BC Hydro

Liberals planting financial time bomb for the future

I have tracked electricity sales for decades and written much about the subject at In-Sights. My charts report BC Hydro’s sales to these customers:

  • Residential
  • Light industrial and commercial
  • Large industrial.

Those represent every consumer category and I believe power sold by BC Hydro to customers within the province is the only relevant element of demand.

BC Hydro’s primary purpose is meeting needs of British Columbia consumers. Selling surplus power outside the province makes sense if it is profitable. But, it is a costly mistake to create surpluses with high marginal cost power that must be dumped outside provincial borders at a fraction of what BC Hydro paid to acquire it.

An example is shown by the three month statement to December 31, 2016, the third quarter of Fiscal Year 2017. Independent power producers were paid $319 million at a rate of 9.6¢/KWh. Meanwhile, BC Hydro was selling power to large industrial users at 5.8¢/KWh and was exporting surplus electricity at a little more than 3¢/KWh. 

This is a recipe for sustaining losses, so our once proud utility resorts to accounting trickery. It defers expenses that have been paid but treated as deferred costs. Additionally, it books sales that have not occurred. The justification is that actual sales were less than projected so, in the interest of “smoothing” financial results, they add a fudge factor and leave it for some future management to undo.

BC Hydro wants to buy more private power and add to its own generating capacity – huge contracts may enrich generous friends – so it pretends that domestic sales are growing steadily. It does this by adding to domestic demand reports “other energy sales” that include power delivered outside BC. That’s a fairly recent development, a brainchild of the politicized management led by Premier Clark’s good friends. With the Board of Directors filled by Liberal donors, when a stupid policy is pursued, there’s nobody able to say no.

My assertion of faked demand reporting is supported by this chart of “other energy sales” over the past 25 years:

BC Hydro Other Energy Sales 25 years

I have been asked by a few electoral candidates and an environmental group to provide copies of my charts. I’m happy to do that for any that want to see BC Hydro return to sensible operation. Here are a few of the charts. They will be familiar to regular readers but worth repeating.
Capture
bc hydro
debt and consumption
assets
deferrals

Categories: BC Hydro

11 replies »

    • They most certainly are. Weaver needs to be called out on this big time…..again. Apparently no Green supporter reads here or reads Rafe. So many people think that the Green’s are a viable option for different governance when in fact this point alone proves they are pinch hitting for the BC Liberals. Weaver still thinks these IPP’s are waterwheels turning quietly in babbling brooks. There is babbling going on all right….by Weaver.

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    • Your link is not to the platform; its a form that states a platform is currently being rolled out; which is is. the BC Green Party does not in any sense endorse the BC Hydro business plan as it currently exists. One element of the platform is that the mandate of BC Hydro be expanded to include all electricity production,including renewables, beyond big hydro. I think you’ll find the platform to be a comprehensive and intelligent approach to the economy, and to energy management.

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      • Please provide links to Green MLA’s statements in the Legislature where he calls out the Liberals’ collosal blunders contracting IPPs and how he would correct. Also, tell us how much funding GPBC receives from people involved in the private power industry now or in its formation.

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    • I think the directors could be sued for failing in their fiduciary responsibility, particularly for expanding losses from IPP contracts. But, we would be suing ourselves because directors have indemnity agreements. However, senior managers could be discharged for cause with no fat severance payments.

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  1. Absolutely Criminal! But don’t blame it on Chrispy or Rich. Do you really think both combined posses the intelligence to craft this programme? it’s gotta be the workings of a higher being!

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