BC Hydro says mine would not get cut rate
BC Hydro says residential ratepayers in Kamloops don’t have to worry that they will be subsidizing the cost of power at the Ajax mine — if it is approved.
The Kamloops Area Preservation Association (KAPA) raised the question this week in a post on stopajaxmine.ca.
Their issue is a portion of the Ajax mine’s feasibility study that suggests the proponent would pay 3.5 cents per kilowatt hour (kWh) for its power, compared to the residential stepped rate of 6.8 cents and 10.19 cents for the same.
“Our concern is the fact that they are paying less for the power than it costs to produce that power,” said John Schleiermacher, spokesperson for KAPA.
“You and I pay over 10 cents per kWH. They’re paying 3.5 cents.”
But, BC Hydro spokesman Dag Sharman said the 3.5-cent figure isn’t an accurate reflection of what the mine would have to pay for power.
Under the electric tariff, which sets out the utility’s rate schedules and terms and conditions for power distribution, a new, large mine would likely pay an energy charge of 3.6 cents per kWh under current rates, Sharman said.
However, the mine would also pay a number of other fees set out in the tariff each billing period, including a demand charge and a rate rider.
“The energy charge is only one component of the cost of electricity supply and not an indication of the amount paid, as there are a number of factors that go into determining the industrial customer’s bill,” he said.
Sharman said the tariff is set up so each class of customer is paying BC Hydro enough to cover the cost of the power being created and used — and no class subsidizes another’s power consumption.
“It’s to recover the cost of their power,” he said.
Sharman said BC Hydro is working on an interconnection study in relation to the mine.
The mine’s proponents would also have to complete a number of other studies to hook up to the utility’s transmission system, which would identify what upgrades would be needed to supply it power and how much those would cost.
Ajax would also have to provide security or make a capital contribution toward any upgrade costs.
Mine proponents would also cover the cost of tapping into the BC Hydro system, building a substation to step down the voltage so it’s useable for the mine, and building a distribution system to deliver power on site, as well as operational costs.