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BC Industrial Companies Waste Electricity for Lower Rates

power lineDocuments indicate that some of BC Hydro’s largest industrial customers in British Columbia are wasting electricity in order to lock in lower rates, according to the Vancouver Sun. Yet at the same time the utility is helping customers save electricity through its Power Smart programs that provide energy efficiency incentives.

Reports submitted to the provincial government by the British Columbia Utilities Commission show that some of BC Hydro’s customers are wasting electricity, including running idle equipment and leaving lights on so they can get cheaper power, which is being blamed on a two-tier rate system established in 2006, reports the Vancouver Sun.

According to interviews with BC Hydro’s 34 large customers, they were concerned because a decline in their average annual electricity consumption triggers a reduction in the amount of power they can buy at “base load” rates the following year, which means all power above the base load is priced at a premium rate, reports the Vancouver Sun.

Many of BC Hydro’s customers experienced a drop in consumption when the economic downturn hit in October 2008, according to the article.

The two-tier rate is supposed to push industrial customers — including forestry, mining and shipping — to invest in energy-efficient technology so they can reduce the amount of power they must buy at the higher, second-tier rate, reports the Vancouver Sun.

In some cases, it worked. Many customers also reported that the new rate has justified the implementation of energy conservation projects, reports the Vancouver Sun. The utilities commission recommends that Hydro make some refinements to the rate program, but says industries generally support the basic principles of the program, according to the article.

To help drive energy efficiency at businesses, a new BC company, Greenscape Capital, is basing its business model on helping businesses cut their energy bills, so if their customers don’t profit, it doesn’t either, reports BC Hydro.

To overcome the up-front cost of efficiency upgrades, which is typically why companies have been slow to embrace energy-efficient retrofits, Greenscape will provide full service energy retrofits including financing, reports BC Hydro.

Since Greenscape is financing the retrofit, most of its revenue model is based on sharing in the energy savings over time, according to Bryan Slusarchuk, CEO of Greenscape Capital, reports BC Hydro.

According to a 2009 report from McKinsey & Company, the United States can save more than $1.2 trillion in energy costs, with an investment of $520 billion through 2020.

The 2007 Conservation Potential Review study produced for BC Hydro indicated that more than 10,000 GWh/year of electricity could be saved annually through conservation, which is why BC Hydro offers a wide variety of Power Smart programs that provide energy efficiency incentives to all of its customers, according to the article.

As an example, Sevenoaks Shopping Centre is saving $12,000 annually in electricity and labor costs through decorative lighting upgrades.

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