BC Hydro's plans to meet a 40 per cent increase in energy demand over the next 20 years by constructing the controversial Site C hydroelectric dam in northern B.C. and promoting more energy conservation, according to a draft report released today.

"BC Hydro has carefully considered the many tradeoffs required to serve our 1.9 million customers while planning for the electricity needs of future generations," president Charles Reid said in a statement.

"The (draft plan) renews our commitment to conservation to provide customers with the ability to reduce their electricity bills and addresses the province's long-term electricity requirements, which we will meet with clean, renewable and cost-effective supply options."

The plan recommends pursuing the Site C hydroelectric project —a key project that will add 5,100 gigawatts a year of energy once it comes into service in 2024, but one that is not without controversy.

A provincial environmental review of the project is underway. But NDP Energy Critic John Horgan says right now, there's already a surplus in power, reducing the need for Site C.

"It's been pushed back further and further. This plan is putting it two years further back than the last draft in 2012, so that tells me that Hydro is conscious of the surplus of the power we have today, and the consequences of having more power than we need," said Horgan

Site C may be required in the future, but there are a lot of issues that need to be worked out before it can move forward, he says. Conservationists and farmers in the region have voiced opposition to the loss of agricultural land that would result from flooding for the dam.

Minister supports conservation efforts

The report also recommends the utility company explore natural gas-fired generation on the north coast to meet the expected demand.

The draft Integrated Resource Plan makes 17 recommendations, including that the Crown agency take measures to save 7,800 gigawatt hours per year by 2021. B.C. currently uses about 57,000 gigawatt hours annually — a number expected to hit 80,000 gigawatt hours by 2033.

Energy and Mines Minister Bill Bennett notes energy conservation will be cheaper in the long term than building new power generation facilities.

"Conservation is going to help us meet the growing demand," Bennett said.

"There would be investments, obviously, needed to make that happen, but the investments... would end up costing rate payers less than building new generation."

Bennett said the plan also shows that the province has adequate energy supply to meet the initial requirement of about 3,000 gigawatt hours a year to operate LNG facilities that form the foundation of the Liberal government's economic plan.

Approximately a dozen projects have been announced for Kitimat and Prince Rupert as well as other areas of the north coast, Howe Sound and Vancouver Island.

"We don't want to make arrangements for companies to build LNG facilities and increase the production of gas in the northeast, and build pipelines, only to find out that we don't have enough electricity to drive the new plants," Bennett said. "So that's a very, very important thing."

The plan pointed out, however, that most LNG producers will use natural gas turbines for the energy-intensive process of cooling natural gas to convert it to a liquid.

The province's Clean Energy Act requires B.C. to generate at least 93 per cent of all electricity from clean or renewable sources, though that was revised last year to exclude LNG facilities.

Bennett made it clear that preparing to meet the increased demand will mean an increase in rates. He doesn't know by how much.

"There are pressures on rates right now. The pressures are from the amount that's being invested in infrastructure and, yes, they will have to go up."

Consultations on the draft plan will be held from Sept. 3 to Oct. 18, with a final report submitted to the government in November.