Alberta based AltaGas is just one of a great many private power producers in BC but it has enjoyed special treatment from BC Liberals. In a March corporate presentation, the company boasted about the strength of its relationship with Government.
Christopher Pollon, writing in The Tyee, provided an illustration:
[AltaGas] negotiated an unprecedented 60-year energy purchase agreement with BC Hydro in 2010. Not only is the price secret, but the deal gives AltaGas full protection from inflation over 60 years by indexing power sales to the Canadian consumer price index. The company estimates Forrest Kerr will generate annual earnings (before interest, tax, depreciation and amortization) of $100 million when it opens in 2014.
As we see from the company’s presentations to investment dealers, the deals will just keep getting better for AltaGas until 2075.
It should be noted the Alberta company’s three power projects would not exist had not BC Hydro constructed transmission lines that allowed AltaGas power to be used. (The provincial utility declared costs for the Northwest Transmission Line and the Iskut extension totalled $885 million.)
In 2015, AltaGas told investors:
In 2015 we achieved $106 million in normalized operating income in our power segment, a 63% increase over 2014. This was driven primarily from the addition of Forrest Kerr and Volcano Creek. These assets more than offset the significant decline we saw in Alberta power prices, which averaged just over $33 per megawatt hour for the year compared to almost $50 per megawatt hour in 2014.
While BC Liberals and ardent supporters such as the Fraser Institute claim to favour free markets, private power contracts show how false the commitment is. We can’t know the price paid for AltaGas power in BC because contracts are secret but the amount is certainly more than three times the $33 per MWh market price paid in Alberta.
The above demonstrates why large businesses in this province are putting up big dollars to ensure Liberals continue controlling government. British Columbia is rich in natural resources but Christy Clark and friends are determined that profits should accrue to very wealthy friends and are not to be wasted on ordinary citizens.
Categories: Independent Power Producers (IPP)