On June 15, 2023, the Government of British Columbia announced BC Hydro was proceeding with a call for new sources (the Call to Power) of 100 percent clean, renewable emission-free electricity from large-scale projects, notably including wind and solar. As part of phase two of BC Hydro's engagement process, on January 8, 2024, BC Hydro issued a draft Request for Proposals (RFP). Organizations within the independent power industry, First Nations and stakeholders were invited to provide feedback on the draft RFP, and the resulting draft specimen Electricity Purchase Agreement (EPA).
On April 3, 2024, BC Hydro released the final version of the RFP incorporating feedback from the engagement process. The final RFP reemphasized the First Nations requirements and clarified other aspects as outlined below. This RFP is intended to be the first of many BC Hydro will issue in pursuit of the provincial climate targets.1
The background and the draft development documents of the Call to Power can be accessed here and all RFP documents, including issued Addenda and Reference Information can be accessed here.
The Call to Power is part of BC Hydro's response to the province's growing electricity demand. BC Hydro seeks to acquire approximately 700 GWh of new clean, renewable energy from greenfield facilities prior to fiscal 2029 and 3,000 GWh per year thereafter. The Call to Power is in line with the growing trend of procurement opportunities for renewable energy that we are seeing across Canada, as discussed in our previous blog, Unprecedented Opportunities Ahead for Renewable Developers Across Canada, and is BC Hydro’s first competitive call for power issued in over 15 years.2
Our overview of the draft documents, including the key terms of the draft RFP and the draft EPA, can be accessed here. This update outlines the key changes resulting from the stakeholder engagement process following the issuance of the draft RFP.
The RFP updated the three key dates for proponent’s participation in the RFP:
BC Hydro encourages proponents to register with BC Hydro to receive updates and invitations to informational meetings. Notice to the selected proponents and the execution of the EPAs are anticipated to occur during December 2024.
The RFP clarified the formal evaluation process. BC Hydro will determine the most advantageous proposal through a comprehensive evaluation process outlined in Section 11.0 of the RFP. This process includes: (1) a conformity, completeness and conflict review, (2) an assessment of the eligibility requirements, (3) quantitative evaluation, (4) a risk assessment, (5) a First Nations consultation adequacy assessment, and (6) other additional considerations. Following the evaluation process, BC Hydro will select the preferred proposals to enter into an EPA.
The revisions to the First Nations economic participation stem from BC Hydro’s extensive collaboration with First Nations including the First Nations Energy and Mining Council. The RFP released details of the funding received from Canada Infrastructure Bank (CIB) under its Indigenous Equity Initiative. BC Hydro has confirmed CIB’s intention to support successful proponents of the RFP by providing an optional loan package including: (1) a loan to finance the First Nations equity participation, and (2) an investment tax credit bridge loan. The loans available to First Nations will help finance up to 90 percent of their equity in a successful proponent.3
Further, the RFP has incorporated supplemental terms and obligations to confirm the successful proponent complies with the First Nations equity ownership requirements. The First Nation economic participation model includes:
The First Nations equity ownership must be held by the applicable First Nation(s) for three years following the commercial operations commencement date (COD). The penalty for falling below the required First Nations equity ownership during this period was expanded to include both termination and/or a reduction in the energy price provided for in the Electricity Purchase Agreement.
The proponent is now obligated to provide a letter on the first three anniversaries of the COD from each applicable First Nation disclosing their current percentage of ownership. Proponents must also incorporate, as Schedule 4 to their proposal, all information listed in the RFP’s First Nation Consultation and Economic Participation document. Proponents should understand that if their bid is successful, information from this schedule may be incorporated as terms of the EPA.
Bennett Jones will continue to monitor any developments and provide updates to the call to power. Please contact the authors for further information.