BC Hydro

$4.9 billion extra generated by IPPs, updated

Note: I doubled the period of analysis, going back to 2003, which was the last year that unit prices paid to IPPs correlated to market prices evidenced by BC Hydro’s own out of province sales. That results in updating the title value from $3.6 bn to almost $5 bn.


For more than two decades, BC Liberals claimed they were the trustworthy party of business. The other guys were dangerous lefties – socialists, even communists – who would do dangerous things such as encouraging higher wages, regulating potential polluters and spending tax dollars on healthcare, public education and the social safety net.

In 2012, Rich Coleman was the most intemperate. From my article Socialist hordes at the gates, this time for real, quoting the Minister responsible for producing gas:

I know the socialist-communist thinking is that everything should be nationalized and controlled. If you had your way, you probably would nationalize mining, nationalize natural gas. You would nationalize everything, because you don’t believe in the private sector.

Only a year later, Coleman was a cheerleader for socialism. His new LNG friends were from state owned businesses, from nations where governments are unaccountable, dishonest and accustomed to secret dealings. Coleman and Liberal colleagues were willing to deliver value to state owned enterprises as long as the assets weren’t wasted on ordinary people. And, Malaysia’s leader makes sures he doesn’t do that. Now, Prime Minister Najib Razak is implicated by the FBI in misappropriations of more than $3 billion.

That is not far different from how Liberals conduct business in British Columbia. I’ve demonstrated how, in fiscal year 2015-16, with reduced rights and royalties payments and by subsidies of drilling costs, the BC Government stopped taking money from natural gas producers:

Royalties

credits

BC Hydro also has been managed to deliver billions of dollars in benefits to private independent power producers. Trade export quantities have consistently been higher than purchases of private power so, had BC Hydro not been forced to make IPP purchases, it would have had less surplus power. It therefore would exported smaller quantities at low prices. Had IPPs been left to sell their product to the same free market that BC Hydro trades into, they would have gained 3.6 billion fewer revenue dollars. It is almost $5 billion since 2003.

The IPPs didn’t gamble but they are winning big. BC Hydro customers and taxpayers are the losers and they will likely continue losing until the last contract expires in 2075.

IPP purchases and trade sales

IPP vs Export Sales

2003 to 2016

2003 to 2016 IPP values

2003 to 2016 IPP purchases at market values in .pdf format


1 year rate increase

5 year rate increases

6 replies »

  1. Imagine – a government so incompetent that you have to pause and consider; what was their most egregious failure? Handing out lolly to pals? Debt increased $72 billion in the last six years, more than the provincial debt in the BC’s first 135 years (in $2016)? Making LNG deals with international crooks? Spending over a billion$ promoting non existent LNG to non markets disregarding worldwide expert opinion? Perhaps Site C building farm destructive hydro electric (an obsolete technique) we don’t and won’t need for customers we don’t have? Massive environmental damage to our rivers to make rich political friends richer? WE’RE GETTING CLOSE, ROLL OF DRUMS, THE WINNER!

    CAMPBELL/CLARK GOVERNMENT, IN LOCKSTEP WITH FRASER INSTITUTE “PRINCIPLES” DESTROYS BC HYDRO, OUR WORLD COVETED POWER COMPANY.

    It’s all stated clearly here and by others. It’s not complicated only hard to believe that any government would do such a thing, then just to be sure, approve Site C.

    There are far more than enough reasons to throw the lot out, but BC HYDRO, our corporate pride and joy is the only one that sorely damages our pride (no small thing), was, financially, an incredible legacy to future generations, the action was folly without parallel, and unlike most other Campbell/Clark fuck-ups (sorry editor, there is no matching synonym), THIS ONE IS IRREPARABLE.

    In a country only slightly less civilized, this lot would be behind bars like their desr friends in Singapore

    Like

    • I’ve read Hansard, the record of debates in the Legislature. IMO, Adrian Dix has been an effective critic, diligently pursuing complicated issues, such as those around BC Hydro executives telling untruths to the BCUC regulatory body and distortions of BC Hydro financial results by deferrals of billions of dollar of expenses. He’s also got interesting views on ICBC problems where they’ve reduced the staff delivering public services and increased numbers of high priced people in executive offices.

      Too many Press Gallery found-ins only report easy subjects, particularly ones that have analyses completed for them by government spin doctors and commercial lobbyists.

      One Vancouver Sun business reporter told me he shouldn’t be expected to report on false financial claims of large corporations because he “wasn’t an accountant.” That fact doesn’t caution him or stop him from repeating PR talking points provided by those companies.

      My point is that the flow of information is corrupt. Just as most corporate media won’t report factual information found here, they consciously choose to ignore news that does not fit a particular agenda. Then they encourage others to say, all opposition members – NDP, Green and independent – are ineffective because they are seldom in the news.

      Like

      • h@s.ca gets that our big BC media is hopeless. I totally agree with him and to your excellent four paragraph reply Norm that concisely sums up the reality we are suffering. Bang on!

        However, too many BC citizens still fail to bridge the long compromised puppet Liberal media for their false narrative re… the labeling of the so called ‘do nothing Opposition’. Actual reality for any following past Question Periods – the Opposition has very effectively called out the many failures of the BC Liberals.

        On (H)education, Healthcare, (H)energy, Housing and Hydro (just using ‘H’ examples) the NDP opposition and two sitting independents have clearly and convincingly exposed the continuing incompetence and corruption. They have demonstrated a very capable catalyst for better government and a brighter future for all British Columbians.

        Citizen complacency and compliant media have allowed the serial ongoing chaos. Presented with the facts over deflective spin the outrageous Lib scandal Ponzi corruption will collapse. The nightmare that is the self interested Lib Pirates, their political self interested corporate friends and offshore rogues will just be a sad history of corruption.

        Liked by 1 person

  2. Maybe it’s time to rename IPPs to more accurately reflect their negative impact on the citizens of British Columbia.

    My suggestion is BC Hydra, after the many-headed serpent water monster of Greek and Roman mythology.

    Unless a modern-day Heracles arrives, Hydro will soon become just another head on the Hydra.

    Like

  3. In the old days, this practice would have been called graft, corruption, etc. and there would be investigations, trials and convictions.

    Today it is called a smart accounting practice, deferrals, etc. and there are no investigations what so ever.

    The main stream media have become a parody of a news organization, pretending to dispense news, but instead are a slick propaganda weapon of the right wing.

    I give it 5 years, but BC’s economy will implode under the weight of mismanagement, graft and corruption, but don’t worry, those responsible will be very well taken care of by their corporate masters.

    Like

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