment emerged from Osborne’s musings on how to deal with the growing demands on B.C. Hydro’s generating capacity.
Even with Site C scheduled to come on stream in 2025 — and a proposed call for independent power in the spring — Hydro will struggle to meet all the calls for electrification of the existing economy and to power myriad proposals for new industry.
“I worry that B.C. Hydro is trying to dump their problem onto us,” the memo said. “Then we’ll have like 10 proponents knocking on our door lobbying us.”
The newbie energy minister (she was appointed a year ago) thus discovered what any of her predecessors could have told her: B.C. Hydro is inclined to operate as an empire unto itself.
Osborne continued the dialogue with herself: “Right now we have no framework to adjudicate between projects fairly and we don’t have ministry capacity to engage with each of them.”
But neither could the ministry just deny the applications: “We know that Premier David Eby won’t want to say no to anybody!” Leastways, not with an election less than a year away.
One possibility that suggested itself involved the existing Hydro tariff that requires major new industrial projects — those needing at least 250 megawatts — “to pay for the incremental costs of new transmission and generation required to supply them.”
Alas, as Osborne went on to reminder herself, the cost of meeting that requirement, “would make most projects uneconomic to proceed.”
Not something that she would want to communicate to an electioneering Eby. (“Help premier to understand the scale,” Osborne added in a handwritten aside.)
Hence her solution: “Maybe we could pass a cabinet order to 1) provide clarity on how the requirement would be applied and 2) give the government the authority to waive or reduce these costs if projects agree to certain conditions.”
“This would give us some leverage with companies like Fortescue,” wrote Osborne. She referred to a $3 billion green hydrogen plant in Prince George that needs 1,000 megawatts of power to proceed.
Or as Osborne put it with more candour than one is used to hearing from cabinet ministers: “You’ll either pay B.C. Hydro $1 billion under the existing tariff OR agree to scale down the size of your project, prioritize hydrogen for domestic supply and build some of your own wind turbines to power the project.”
In another handwritten note to herself, Osborne suggested that the government could use the tariff “as a stick” to bargain with Fortescue. Careful minister — news reports indicate Fortescue is considering investments elsewhere in Canada and in the U.S. and the U.K.
So, to recap, the New Democrats would offer the electorate a Hydro rebate to placate public anger over the carbon tax. They would also play hardball with a would-be investor to the tune of $1 billion.
Osborne tried to make light of the memo when talking to reporters. The contents came from an adviser, who she declined to name and merely represented ideas that were circulating inside government.
Never mind. Her memo spoke for itself — and showed what New Democrats say when they think no one is listening.