Last August, Chad Skelton of the Vancouver Sun reported on a conference call between BC Hydro president Dave Cobb and senior staff. Cobb said the utility was being forced by Liberal policy to pay private power producers huge sums for unneeded electricity.
“If it doesn’t change, it would be hundreds of millions of dollars per year that we would be spending of our ratepayers’ money with no value in return,” said Cobb.
Cobb hinted that government was being intransigent on the issue.
“‘Believe me, I’m having to bite my tongue probably more than anybody,” he said. “But we can sit around and pout about it or we can get on with it.”
Of course, within two months, Dave Cobb was getting on with it. In fact, he was gone. Out the door.
A year later, financial damage that Cobb talked about is not speculative, it’s occurring. Losses to BC Hydro customers are huge. In 2012, while some of the utility’s generators are quiet, it delivers high cost run of the river power. Excess electricity supplies in Washington and Oregon crowd transmission lines to California. The export market is not there.
Even Sun columnist Vaughn Palmer, a supporter of Liberal energy planning, has taken a step back and poses a rhetorical question:
What went wrong? Everything, it seems.
However, Palmer has a habit of pulling his punches, saying:
The resource plan calls for Hydro to continue to exploit the market for short-term sales, which have brought in $1.7 billion via its Powerex subsidiary over the past decade.
My reading of BC Hydro’s Integrated Resource Plan (IRP) is less optimistic. Much has changed from the days when BC was bringing in hundreds of millions by selling into the USA. Export markets will not get better soon. Hydro’s own IRP says conditions underpinning export market dynamics are expected to persist “into the foreseeable future.”