The B.C. government is introducing legislation and preparing regulatory orders as part of a major effort to boost electricity supply for natural resource projects deemed in the public interest, while simultaneously restricting energy usage for emerging technologies such as AI.
Energy for critical mineral and natural gas projects is to be prioritized, but new limits imposed on electricity usage for artificial intelligence (AI), data centres and export-oriented hydrogen-production operations. There is to be a complete ban on new hook-ups for cryptocurrency mining.
“These AI data centres use a huge amount of electricity and provide relatively low levels of employment,” Premier David Eby told reporters on Monday (Oct. 20). “We can see the demand across North America and around the world for these data centres. There’s a huge number of proponents that want to bring these projects forward.”
To get the electricity to resource projects, the government plans to expedite the North Coast Transmission Line, an electrical line planned to run about the length of B.C. from Prince George to Terrace, by forcing the B.C. Utilities Commission to deem it a “public convenience and public necessity.”
This power line is slated to power a bunch of future mines and liquefied natural gas (LNG) projects. By deeming it in the public interest, Eby reckons it will shorten the permitting process by as much as a year. The government has already exempted the project from the environmental assessment process.
“We are making the decision as a government that this is in the public interest,” Eby said. “We will be held accountable for that decision by voters.”
Legislation introduced on Monday also allows the government to enter into limited partnerships on the transmission line with area First Nations. These partnership deals will still require a future cabinet order.
The government expects the transmission line project to create approximately 9,700 jobs, contribute $10 billion per year to GDP, and provide $950 million in annual revenue.
It will be built in three phases, beginning in 2026, with phase one stretching from Prince George to Fraser Lake, and phase two completing the line to Terrace. Phase three will be the construction of an extension from Terrace, 350 kilometres north to Aiyanish and Bob Quinn Lake.
The project’s first two phases are expected to cost $6 billion. The province does not have a final estimate for the third.
While the costs for the transmission line are becoming more fixed, the benefits from the natural resource projects are still uncertain because many are yet to secure regulatory approval themselves.
Limits on energy usage for emerging technology
The new legislation restricts future energy usage for AI, data centres and hydrogen-for-export by requiring that they go through a competitive bidding process — essentially allowing BC Hydro to decide if those types of projects can go ahead. That bidding process will open in January.
Electricity is currently allocated through a “first come, first served” system. The new rules give government, through BC Hydro, the authority to decide which projects can connect to power, and in what order.
BC Hydro will also be able to adjust rates for different uses under the new rules, allowing the province to prioritize the natural resource sector and charge more for uses that don’t have as many benefits for the province’s economy.
Each type of use has different stipulations attached, though everything is not fully worked out yet. For example, the government has not yet decided the rate to be paid by each type of user.
Eby said that while the construction of new data centres can be “really positive,” the government also needs to ensure the data centres are using water carefully, providing data and national security benefits to B.C., and creating local economic benefit.
“That requires individual negotiations with project owners,” he said.
The government is justifying these changes by arguing there is a need for choice in how electricity is used in the face of the ability of new technologies, such as crypto, hydrogen and AI, to scale up very quickly and make sudden, massive demands on the grid.
The plan would be to have an annual allowance for these types of uses, though new connections for crypto mining would be banned altogether.
There is already a moratorium in place restricting new electrical connections for cryptocurrency mining operations. This would be made permanent under the legislation.
Because crypto mining uses so much power, a specific hook-up must be provided by BC Hydro, making it easy for the utility to enforce the ban.
Eby compared this to attempting to track the energy usage of illegal cannabis-growing operations.
“There are lots of ways to detect it, it’s not something that could be smuggled in like a grow-op or that kind of thing in the pre-legalization era,” he said.