BC Hydro

Crime (still) in progress (a 2010 article repeated)

3871d-white_collar_crime 160News item:

British Columbia Liberals announce the new Clean Energy Act sets the foundation for a new future of electricity self-sufficiency.

Definition:

Self-sufficiency: The ability to satisfy one’s basic needs without outside help.

News item:

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.

News item:

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.

campbell 160Despite 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.

lekstrom 160The 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.

6 replies »

  1. Yes, as long as there are public funds to protect them from losses.

    Our government should not be putting the Wall Street gangs in charge of anything. They should be putting them in prison.

    But hey, I guess if you steal $100, you are a thief. If you steal a $1 billion, you are an investment bank.

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  2. Is it self-sufficiency for British Columbia to hand a foreign corporation the right to build electrical generating capacity, financed by contracts backed by future customers of BC Hydro. General Electric have already demonstrated the love to push capital off to tax havens so they don't pay tax at home.

    New York Times reported that, in addition to paying no federal U.S. income taxes in 2010, General Electric (GE), the largest US corporation, is set to get a tax credit from the government of $3.2 billion.

    GE’s latest tax bill only points to the general rule: unlike regular people, most American corporations do not pay federal income tax. GE made $14.1 billion in profits in 2010, $5.1 billion of which was from its US operations.

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  3. It's never been more true – “follow the money” –

    How do the BC Liberals govern our province?
    How did Campbell get an Order of BC?
    What happened to BC Rail?
    Follow the money ~

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  4. “The program is facilitated by influence peddling and its government facilitators are either witless, dishonest or both.”

    Would the Honourable Mr. Bill Bennett, Member for Kootenay East, please respond here? I would encourage him to use his recent approval of the alpine lake draining, waterfall diverting, powerline stringing, pristine fjord industrializing IPP in Narrows Inlet on the Sunshine Coast as an example of his rationale. In the interest of fairness, I would allow references to his simultaneous approval of Site C. In the event such references substantiate (by way of independent audit) his oft publicized concern regarding taxpayer liabilities, he should get full credit.

    Should the Narrows Inlet project not meet his criteria for concern, perhaps the upcoming 13 applications for Jervis/Princess Louisa Inlets would? Or maybe the shuttering of Burrard Thermal? or dillydallying with Revelstoke 6?

    I understand Mr. Bennett is very busy, thus would accept delegation of a response (here) to his people….Baldrey, Palmer, Fletcher, Smyth et al.

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  5. Norm says: “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.”

    Voters need to understand what has been going on with the BC Liberals and BC Hydro. Start talking Gigawatt hours and contract language and many people’s eyes glaze over, I suspect — but THIS analogy and others like it might be a good way to get their attention.

    I’d also like to see a simple animation, showing the flow of money and power through IPPs, compared to our legacy dams. I’d support its creation, through crowd-funding.

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