Written by economist Erik Andersen, republished with permission:
In 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.
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…