Reluctant accountability. Scant hours before the legal reporting deadline, BC Hydro finally issued the 2015-16 report required by the Financial Information Act. Late on Friday September 30 – the end of quarter two – the agency also issued its first quarter report. Together, these documents demonstrate appalling mismanagement. It’s what happens when unqualified political hacks take charge of complicated corporations worth tens of billions.
I’ll provide additional commentary soon but these graphics should be enough to raise the ire of thoughtful British Columbians.
Despite a drop in domestic consumption and softening of markets outside BC, the volume of electricity purchased from independent producers in three months ended June 30/16 rose 8% over the same period a year earlier. BC Hydro paid $292 million to IPPs. For an equivalent amount of surplus power exported from the province, BC Hydro received $85 million.
This is an example of what Green Party leader Andrew Weaver called a run-of-river “waterwheel” project. It is owned by AltaGas. The price paid by BC Hydro to AltaGas will be adjusted for inflation in each of the 58 contract years remaining. Luckily for the private power producer, taxpayers spent close to a billion dollars on the NW power transmission line so power from AltaGas could flow into the provincial grid.
The volumes and average unit prices of power supplied by IPPs are growing steadily. So are BC Hydro’s losses from buying high and selling low.
A recap of BC Hydro assets, taken from audited financial statements. It is worth remembering the company sold more power to BC’s residential, commercial and industrial customers in 2006 than in 2016. Most of the so called regulatory assets are worthless deferrals, representing payments made by BC Hydro that have not been expensed. It is accounting trickery intended to pretend the utility has been profitable.
BC Hydro has experienced flat demand for more than a decade. Nevertheless, the value of its assets have grown 250% and purchases of private power grew 280% since 2005.
Add to this, the fact it has committed to spend another $10 billion or so to build the Site C dam. It is inexplicable.
In 5 years since Christy Clark became Premier, BC Hydro paid $281 million to SNC-Lavalin, the infamous bribe giving company barred from projects by the Canadian International Development Agency and the World Bank. By sheer coincidence, Christy Clark’s guiding mentor in 2011 was Gwyn Morgan, then Chairman of the Board of SNC-Lavalin.
3,200 people each cost BC Hydro more than $100,000 in remuneration and expenses for the year reported in the 2015-2016 Financial Information Act return.