BC Hydro

Induced failure

The set of facts that troubles BC Hydro executives most is the one that best reveals their deceptions. It is about consumption of electricity by British Columbia’s residential, commercial and industrial consumers. These numbers are taken from BC Hydro Annual Reports:

consumption

The consumption of electricity in this province has remained stable for a dozen years. In fact, during the first half of the current fiscal year, consumption is down by 2.1%, compared to the preceding year. BC Hydro’s management uses different numbers by conflating power consumed by its end-users with power sold on the open markets. Sales outside the province that used to be reported as “trade” sales may now be included in “other” sales and the utility pretends the volumes are part of domestic consumption. They dare not be truthful because it explodes their claims of growing demand.

However, while demand has remained unchanged, other important numbers have not.

total-assets

capital-assets

commitments

deferrals

Organization with poor systems of accountability inevitably fail. Objectives change to serve the individuals in charge. BC Hydro is a perfect example. Were the company still run by skilled professional managers, its goal would be to produce power efficiently and minimize long term costs for its owners, the people of British Columbia.

Wikipedia offers Parkinson’s Law, which describes BC Hydro. C. Northcote Parkinson’s adage is:

a reference to the self-satisfying uncontrolled growth of the bureaucratic apparatus in an organization.

Under its current Liberal direction, BC Hydro’s leadership forgets the company’s original purpose. Now, the aim is to deliver benefits to a tiny group of individuals and corporations and to have ordinary citizens pay the cost, whether it is affordable or not.

Categories: BC Hydro

13 replies »

    • A capital asset is also known as a fixed asset or as property, plant and equipment. It excludes assets that will likely be consumed, converted or used up in the short term, like cash, inventories, supplies, prepaid insurance, accounts receivable, short-term investments etc.

      Total assets include every item of value owned by the reporting entity. I use it because at BC Hydro, the total is distorted by expenses that should have been written but are carried as deferred costs, to be written off in the future. It is like you excluding the cost of the groceries you used in the last ten years from a list of household expenses. You would argue, as the Liberals do, that monies spent on groceries before now will be of benefit to you in the future and their value is therefore an asset.

      Don’t try that explanation with your bank manager!

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  1. Very sad doesn’t begin to express my feelings. There are many countries in the world that would incarcerate perpetrators of such fiscal suicide for long periods of time. Here we increase their stipend.

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  2. Hello Norm:
    There was an accurate article with terrific photos in the New York Times December 10, 2016 on the Site C Dam. This must be a media outlet that Christy Clark hasn’t bought-off. In her imagination, she would classify the article as pulp fiction, as she attempts a “Trump North” style of campaigning for her May 9th execution.

    Today, the BC Liberals announced a tax credit for Search and Rescue. I highly support the search and rescue cause but I wonder if it is advance planning as the Legislature resumes on Tuesday. “Where’s Waldo”, may become “Where’s Christy”? “Search and Rescue – please report to the Premier’s Office”. In the past, Clark has avoided Victoria because of the noxious political attitude. No place for lulu-lemon sweatpants, yoga mats – a complete absence of Zen in the den
    Christy is similar to “Babylon Sibyl” (translation = babble-on Christy) the legendary female prophet who had visions of the future. Some scholars now believe that these views are brought on by “gases seeping from the earth”. Could this be methane and LNG induced?

    Cautionary Note: Male reports should be chaperoned at all times and carry body-cameras when around Christy so that the truth can be documented.

    New York Times:

    “We felt we had the right as the democratically elected government to make the decision on a 9-billion-dollar project,” Mr. Bennett said, adding that such “decisions typically don’t get made by bureaucrats.”

    Critics disagree, saying that the government’s opaque approval process raises concerns about possible conflicts of interest.

    Among the companies hired to review and design the project were the accounting firm KPMG, which has donated more than 330,000 Canadian dollars ($244,000) to Mr. Bennett’s British Columbia Liberal party, and SNC-Lavalin, a Canadian engineering firm that has been imbued in corruption and bribery scandals and faced sanctions by the World Bank.

    Continue reading the main story

    The National Observer: January 17, 2017:

    “The premier’s office and Bennett’s office directed the timing of various Site C announcements, including an announcement about the completion of a temporary bridge across the Peace River, which Bennett did not want BC Hydro to make too close to an April increase in hydro rates.

    Both offices were also involved in the timing for an announcement about the completion of the $470-million lodge for Site C construction workers, which cost BC Hydro customers almost as much as Clark’s pre-election pledge to spend $500 million on affordable housing projects to help alleviate the Lower Mainland’s housing crisis.”

    http://www.nationalobserver.com/2017/01/17/news/crackdown-inside-christy-clark-governments-site-c-spin-machine

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  3. BC’s GDP growth for 2016 was reportedly about 3%. This is apparently good, compared to other provinces.

    BC’s Total Provincial Debt, which includes BC Hydro debt, is growing at 6.2% annually, from the 2016 BC Budget.

    Long-term, how can debt grow faster than GDP?

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    • GDP is a faulty measure. If 6 million cubic feet of timber is exported in the form of raw logs, the $700 million value is added to GDP but little may ever be circulated in BC. Logs are harvested by a small crew with expensive machines made elsewhere, hauled on trucks built in the USA and shipped to Asia on Asian ships crewed by low-wage workers from third world countries. Across the sea, the logs get manufactured into lumber or other products

      $700 million worth of logs turned into manufactured wood products in BC would have a completely different impact. Local workers and suppliers means the economic multiplier takes effect as each dollar earned gets spent in our communities.

      Similarly, if coal is exported and the coal companies collect $5 billion, GDP goes up but the proportion paid to workers in Canada is surprisingly low. The mining companies will spend much of their receipts elsewhere. Again, this is a capital intensive industry and one of the major costs is for imported machinery.

      I haven’t even touched on the deductions that should be made. GDP measures one part of the equation but it doesn’t account for environmental degradation. Abandoned mine clean-up costs are not deducted from the GDP counted when ore is shipped out of province. Costs can be significant:

      Over $350-million spent to clean up abandoned mine in Yukon and not an inch has been remediated.

      Cost of Abandoned, Contaminated Mine Sites in B.C. $508 Million, Up 83 Per Cent Since 2014

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  4. Just how much is it going to cost to remediate Site C? And who is going to be responsible – the same taxpayer that ‘benefited’ from the project? Has that been factored into the $9 Billion price tag? I urge you to read ‘tonyseba.com’ to get another perspective on the ‘benefits’ of this project.

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    • Hydro has refused to look at the costs of decommissioning Site C, despite having it pointed out that Nuclear plants for example have to include such a value during review. Their position is that the present generation is not responsible for the damage we do to the future. That if a future generation wants to repair the damage done, after the hills have slid into the reservoir, after first nations hunting and harvesting and the rights to do that have been destroyed, after large and sometimes only, sections of species dependent on the valley have been wiped out, when fifth generation farms are flood destroyed and the land with them, then Hydro says it is their responsibility to do that.

      Another form of deferral account.

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  5. Norm in 2008 i read a book called Confessions Of An Economic Hit Man by John Perkins.Everything fits into place. The citizens of b.c. are being fleeced by outside money lenders.

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    • It is a good recommendation. Easily understood, even a bit scary about how vulnerable we are to the truly greedy soulless people of the world.

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  6. …the self-satisfying uncontrolled growth of the bureaucratic apparatus in an organization…

    What would a bureaucratic headcount graph at BC Hydro look like?

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  7. Has BC Hydro considered that the $10 billion Site C Dam might become become a terriorist target and decimate our economy completely.

    Once the Dam is breached it will endanger a population of First Nations citizens living downstream and whatever farm land is left.

    Have they included climate change studies that threaten the area that is notorious for mudslides? How about earthquakes caused by LNG fracking that could rupture the dam’s foundation?

    Will they increase the number of Dam inspectors … or will they reduce Dam inspections as they did with Mount Polley?

    Perhaps BC Hydro’s new corporate office should be located downstream – just below the Dam … now, that would be a sight to see.

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