Drawing on his many years of experience with the provincial energy ministry, Mr. Ostergaard began his presentation with a review of B.C. energy outlooks prepared over the course of the century:

• in the 1920s, B.C. Electric wrote a letter in response to a customer query asserting that electricity would never be used for home heating as it was too expensive; coal was far cheaper and would continue to be used for the foreseeable future
• in the 1960s, BC Hydro was projecting that double-digit electricity demand growth would continue for decades to come, resulting in an increase in B.C. generating capacity of over 35,000 MW, much of which would come from nuclear power beginning in the 1980s, and from the damming of such rivers as the Fraser, Nass, and Skeena. To not tap such hydro-electric power would be "a waste of a resource". (Current BC Hydro hydro-electric generating capacity is 9750 MW, and demand for electricity is growing at slightly less than 2% per annum.)
• the oil price shocks of the 1970s helped change the previously-held view that oil, gas, and coal would be key in fuelling the province's growth forever
• the 1980s saw the establishment of the BCUC in an environment where BC Hydro used to set its own rates and where the federal National Energy Program was coming into play just as the world oil market was correcting itself

Of course the lesson is that the future cannot be predicted, and once-sound assertions appear somewhat ludicrous later on.

Mr. Ostergaard next discussed the present energy situation in B.C.

• Oil - oil markets have moved from continental to global. The NEP has been replaced by light-handed regulation. Technical advancements continue to find new oil reserves. Other technological advances and new market focus has reduced the number of operating petroleum refineries in B.C. from six 10 years ago to two today (Husky in Prince George, and Chevron in Burnaby).
• Natural Gas - gas markets have moved from regional to continent-wide in nature. B.C. gas production has doubled since 1991, in large part due to increased exports to the U.S. Deregulation of the industry, begun in 1985, continues. A new issue is convergence with electricity. A "just-in-time" approach to gas markets has reduced reserve-to-production ratios to less than one-half of what they were prior to de-regulation, so that much of the gas we will be consuming in 20 to 25 years has not even been discovered yet. Gas currently has 25% of the total B.C. energy market. He feels that "natural gas customers have been well-served by competition".
• Electricity - the scale of the electricity market is increasingly continental. PowerEx, for instance, is now a FERC-approved international power trader. Locally, BC Hydro and West Kootenay Power continue to move towards reciprocity on their systems. While B.C.'s electric utilities are currently providing low-cost, reliable service, pressures remain for increases open market access, and for new supply sources.

Next, he spoke on how the BCUC is managing the ongoing changes in the energy industry:

• the use of a generic ROE formula has greatly reduced the length and frequency of public hearings.
• the implementation of Alternative Dispute Resolution (ADR) has likewise reduced the need for expensive, drawn-out hearings.
• recognizing that traditional cost-of-service regulation has given utilities little incentive to seek efficiencies, the BCUC became the first regulator in Canada to implement performance-based rate-making for LDCs.
• the re-vamping of mains extension tests has eased cross-subsidies among utility customers.
• new guidelines for the separation of utility and non-regulated business activities has allowed utilities to participate in retail markets "downstream" of the utility meter.
• the costs of operating the BCUC have been reduced. The annual budget of $3.8 million is one-half its size 10 years ago, representing $1 for each B.C. resident, and less than 1/100% of the total annual sum of B.C. utility customer bills.

He concluded his presentation with a discussion of upcoming Commission decisions and activities:

• the decision on BC Gas' application to build the 312-km Yahk-to-Oliver "Southern Crossing Pipeline" is expected by early April.
• the Commission decision on BC Hydro's Wholesale Transmission Services Application would be made next.
• the Commission is prepared to implement any B.C. Government directives falling out of the January, 1998 Jaccard report on B.C. Electricity Market Reform. Even if the government does not act on the report's recommendations, Ostergaard asserted that the Commission will still be able to act to some degree to increase access to market-based power. For instance, the unbundling of existing Hydro large customer tariffs into a combination of real-time pricing and transmission would emulate market-based power to some degree.
• the Commission plans to review its use of ADR. While successful in many instances since it was first used by the BCUC some years ago, it was not able to avoid a hearing into Pacific Northern Gas' rate design and revenue requirement plans. He envisions this review as a fine-tuning process only.
• if it fits the B.C. Government's agenda, there may be a review of the BCUC Act. There have been numerous alterations of the Act since it was enacted in 1980. Year later, it may be time to overhaul the Act, and rid it of some aspects no longer required, and reinforce other provisions. For instance, still on the books are regulations under the auspices of the Commission dealing with the placement of "No Smoking" signs on Vancouver street cars.