BC Hydro ignoring green energy for decades

Located in the historic mining town of Sandon, the Silversmith generating station is a marvel of engineering, brought online in 1897 – far predating BC Hydro.

Silversmith Power and Light owner Hal Wright has a lifelong history with the station and says they’ve been severely crippled by BC Hydro and their subsidiary, Powerex, which sells excess power from the BC grid to Alberta and the United States.

“I think the fundamental problem right now is that we have a government that does not want there to be anybody else here, they want it all for themselves and they’re looking at it as a cash cow, no different from the previous government,” said Wright.

Wright’s original power contract was made with the BC Liberal government, and Wright noted that while the previous government may have disagreed with his criticisms and commentary, the door was at least open for conversation.

“The graphic difference to me is that I could talk to the previous government, I never had a problem,” said Wright, who’s been met with silence by the NDP.

“As soon they were elected, they slammed the doors and we have never to this day been able to have a meeting with the Ministry of Energy,” he added.

The station was green certified in 1999, and one of the first in the province to do so, said Wright, an achievement he’s very proud of. He apprenticed as a youth mechanic at the station, became its manager in the 1980s, before he and family finally purchased Silversmith in 1996.

Following the purchase, $3 million dollars over twenty years was invested by Wright and his family through a bank loan to replace the pipe which drops water 186 metres down a mountain side into Silversmith, in addition to other repairs and maintenance.

The water to feed the plant is also not free, added Wright, who’s on the hook for a $20,000 bill, due to the province charging a water rental fee to producers – another expense BC Hydro isn’t subject to.

“I’ve been trying to fight this business of water rentals and the unfairness of that, because it’s a tax – no matter how you look at,” said Wright.

The station could supply 440 homes with power year-round, but its full capacity isn’t being used due to BC Hydro’s poor treatment of independent power producers – Powerex buys less than one quarter of what Silversmith could produce.

While a handful of buildings in New Denver and Nakusp are supplemented by Silversmith, the station can only afford to run at 60 percent of its capacity due to the low rates offered through Powerex, well below what’s financially sustainable.

“If we were to produce our full capacity, which we never do, because the way our prices system works, we’re getting paid less than what it costs to produce it,” said Wright. “The more we produce, the more we lose. We would just drive ourselves into bankruptcy.”

Wright is also confidentially bound by his contract with Powerex to not speak about his precise compensation and can only talk around what rate he’s paid, a secrecy he never wanted, nor agrees with.

Wright said he’s been compensated less than $20 per megawatt hour for Silversmith’s power since the early 2000s, a rate which will eventually force the station to close.

However, closing the station is not as simple as flipping a switch – they would be required by law to hold formal hearings and apply for abandonment, all while Wright and his family continue to bleed financially.

Ultimately, the value of BC Hydro’s grid has never lived up to the sales pitch, said Wright.

“Basically, the bill of goods was that the grid was going to bring prosperity and convenience and all these things to these communities – it didn’t pan out that way,” he said. “It’s a dream. The grid comes into these communities and it’s an economic drain on them because the energy is coming from somewhere else.”

Those energy sources include coal and gas power, essentially negating or muddying any green power being fed into the grid. The power is sold off the backs of independent power producers for far more, at an exported average of $87 per megawatt hour.

As the arm of a crown corporation, Wright feels all Powerex’s business dealings should be publicly available. He also feels BC needs legislation to fairly regulate the industry, perhaps closer to New Zealand’s, which forbids producers from being distributors, and vice versa, which would prevent monopolies like BC Hydro.

“You can be a distributor or a producer – you can’t be both. Because there’s an inherent conflict of interest in controlling both sides of the industry,” said Wright.

Nelson is one of the few places in the Kootenays that didn’t cave under BC Hydro’s political weight, Wright added, with the city independently operating the 16-megawatt Bonnington Falls Generating Station.

“They own their own generation, and they are the only municipality that didn’t give in,” said Wright, noting BC Hydro attempted to undercut them by accessing water above the falls by diverting water to the Kootenay Canal Generating Station, built in 1976.

“It’s not surprising that Nelson is such a well to do community. That’s a huge thing about money staying in their local economy rather than being siphoned out,” Wright said.

Now in his 60s and ready to retire, Wright says his heart isn’t in it like it used to be – his original dream was to see further stations installed in the Kootenays, providing power to local communities and the provincial grid.

“This is not the day and age where we should be enslaved by doing this. It’s a good service, it’s a good operation, I should at least be able to make a reasonable wage,” said Wright, who’s calculated that he only makes $1.37 an hour staying open.

Nakusp Mayor Tom Zeleznik says Wright has presented to the village council many times, and is sympathetic to his plight, noting the community is interested in advocating for green energy.

“It’s very frustrating to me, and I totally understand where Hal Wright at Silversmith is coming from, it’s not right,” said Zelenik.

With one BC Hydro line feeding into Nakusp, residents have no real choice in their power producer. A local mill is just one business affected by the limitation, said Zeleznik, with the owners forced to eat the cost.

“I think we have to start looking at green energy and many communities have a great opportunity to expand their green energy and I know that BC Hydro is doing a call out, and we’re going to UBCM, this is one item that we’d like to see in Nakusp,” said Zelenik.

Announced on June 15, the province says they’re committed to finding new sources of energy to make up shortfalls in BC and will seek out independent power producers starting in spring 2024 – a previous independent power producer program was suspended in 2019.

The province is seeking enough power to run 270,000 homes starting as early as 2028. Premier David Eby said the need for 3,000 gigawatt hours per year of renewable energy comes three years earlier than expected.

“This is a new process, a competitive process that will work with independent power producers to deliver the power that we actually need and that is cost competitive,” said Eby.

In addition, the province has promised $140 million for a BC Indigenous Clean Energy Initiative, which will support smaller indigenous-led power projects, who don’t have the capital to compete.
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Tom Summer, Local Journalism Initiative Reporter, ALASKA HIGHWAY NEWS