New energy legislation is making critics uneasy as the B.C. government again moves to consolidate its authority to expedite major projects — or to hold them back.
Warning of the “insatiable demand for power” from artificial intelligence (AI), data centres and cryptocurrency mining, Energy and Climate Solutions Minister Adrian Dix is justifying the moves by arguing the government must act now to limit access to the electrical grid.
“We have a massive demand,” he said. “Everywhere — in every electricity system in the world.”
Meanwhile, he is working to electrify the far reaches of B.C. to support natural resource extraction.
Critics argue this duality means the government is deciding who gets electricity and who doesn’t — and is undermining the decision-making authority of the B.C. Utilities Commission in the process.
“The government is choosing winners and losers,” said Larry Neufeld, B.C. Conservative critic for Oil, Natural Gas and Energy. “As far as projects are concerned, my opinion is that the market should decide.”
Dix contends that the government is simply setting the criteria for who gets to use B.C.’s hydropower and trying to ensure large, power-hungry industrial operations also provide jobs if they are to connect to the grid.
“We have to have a system in place to manage requests,” he said.
His new energy bill, introduced in the legislature on Oct. 20, is “enabling” legislation, meaning it allows the government to take specific future actions, but doesn’t take action in and of itself.
The bill enables BC Hydro to set different electricity rates for each use, and bars new hookups for cryptocurrency mining. It also allows BC Hydro to hold an open bidding process for companies that want to power AI or data centres.
The government is simultaneously introducing regulatory changes to fast-track the North Coast transmission line, which is to stretch across northern B.C. and feed electricity to liquefied natural gas (LNG) and critical mineral projects.
These regulations expedite the line’s construction by deeming it in the public interest, which exempts it from a B.C. Utilities Commission oversight process. Dix says this will save as much as 18 months.
What the critics are saying
B.C. Conservatives are fine with the idea of powering LNG and mines, but want the market to decide who gets power and how. In this view, if tech companies want to build data centres, then so be it.
“We can scale very quickly,” Neufeld said. “And why would we not bring that high-tech market, and why would we not bring those jobs?”
Neufeld also said he is not too keen on using a large amount of government funds — an estimated $6 billion just for the first two of three phases — for an electrical line. He says that the same amount of electricity could come from local LNG power plants.
“These plants could be purchased nearly off the shelf,” he said. “We could generate that electricity in a very short period of time.”
On the other side of the spectrum, the B.C. Greens worry that the B.C. Utilities Commission (BCUC) is being sidelined, allowing the government, via the cabinet, to decide who gets electricity and who doesn’t.
“We fundamentally have a problem with removing powers from the BCUC, and we don’t think it’s in the public interest,” said Green MLA Jeremy Valeriote.
Valeriote also cautions that because this legislation is “enabling” in nature, the rules created using it are open to alteration by future governments.
“You could have a government that’s very tech-friendly, as we do south of the border, and suddenly wants to shift all this public electricity to AI and data centres,” he said.
Meanwhile, those working in the computer engineering field do not want to hamper the development of B.C.’s data industry.
Guy Lemieux, an electrical and computer engineering professor at the University of British Columbia who specializes in computer hardware design, argues that Canada needs these centres to maintain information security.
And large data businesses need long-term, guaranteed access to electricity, he said.
“Anyone who’s going to invest in building a data centre is going to want to ensure that they can get their energy needs met over the long term,” he said. “And they don’t need legislation like this to discourage them from doing so.”
Surging demand for electricity
Dix cited several examples of places elsewhere in North America that are seeing surging demand for energy to power data centres. He said many of these jurisdictions are now dealing with the repercussions retroactively.
“We want to proceed with AI and data centres, but we have to do it in a paced way,” Dix said, adding that it does not make sense to use large amounts of electricity for a data centre that will “produce three security guard jobs.”
He points to lessons learned from cryptocurrency mining, an industry he said quickly ramped up and was suddenly using 150 megawatts of power, with more requests coming in.
To put that in perspective, the new Site C Dam in northern B.C. generates about 1,230 megawatts per year, enough power for roughly 500,000 homes.
B.C. has now put a hold on new electrical connections for crypto mining, and this new bill makes that ban permanent.
“That allocation of power doesn’t provide much of any benefit to British Columbia,” he said.
With AI and data centres now making massive requests, the government is taking action to curtail their connection before hundreds of megawatts begin to disappear into calculating computer systems
But from Lemieux’s perspective, the government is trying to solve a problem that does not yet exist.
He said this could have negative consequences for investment, and that data centres do provide some maintenance-type jobs and tax revenue.
“There will be a tax base from this,” he said. “They will have expenses. They will be generating revenue. It is a business.”
It also means those investors will look elsewhere, where the power may not be as clean and green.
“Isn’t it a benefit to the world that we provide that energy?” he asks.