BC Hydro

What explains Site C policy?

BC Hydro’s own statistics prove the utility has no good business reasons to be building Site C. Domestic customers use the same volumes of electricity today as a dozen years ago and rapidly rising prices will ensure conservation continues to moderate consumer demand.

A decade ago, under old management, BC Hydro recognized that conservation was preferable to adding capacity. A conservation potential review identified almost 20,000 GWh/yr of energy savings that would be economically viable by the year 2020. That is four to five times the power that Site C might produce.

BC Liberals argue the new dam should be built, not because it is needed, but because it is providing jobs. That, of course, fails to account for financial damage to commercial and industrial enterprises hit with rapidly rising electricity rates. The competitive advantage of low cost electricity once enjoyed by BC employers has been squandered. 

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Prospective customers outside the province can buy or produce power at prices lower than Site C. In Alberta, energy consultant Larry Charach said there is currently a surplus of available power in Alberta, made worse by weak demand. B.C. energy ministry spokesman David Haslam admitted in 2015 that power has been available from the U.S. Pacific Northwest for 2¢ to 3¢ per KWh, which is about a quarter of the cost of Site C power.

British Columbia can require return of 4,300 GWh from the USA, its entitlement under the Columbia River Treaty. If it does not, the power will be sold to American utilities at a few pennies per KWh. The difference between U.S. market value and and the cost of Site C electricity could mean a loss of about $300 million a year.

But, under Liberal direction, construction is underway, despite unaddressed conservation potential, flat domestic demand, increasing supplies of private power, weak export markets and BC’s stillborn LNG prospects.

In addition, the price of alternative clean energy is falling. Bloomberg reported in 2016 that an Asian joint venture bid 2.42¢ per KWh to supply solar power to a utility in Abu Dhabi. Of course, BC won’t match that price but Bloomberg notes the cost of solar installations “have fallen almost 70 percent in the past five years.”

A British Columbia solar company told me this week, “We’ve seen module costs fall 50% in the last year or so, 25% in the last 3 months, with an expected drop of another 30% in the next year.”

In Tamil Nadu, India is now home to the world’s largest solar plant and it was constructed for less than one-fifth the per megawatt cost of Site C.

Cleantechnica reported another clean technology that is supplying power at about one-fifth of Site C’s expected cost:

“Wind prices are at an all time low, with newly built wind projects in the US averaging around 2¢/kWh  thanks to technology advancements and cost reductions across the wind industry…

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When obvious reasons for constructing very costly new hydroelectric capacity do not exist, we have to look at the less obvious. Commercial fraud is the worst explanation. A more innocuous one might be revealed by what author Frank Herbert wrote:

“There is little that bureaucrats hate more than innovation, especially innovation that produces better results than the old routines. Improvements always make those at the top of the heap look inept. Who enjoys appearing inept?”

American Admiral Hyman G. Rickover provided wise advice that BC Hydro executives should note:

It is a human inclination to hope things will work out, despite evidence or doubt to the contrary. A successful manager must resist this temptation. This is particularly hard if one has invested much time and energy on a project and thus has come to feel possessive about it.

Although it is not easy to admit what a person once thought correct now appears to be wrong, one must discipline himself to face the facts objectively and make the necessary changes — regardless of the consequences to himself. The man in charge must personally set the example in this respect. He must be able, in effect, to “kill his own child” if necessary and must require his subordinates to do likewise.


Fact check on Site C and clean tech, Dr. Eoin Finn, Vancouver Sun, May 2017:

B.C. Hydro’s grid has an excellent reliability record, comparable with peer-group utilities. By using hydro dams and their reservoirs as “battery” storage to complement intermittent wind and solar, grid stability and reliability would be unaffected, as has been proven in many countries with such mixed-source supply.

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Categories: BC Hydro, Site C

9 replies »

  1. A hydro bankruptcy and subsequent sale to private vultures might explain the pig-headed insistence on building this albatross, and of course, favoured contractors make out like bandits. The connivance of the Feds on this issue might indicate that there are larger forces at work than just the Clark Crime Family. Did someone mention that the completion of Site C might trigger a new set of rules for water export under NAFTA, or was that just an evil rumour?

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  2. Part of the reason for Site C is to provide addition backup capacity for all the intermittent IPP power.

    So, in addition to owing $56 billion + for IPP power, BC Hydro has to spend $9 billion for Site C.

    Ouch.

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  3. How the heck did BC Hydro manage to go BILLIONS in the hole on its pension obligations?

    BC public pensions are some of the best managed in the world, so it must have taken some shenanigans to get into this mess.

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  4. wild west Pay for/to play -thousands,millions, billions.
    privatize profit ..socialize debt.
    make it look bad then sell the asset.
    repeat.

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  5. The privatization of BC Hydro was always on former Premier, Gordon Campbell’s mind. His whole tenure in office was selling the province’s assets to corporate friends and insiders.

    TransLink was also planned to be sold off to private interests and why the government forced TransLink into having the Compass Card, as the compass Card would prove invaluable in apportioning fares between private operators.

    Privatizing the the R/T lines would be good business because they could charge high costs to the operating authority, The semi privatized Canada line being a good example. it costs the taxpayer about $110 million annually to operate or about 3 times more than a comparable LRT operation.

    Ridership is assured because bus customers are forcibly transferred to the light-metro, giving the appearance of high ridership, justifying the high operating costs.

    This is why the province has let TransLink “ramble-on” with its incompetent ways, to make the vast bureaucracy more salable in the taxpayer’s minds. The 2015 plebiscite saw 62% of the regional taxpayer vote no and opened the door for a sale, which I believe was going to happen if the Clark Liberals won another mandate.

    Now with the mobility pricing scam in full swing, privatization is a lot closer than most think and make the the new owners of transit even richer.

    There is no way that TransLink is being allowed to operate in its dysfunctional and incompetent ways, without an end game.

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  6. Estimated cost of Site C is about $9 billion, which is:

    9 Thousand Million Dollars!

    $9,000,000,000

    BC Hydro owes IPPs 56 Thousand Million Dollars!

    $56,000,000,000, or $14,000 for each British Columbian.

    BC Hydro’s debt (not including IPP power purchases) is 20 Thousand Million Dollars!

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