Electricity talks between B.C. and Alberta broke down before pipeline spat

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Talks between B.C. and Alberta on expanded trade of electricity broke down last year – well before B.C.'s latest move on Trans Mountain.

Alberta Premier Rachel Notley walked away from sales negotiations with British Columbia last week, saying it was in retaliation over new delays to the construction of Kinder Morgan Canada Ltd.'s Trans Mountain pipeline.

But B.C.'s electricity sales to Alberta had already slowed to a trickle and B.C. Energy Minister Michelle Mungall said Monday talks between the two provinces on expanded trade of electricity have being going nowhere fast.

"I wouldn't say Alberta was enthusiastic at any point in time about buying B.C. power," Ms. Mungall said in an interview Monday.

Ms. Notley told reporters last week that a deal would have "easily" sent $200-million per year to BC Hydro, with the potential to climb as high as $500-million per year.

In fact, Alberta currently buys electricity from BC Hydro – more than $1-billion worth over the past decade – through an aging transmission system. But those exports have been declining since 2011, and last year totalled less than $14-million.

The B.C. government has proposed for years that Alberta could buy more power if the transmission system was upgraded.

Ms. Mungall said she was surprised at Alberta's estimates. "When she cited $500-million, I will admit I was perplexed by her numbers." She said B.C.'s demand for electricity is expected to soar as the province seeks to reduce its greenhouse gas emissions, and she doesn't expect huge surpluses to be available for sale.

B.C. announced last week it intends to prohibit increased shipments of diluted bitumen until a newly appointed advisory panel reports on whether the extra-thick crude can be effectively cleaned up after a spill in water – which prompted the retaliation from Alberta.

But the electricity talks had fallen apart before B.C.'s latest move. The power "discussions stalled last year when we made it clear to B.C. that we would not be interested in" purchasing additional electricity on the existing system "unless we were able to grow our economy with new pipeline access," Cheryl Oates, a spokeswoman for Ms. Notley, said in an e-mail. "What the Premier announced last week was that we've formally ended those discussions."

In fact, Ms. Notley has long maintained that her preference was for power generated within her own province's borders.

"We in Alberta want to be the owners of our power," she told The Globe and Mail two years ago. "Our plan, going forward, is to build a system that ensures that we in Alberta are generating enough power for the needs of Alberta."

Nonetheless, talks between the two provinces began in 2016 about a deal to increase the capacity for trade, as part of Alberta's commitment to phase out coal-fired power generation. Those talks were initially framed as a tit-for-tat exchange tied to B.C.'s support for an oil pipeline to expand Alberta's access to Pacific ports. The former B.C. Liberal government agreed to support the expansion of the Kinder Morgan oil pipeline to the coast, but the new minority NDP government in B.C. has promised to use any tools it can to stop the project.

In a letter dated Feb. 1 to B.C. Premier John Horgan, Ms. Notley said her province is suspending "future discussions with respect to energy trade" including the potential for a new transmission line between the two provinces. "Your government's proposed approach on this matter seriously impedes Canada's economic growth."

Existing power agreements between the provinces will not change. Alberta, Ms. Notley said, is threatening future deals because the government wants to use strategies that could dent B.C. without hurting Alberta. "We are … very much looking at things that impact B.C. without impacting Albertans," she said. Further, she doesn't expect power prices to rise in her province.