BC Hydro

BC Hydro gifts worth billions

crisisIn 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.

IPP Purchases

domestic sales

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.

pegThis 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.

 

 

8 replies »

  1. …you guys need to talk…

    Alberta NDP moves to end secret Klein-era power scheme to offload corporate losses on the public

    “In a nutshell, the [Alberta] Tories intentionally snuck a loophole into their legislation “deregulating” electricity sales that allowed companies buying electricity from generators and reselling it in the “market” to walk away if a change in the law made their activities unprofitable. This was done in secret, naturally, passed by a discreet cabinet order.”

    http://albertapolitics.ca/2016/07/ndp-moves-end-secret-klein-era-scheme-offload-corporate-losses-public-opposition-predictably-screams/

    makes a person wonder if those first interprovincial trade deals with Alberta that Campbell used to brag about were step one in this swindle

    it could also be reasonably argued that any legislation or deals done during Campbell’s first term are null & void because of the malicious denial of the Government to give the NDP “Official” opposition status – so… implications

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  2. You would think that the BC Liberals would have gotten the message that IPPs are costing us big time and would quietly tell Hydro, “Psst! Let’s cool it with the IPPs now. Don’t sign any more power calls.”

    But no… they keep on building them. The criminality has to stop.

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  3. Norm, in 2015, Hydro paid IPPs $672 million over market price for their product. I’m imagining it’s even worse for fiscal 2016?

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    • Sometime the numbers shift slightly because of the period under review.

      Statistics about the quarter ended March 31 became available late Friday afternoon (the time government dumps bad news) and this time, instead of looking at MID-C market values, I used prices that BC Hydro was actually receiving for surplus power sold to Alberta and USA. That is the market that IPPs would sell into if they didn’t have sweetheart deals with BC Hydro.

      In the most recent quarter reported, BC Hydro paid $290 million for private power at an average price of 9.8¢ a KWh. It exported power from BC at less than 3¢ a KWh. That suggests a loss on private power resold of 6.8¢ a KWh, or about $200 million in three months.

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  4. I’d call these additional purchases from IPP’s criminal actions punishable by imprisonment. Unfortunately in BC the government/BC Hydro are not held accountable by the justice system or seemingly…the electorate. Very sad.

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  5. The sun is shining but am happy as a lark? No, I’m not! I come here for my morning dose of depression and leave angry, dejected and feeling somewhat hopeless. Its sort of a masochistic ritual to which I’ve become addicted!
    Even if we became fully ‘renewable’ would this economic debacle ever end? Maybe I should move to a jurisdiction that purchases BC Hydro power for $.03 a KWh. I mean, even if I go off grid ‘THEY’ will still get me one way or another.
    Do you really think Gordon Campbell will have the balls to return? I guess he has enough of his ilk with which to coalesce that he can ignore those that he’s harmed.

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