BC Hydro

BC Hydro’s 3rd quarter FY 2016 report

According to BC Hydro’s report for the nine months ended December 31, 2015, domestic consumption of electricity is down 2.2% from the same period 10 years prior.

That we’ve had stable domestic power demand for more than a decade did not prevent independent power producers from selling more electricity to BC Hydro. The volume is up 30% in five years, but through rising prices, the amount paid IPPs increased 77% in the same period. Compare that to increased allowances provided BC’s disabled citizens.

The first chart shows unit prices paid and the second shows nine-month purchase totals:

I suspect that BC Hydro will be studied in business schools some day. Professors will be trying to explain how senior utility company executives, overseen by an entire provincial government bureaucracy, expected to survive by buying power at a rate 65% more than the rate charged a large class of electricity consumers. They will also try to understand why BC Hydro decided to spend billions of borrowed dollars to add capacity when no more was needed, except by export customers only willing to pay a fraction of the cost of power.

I doubt there will be many executives or Liberal politicians left to explain. They’ll be sunning themselves on the Mediterranean.


Contributed by a regular reader:

8 replies »

  1. “I doubt there will be many executives or Liberal politicians left to explain. They'll be sunning themselves on the Mediterranean.”

    Add to that list career bureaucrats in all levels of government, municipal on up, that facilitate granting of necessary licences, permits and zoning (if not indeed facilitating actual changes in provincial law) that are allowing even more IPP's to get built. This in spite of the factual data Norm publishes here. There was a detailed list a few years ago of all those public officials and decision makers who migrated to highly paid positions in the private power company sector. I wager that list has grown. They are truly laughing at the BC electorate. Mainstream media has done the job asked of them by laying down on the IPP hydroelectric power issue. They may not be getting cruise ship cabins with balconies, but chances are good they are on the ship. Not true they say? Prove it. Show me the justification for negatively impacting our alpine lakes, rivers and waterfalls.


  2. The graph showing average price paid for IPP power probably includes the low price paid to Alcan for power from the Kemano plant. This project is listed as the largest IPP, although it predates BC Hydro. It powers Alcan's aluminum plant in Kitimat. It also sells excess power to BCH at a relatively low rate – Alcan still makes a good profit from sales to BCH.

    Taking the relatively low-priced Kemano power sales out of the equation would make the IPP costs of power higher, on the graph above.

    Built 1951-54, the Kenney dam floods a large area with lakes west of Prince George. Water is diverted down to the coast through tunnels to Kemano; power is then transmitted over to Kitimat. That water previously went east to the Nechako, then into the Fraser at Prince George.


  3. If my supposition of corruption is correct, how would it look any different?

    In recent budget documents, the Clark government moaned about revenue lost in Columbia River sales because the mid-Columbia wholesale power rate rate declined during the quarter ended Dec 31 2015. According to the US Department of Energy, the weighted average selling price dropped from 3.2¢ a KWh to 2.2¢ a KWh, a 30% decline.

    Meanwhile, IPPs in British Columbia saw the average rate paid to them rise from 8.37¢ to 9.14¢, almost 10%.

    As Hugh points out above, the average price paid to IPPs presents an incomplete picture. Hugh reports some of the power acquisitions are well below average, so others are well above.

    Corruption? Remember, contract deals are hidden but they cannot hide the fact that BC Hydro's IPP purchases are rising while demand is flat or that BC Hydro is paying about 3x market rate adjusted for dollar exchange.

    If something looks like a duck, swims like a duck, quacks like a duck…


  4. Don't forget to factor in the deferment program for the mines that some will likely never actually pay. And now BC Hydro is asking for a 4% increase in rates again. Can't imagine why. Should just tack it onto our MSP premiums.


  5. The BC Clean Energy Act is really evil. It does several things (among others):

    1. Says electricity in BC has to be sourced in BC, so no Mid C imports, even if it's cheaper.
    2. Exempts Site C from BCUC.
    3. Exempts power call for IPP power from BCUC.
    4. Stops use of Burrard Thermal, except in certain circumstances.

    The original 2010 version of the act even said BC Hydro had to have an huge excess of made-in-BC power – that was so blatant they dropped it.

    At the same time they kept saying demand for power in BC will keep rising 40%.

    At the same time they have a policy whereby BC Hydro is not permitted to build new power sources, except to expand existing plants and to build the $9 billion Site C.

    When you look at all that above, note the gigantic benefit it gives to IPPs in BC. Note how our publicly-owned power utility BC Hydro is being ransacked to benefit private industry.

    Remember how in 2001 the privatization agreement to sell parts of BC Hydro to Accenture was exempted from common law, in order to thwart a class action lawsuit against the deal.




  6. The Neo-Liberal party of BC couldn't sell BC Hydro like they did BC rail so they did the next best thing, bankrupted it . I don't understand how they can get away with what they are doing you would think stealing from BC taxpayers would be illegal. Man we live in a banana republic it's so embarrassing. If the NDP loses the next election then the NDP party needs to be destroyed. People that vote for the Neo-Liberals are traitors to our society in my opinion.


  7. “Yeah, but…”

    I know you have the editorial hammer to delete discourteous, irrelevant comments, Norm — and I suspect you exercise it more than Harvey O., for example. Still, you'd think there would be at least ONE knowledgable pro-BC Liberal citizen who would try to politely challenge your facts and figures. I've invited a few to your “house” but they won't even come in the yard.


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