Changing Utility Environment Creates New Challenges

By John Sheehan, President, B.C. Hydro Ltd.
The changing electric utility environment creates new challenges for B.C.Hydro in ourcommitment to superior customer service. During the past year we made some basic organizationalchanges that will enable us to be even more effective in serving the needs of British Columbia.

B.C.Hydro has reorganized around the three distinct segments into which the electric utility industry isseparating: power supply , transmission and distribution, and customer service. We also reducedthe number of positions by 15 per cent.

The reorganization has made us more flexible and better ableto react quickly to changes. It has also given us more focus on accountability and improved ourability to track the costs of our various types of service.

In effect Hydro can now move toward amore finely-tuned rate structure where the prices our customers pay will more accurately reflect theirparticular requirements. Our goal is to unbundle and differentiate our products and services andfollow through with unbundling of rates.

B.C. Hydro has already filed a Wholesale TransmissionService application with the B.C. Utilities Commission (BCUC), which would open up ourtransmission system to other users. We have also embarked on consultation with our industrialcustomers, to develop new options such as, Real Time Pricing, Standby, Curtailable and Time-of-Userate choices.

Development of a major new facility is unlikely, instead we are looking at options thatcan be obtained in smaller increments, and that offer more flexibility. These options include:

PowerSmart, our internal energy conservation program, which has cumulative annual savings of 1.85 millionkilowatt-hours. Power Smart is reviewing rate design options which will shift users from high loadto low load.
Resource Smart which maximizes production from existing facilities. Three majorResource Smart projects were announced this year: replacement of Stave Falls Generating Station; andupgrades to both Seven Mile and Revelstoke generating stations.
These three projects will add 700megawatts to the system and about $50 million of income to the communities in those regions.
A$174 million upgrade of Burrard Thermal Generating Station is also underway. This project will cutnitrogen oxide emissions by 70 per cent and increase plant availability to 85 per cent.

B.C. Hydro willcontinue to act as a catalyst for job creation and economic stimulus in the province. In fiscal 1995,our net income was $162 million, and we paid out $600 million to the province in water rentals, taxesand a dividend to the provincial government.

A ten-year agreement signed with GE Canada to replaceand supply new turbines includes an industrial benefits package worth an estimated $150 million toB.C., and will create an estimated 1800 million person-years of employment

B.C.HydroInternational has intensified marketing our expertise intentionally. BCHIL now has close to a billiondollars worth of new business in the developing countries of Asia and South America, either undernegotiation or already in progress. B.C. Hydro and our subsidiary Powerex have both joined twoRegional Transmission Groups. This places us in a position to take increasing advantage to sell inU.S. markets.