Interior, northern and rural communities that rely on B.C.’s oil and sector have been left wondering about the future of the industry after government abruptly fired the head of the province’s independent energy regulator and signalled even more major changes are coming to provincial energy law.
Premier David Eby’s cabinet announced last week it had removed BC Utilities Commission chair David Morton, more than a year before his term was set to expire, replacing him with Simon Fraser University energy professor Mark Jaccard.
The commission is an independent watchdog, ruling in the public interest on the ability for BC Hydro, and oil and gas companies, to raise rates and construct new projects.
Morton has helped deliver sharply critical rulings of BC Hydro in recent months, including denying its request to raise electric vehicle charging rates and ordering a third-party investigation into an underground explosion at a Hydro vault that had previously been flagged for safety concerns underneath a busy street in Vancouver’s downtown.
Energy sector surprised by Morton’s expulsion
Did Morton catch the ire of the government in some way, leading to his dismissal?
“Not at all,” Energy Minister Josie Osborne said in an interview.
“The utilities commission is doing the job it has before it, and that independence of it and the work it does is absolutely critical for government’s functioning and for British Columbians to know and have trust in the reliability of the regulator.”
Still, the energy sector was surprised at Morton’s abrupt ouster, because his eight-year tenure in the position had made him one of the longest-serving chairs.
University of BC professor Werner Antweiler, who studies energy policy, called the firing “rather odd,” but noted Jaccard previously held the job of BCUC chair in the mid-1990s and “is someone with significant experience in this role.”
“You’ve got to be a little skeptical of it.”
Tom Shypitka
The Opposition BC United sees something more sinister at play, saying the NDP is politicizing the independent regulator by appointing an outspoken critic of liquefied natural gas to its top position.
“You’ve got to be a little skeptical of it,” said Tom Shypitka, energy critic and MLA for Kootenay East.
“By no means is this any reflection on Mr. Jaccard’s credentials, well revered as a professor and economist who knows his stuff. But you’ve got to wonder, he is after all on the record as an NDP ally and supporter, and we know he’s not a big fan of fossil fuels… the premier is in some ways stacking the deck in his favour for the things he wants pushed, and found the perfect partner in that.”
New commission head previously clashed with BC Hydro
The Opposition cited several entries on Jaccard’s blog, such as a 2013 encouragement to vote BC NDP and criticismsof the previous BC Liberal government’s LNG decisions.
Jaccard, though, showed a willingness to be an aggressive independent decision-maker when the NDP first appointed him as BCUC chair in 1992. Over five years, he transformed the regulator into one of the most progressive in Canada. He also clashed publicly with BC Hydro, attempting to compel it into more detailed planning before ultimately losing a court challenge brought against him by Hydro executives.
Jaccard may yet get to wield those expanded powers.
The government is considering amendments to the Utilities Commission Act, which governs the agency and how it oversees the provincial energy sector.
Climate targets missing from current utilities act
“The act is not currently oriented to meet our climate priorities,” said Osborne. “Part of my task as minister is to help identity that appropriate role for the utilities commission, one that really aligns with our climate plan and affordability objectives.”
“Part of my task as minister is to help identity that appropriate role for the utilities commission.”
Josie Osborne
Missing in the current law is any reference to reducing greenhouse gas emissions and decarbonization, leaving the current commission on uncertain footing if it tries to force pollution-reduction targets to its decisions on natural gas companies like Fortis BC, or even BC Hydro.
Commission overhaul expected
Overhauling the commission would fit in with the Eby government’s energy policies, which are major shifts from the previous John Horgan administration.
Eby has demanded Hydro speed up its electricity generation construction, and consider a new transmission line to the north coast to electrify the largest polluters in the LNG sector.
He’s also ordered a task force review into how Hydro can generate more clean electricity, through wind, solar and geothermal, to meet a rising demand in the province.
And, the Eby administration’s more aggressive climate targets have meant sectoral emission caps for oil and gas, along with potential carbon offsets, which may overlap with BCUC regulatory decisions.
Shyptika said all of this change is worrisome for rural towns in which natural gas extraction remains the primary source of jobs and economic activity. A climate-focused energy policy, combined with new leadership at the energy regulator and planned new oversight legislation could dramatically change the landscape, and with it, jobs, said Shyptika.
Osborne disagrees.
“We know in 30 or 40 years things have really changed and British Columbians understandably have an expectation and need for reliable energy, but also our climate objectives and affordability for energy is really important too,” she said.
“We need to know the utilities commission has the structure and tools it needs.”