In fiscal year 2015, BC Hydro paid $1.064 billion to independent power producers (IPPs), an average of 7.9¢ a KWh.
In fiscal year 2016, BC Hydro paid $1.229 billion to independent power producers and, in the quarter ended March 31 2016, it paid 9.8¢ a KWh, a 23% increase of the unit cost in the preceding fiscal year.
In fiscal year 2015, BC Hydro sold electricity to Alberta and Western USA for $775 million, netting an average of 3.5¢ a KWh.
In fiscal year 2016, BC Hydro sold electricity to Alberta and Western USA for $460 million, netting an average of 3.1¢ a KWh, a 14% decrease in the unit cost in the preceding fiscal year.
Had IPP’s sold their power for the same price that BC Hydro realized in trade markets, they would have realized:
- In FY 2015, $591 million less;
- In FY 2016, $782 million less.
The deals will get better for IPPs. BC Hydro’s website now announces that it has contracted for 19,290 GWh from these private producers. That is 35% more than purchases in the just completed fiscal year and follows an established trend.
The chart is prepared from annual sales reports issued by BC Hydro. This shows the total sales to the utility’s three main customers groups: residential, commercial and heavy industrial.
This entire subject is not one that BC Liberals like to discuss. I’m told they have BC Hydro working on a revised demand forecast and have had major problems trying to force square pegs into round holes. Even without Site C, it would be impossible to justify further purchases from private power producers. If BC Hydro continues dumping power on external trade markets, prices will be reduced to even lower levels.
That outcome will make expensive Site C power an even bigger financial disaster.