BC Hydro

BC Hydro deliberately failing to notice changes in our world

Written by economist Erik Andersen, republished with permission:

erikIn days gone by I did some forecasting (projecting) for both federal government projects and private ones. The word forecasting is a deceit.

Premier Gordon Campbell and company needed to fashion a fig leaf to cover the Independent Power Producer (IPP) program which was designed to give private investors indirect access to the credit rating / borrowing capacity of BC Hydro/BC Government. To provide cover, Government decided it would legislate a policy that required in-province generation capacity for every possible imaginable period of generation distress. That was for the supply side.

It then hired independent consultants to construct demand “forecasts”. The consultants knew what the game required and so delivered exaggerated projections of future demand. BC Hydro then could claim, and did, that the foundations of their “forecasts” were from independent sources.

BC Hydro and their consultants have not moved up the learning curve despite being wrong year after year for more than 12 years and sadly the BCUC has let them ride on this way. The consequence of being deliberately wrong for 12/15 years is the condition we now have.

Residential and small business rates up +70% with no increase in demand. We also have new contractual debts of plus $60 billion to IPPs, which we are not yet fully paying. All this comes when the globe is at the start of much innovation in both the production and consumption of electricity.

Investing in last century technology such as at Site C is to deliberately fail to notice the changes in our world. The Site C project is all about spending money to make a few friends wealthier, not about serving the public’s interest.

David Bond’s article in the Kelowna Courier covers this as well as other provincial financial misdeeds.

More evidence that the “economic rent chasers” are hard at work bulking up their investment portfolios with soon to be “stranded assets” . We in BC are still ahead of California in this race as  by now we are carrying about 33% too much in-province  generation capacity for the recorded demand from BC only customers.

Some people are making out like bandits and it is not most of us.

Californians are paying billions for power they don’t need, Los Angeles Times, February 2017:

We’re using less electricity. Some power plants have even shut down. So why do state officials keep approving new ones?

California has a big — and growing — glut of power, an investigation by the Los Angeles Times has found. The state’s power plants are on track to be able to produce at least 21% more electricity than it needs by 2020, based on official estimates. And that doesn’t even count the soaring production of electricity by rooftop solar panels that has added to the surplus.

To cover the expense of new plants whose power isn’t needed — Colusa, for example, has operated far below capacity since opening — Californians are paying a higher premium to switch on lights or turn on electric stoves. In recent years, the gap between what Californians pay versus the rest of the country has nearly doubled to about 50%. 

This translates into a staggering bill. Although California uses 2.6% less electricity annually from the power grid now than in 2008, residential and business customers together pay $6.8 billion more for power than they did then. The added cost to customers will total many billions of dollars over the next two decades, because regulators have approved higher rates for years to come so utilities can recoup the expense of building and maintaining the new plants, transmission lines and related equipment, even if their power isn’t needed.

How this came about is a tale of what critics call misguided and inept decision-making by state utility regulators, who have ignored repeated warnings going back a decade about a looming power glut.

“In California, we’re blinding ourselves to the facts,” said Loretta Lynch, a former president of the California Public Utilities Commission, who along with consumer advocacy groups has fought to stop building plants. “We’re awash in power at a premium price.”

California regulators have for years allowed power companies to go on a building spree, vastly expanding the potential electricity supply in the state. Indeed, even as electricity demand has fallen since 2008, California’s new plants have boosted its capacity enough to power all of the homes in a city the size of Los Angeles — six times over. Additional plants approved by regulators will begin producing more electricity in the next few years…

3 replies »

  1. It’s amazing what the BC policies (like the Clean Energy Act 2010) did to benefit the IPPs:

    First, claim a huge (phony) demand for additional power in BC.

    Make a rule saying all that new power has to come from BC (self-sufficiency).

    Limit power imports from US.

    Say the new power has to be clean and renewable (ie run-of-river, wind power IPPs).

    Say there has to be surplus of power in BC (insurance).

    Forbid BC Hydro from building small hydro plants.

    Limit power coming from Burrard Thermal.

    Exempt the Clean Power Call for new proposals from the BCUC act.

    According to BC Govt, a big justification for Site C is to manage intermittent IPP power.

    So exempt the $9 billion Site C from BCUC scrutiny.

    etc, etc



  2. BC Hydro is not “failing to notice” – they are ignoring the elephant in the living room, which all alcohol and other addicts’ families have to deal with. They are addicted to growth, LIberals to “power”.
    There should be a “tools-down” halt to Site C, and NDP/Greens pass an Order in Council to allow that. Renegotiate turbines and civil works contracts, for other dams and future work, turn the $470 million “workers camp” into a world class university, put the present workers on restoration and an “energy conservation corps” program, others on to hospital seismic upgrades, to save billions, our invaluable Peace River Valley and honour the First Nations Treaty Rights..

    Liked by 1 person

  3. A large part of the electorate has a baked-in notion that government and crown corporations are essentially inept when it comes to good business practice. The odd time news reaches the public through the major press organs about deficiencies, it’s generally attributed to poor decision making and treated with a shrug and the notion that “They’re all the same; what can you expect?” Too frequently incumbents are forgiven their almost expected behaviour at election time.

    Strategic theft from the public purse is an entirely different matter. The public will not stand for it. Savvy dishonest politicos and their appointed cronies are therefore quite prepared to assume the dunce cap rather than the robber’s mask to explain financial or service shortcomings, while ensuring the direct cost to the individual voter is carefully managed through subterfuge to remain below alarm levels. This would not be possible unless the press also assumes a dunce cap.

    Messrs. Bond and Andersen do a very good job of ensuring the participants here are appropriately attired.

    Liked by 2 people

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