VICTORIA – The rates for liquefied natural gas (LNG) proponents to connect to BC Hydro’s electrical grid have been set, providing certainty for industry to plan power costs and work toward final investment decisions while ensuring that existing ratepayers do not pay for the costs of infrastructure and new energy supplies required to serve LNG customers. The combined energy and demand charge for LNG facilities in 2014will be $83.02 per megawatt hour (MWh), before applicable taxes.By comparison, the average rate paid in 2014 by other industrial customers in the province is $54.34/MWh (before taxes).
This rate ensures that LNG customers will cover the full cost of new energy required to serve their power needs. LNG customers will also be required to contribute the full cost of connecting to the BC Hydro system, as well as transmission system upgrades required to serve their facilities. Earlier today, the Province and BC Hydro completed a power agreement with LNG Canada. As part of that agreement, LNG Canada will fund the cost of new infrastructure to be built by BC Hydro.
In addition, last month, Fortis broke ground on an expansion of its Tilbury LNG facility, which will also connect to BC Hydro’s grid and use electricity for both LNG compression and ancillary needs. BC Hydro’s Integrated Resource Plan indicates that B.C. will need new energy by 2024, assuming an initial LNG load of 3,000 gigawatt hours per year. The LNG Canada agreement and the Tilbury LNG expansion would account for the vast majority of this expected load. Additional LNG demand, in excess of 3,000 gigawatt hours would further
accelerate and increase B.C.’s need for new power.