British Columbia Liberals announce the new Clean Energy Act sets the foundation for a new future of electricity self-sufficiency.
Self-sufficiency: The ability to satisfy one’s basic needs without outside help.
General Electric, the multinational corporation ranked in 2009 by Forbes as the world’s largest, invested $727 million in British Columbia’s Toba Inlet hydro power project and the first phase of the Dokie Ridge wind farm project in the Peace River.
Finavera Renewables Inc., a Vancouver company with no revenues, an accumulated deficit of $41.7 million and an overall shareholder deficiency of $5.5 million at the beginning of fiscal year 2010, was selected by BC Hydro to build four electricity-generating wind farms in northeastern B.C. The projects are expected to cost at least $800 million. General Electric has negotiated the exclusive right to provide 100 percent financing for Finavera’s four wind projects.
I invite readers to consider this statement written by the auditors of Finavera and attached to the 2009 annual financial statements:
The [Energy Purchase Agreements] with B.C. Hydro provide a revenue stream based on a defined price and are the commercial cornerstones of any power project in British Columbia, providing the basis to move forward towards project construction and operation.
Despite all the disingenuous and misleading B.S. issued by Liberal politicians and operatives for private power producers, that single sentence, which is carefully constructed and required by professional audit standards, demonstrates the reason why there is a rush of private power projects.
The applicants do not need money or experience, they simply need political influence with BC Liberals. The energy purchase agreement provided by BC Hydro removes substantially all business risk and the favoured recipients take the project to money brokers who readily fund it because the creditworthiness of British Columbia stands behind each EPA. This would be like you and I buying a house we intend to rent to government through a 40 year lease at double or triple market rates, with payments escalating to protect against inflation, guaranteed by taxpayers of British Columbia.
Multinational, multi-industry companies like General Electric are quick to join because they earn giant returns at the capital stage of the project, selling turbines, generators and infrastructure equipment. As an equity and financing partner, GE guarantees it will provide the hardware. With a guaranteed market and a guaranteed profit, the initial partners can hold shares long term for income or, more likely, dump them into institutional markets for quick capital gains, on which they will barely pay taxes, probably in some other jurisdiction. And that, is ironic because taxpayers are the essential elements of the deal: the victims.
The whole program of private power production founded on BC Hydro Energy Purchase Agreements allows outrageous enrichment of a small number. The program is facilitated by influence peddling and its government facilitators are either witless, dishonest or both. One thing I believed about Gordon Campbell is that he was not witless.
Read Will McMartin’s outstanding article at The Tyee. BC’s Energy Independence? Don’t Believe It.
[Energy independence], it’s all a sham. British Columbia under Gordon Campbell’s BC Liberal government has become increasingly dependent on non-B.C. owned corporations to produce high-priced electricity, which BC Hydro is forced (by government edict) to buy, and in turn sell at inflated prices to captive residential and commercial consumers.
See also McMartin’s May 11 piece, General Electric and BC’s Private Power Gold Rush.
In February and March, $142,420 was generated through the sale of just over 2.8 million share-warrant units at five cents apiece. A few weeks later, another 10 million shares were sold at six cents each and fetched a total of $600,000.
The former sale appears to have gone to Anchorage Capital Master Offshore Ltd., a New York-based hedge fund founded in 2003 by Kevin Ulrich and Anthony Davis, a pair of alumni from Wall Street’s largest investment bank and brokerage, Goldman Sachs.