BC Hydro

Falsehood flies, truth comes limping after it

The following article was first published in February. It is still relevant today because, despite a change in government,  agents of Site C beneficiaries continue to spread falsehoods trying to convince citizens that spending billions on a near worthless project is “good business.”


Besides, as the vilest Writer has his Readers, so the greatest Liar has his Believers; and it often happens, that if a Lie be believ’d only for an Hour, it has done its Work, and there is no farther occasion for it.

Falsehood flies, and the Truth comes limping after it; so that when Men come to be undeceiv’d, it is too late; the Jest is over, and the Tale has had its Effect…

Jonathan Swift, The Examiner, 1710

Dave Conway, BC Hydro’s Community Relations Manager for Site C, submitted an article to publications this week. It included these statements:

…our long-term forecasts show B.C.’s electricity needs will grow by almost 40 per cent over the next 20 years…

Site C is the most cost-effective way to meet our future electricity needs…

DeSmog Canada published a video with Harry Swain, chair of the federal-provincial panel tasked with reviewing the controversial Site C dam. From the DeSmog report:

I think we’re making a big mistake, a very expensive one,” Swain says in the video. “Of the $9 billion it will cost, at least $7 billion will never be returned. You and I as rate payers will end up paying $7 billion bucks for something we get nothing for.”

Since 2005, domestic demand for electricity in B.C. has been essentially flat, making it difficult to justify the dam which will flood 107 kilometres of the Peace River and destroy thousands of hectares of prime agricultural land.

“There is no need for Site C,” Swain says. “If there was a need, we could meet it with a variety of other renewable and smaller scale sources.”

Swain wrote an article for the Vancouver Sun that provided further information:

…With no domestic need for the electricity from Site C, the province has been pivoting from one illusory source of new demand to another.

At first it was LNG… Then it was a trade with Alberta… But the delivered cost of Site C power in Alberta would be $140 to $160/MWh, depending on its ultimate destination, or double the cost of local production.

…Realistically, all B.C. Hydro will be able to do with Site C power is sell it to the US, at spot market prices of $25 to $35/MWh. Under reasonable assumptions, the present value of twenty years of such sales would be about $1.6 billion, or 18 percent of the currently estimated $8.8 billion cost of the project. This leaves ratepayers with a stranded debt of $7.2 billion, for which they will get nothing.

[There are] two attractive new energy sources available to us. The cheapest is our entitlement under the Columbia River Treaty, some 1300 megawatts of capacity and more than 4,000 GWh of energy, bought and paid for long ago. At the moment, we sell it right back to the Americans at spot prices.

…Bottom line: B.C. Hydro is going hell for leather in pursuit of a wildly unprofitable project that will cost us, its owners, billions. And that’s without accounting for more “significant adverse environmental effects” than any project that has ever been approved before, nor for the further erosion of the treaty rights of the First Nations of the Peace.

Mr. Swain’s comments about consumption are not at odds with what is known by In-Sights readers.

2006-to-2016There has been no increase in the use of power by British Columbia’s residential, commercial and industrial consumers from 2006 to 2016. Yet, the quantity of the utility’s purchases from IPPs more than doubled and the value paid in 2016 was 274% of payments for private power in 2006.

Flat domestic consumption and increased IPP purchases left BC Hydro in a difficult situation. The only alternative to dumping surplus power on already oversupplied markets outside BC – and further depressing prices – was to reduce production in Hydro’s own facilities. That means “testing” spillways – dumping water without generating power.

2017-02-23

Admitting publicly to an oversupply would threaten BC Hydro’s entire capital expansion program.  Bureaucracies, by nature, hesitate to change course. But, when incorrect policies have been followed for years, new directions are fiercely resisted. Admitting to error is an uncommon strength. Crown corporations are further handicapped by directions from politicians who may have objectives less influenced by good policy than by the need to deliver benefits to friends and financial sponsors.

Toronto Star columnist Carol Goar wrote of comments by scholar Donald Savoie:

Bureaucrats don’t have the power to pull the plug and politicians seldom do it for fear of offending vested interests. “The problem is not that government is spending more on new things, but that it spends massively on old things.”

In British Columbia, the old things are conventional power systems; the new things would be conservation and safe renewables. Dr. Savoie, who had a very short career in government, complains that bureaucracies gradually lose sight of their fundamental purposes:

Front-line workers have been sacrificed to make way for offices full of paper-pushers, managers, supervisors and evaluators.

Professor Savoie offers a solution that agencies serving the public should observe. In simple words, the message is:

Figure out what you are supposed to be doing, then do it.

As I wrote in The Tyee, BC Hydro: From Public Interest to Private Profits, W.A.C. Bennett established this vital crown corporation to provide reliable, affordable power to British Columbians.

That’s what BC Hydro should be doing.

Instead, it is forcing citizens to pay much higher prices to provide financial benefits to foreign owned companies and a band of me-first IPP slicksters and a group of political contributors gaining returns on their liberal investments by sitting in the boardroom of BC Hydro.

22 replies »

  1. There has been a handtul of first class, expert critics reporting to the public on the “new BC HYDRO” since this government took over in 2001 and none more thorough or demonstrably accurate than Norm Farrell.. I’m not trained in their disciplines – my speciality is detecting political bullshit based, My training included hands on experience in the art in years gone by.
    BC HYDRO has been close to 100% political BS from the start and without letup.i needn’t add, that this has not been the political blather that’s the politician’s anticipated and discounted exaggeration that’s part of the ongoing circus but blatant and hugely expensive lying- there is no other word that works – which has not just featured horrendous unto unbelievable decisions but has, in a scheme where the dots are child’s play to connect, ruined beautiful and important rivers and left our Crown Jewel staggering under unbearable financial weight, it has transferred the loot, the peoples’ asset, into the pockets of pals and political cronies wallets. If I stopped there the newcomer to the issue would mo doubr be numb in disbelief but … then there’s Site C at a mere $10 billion or so to continue the publicly financed political psrty into the endless future.
    There are, no doubt, financial and management medicines to be applied but that is for others to prescribe. All I can safely say based upon my oen ecperience and acquired expertise in detecting bullshit, is that this entire debacle cries out, nay screams for a full criminal investigation, from 2001, by the Attorney-General’s ministry. Every expert agrees that this calamity can’t be put down to even the grossest mismanagement, though God knows there’s been that.
    No, the Attorney-General must do what all able and decent arrorneys-general must be able to do – walk briskly away from her political incarnation and direct a criminal investigation which could well include her colleagues when she’s a politician. Unfortunately, every indication is that Ms Anton is unable to honour this long parliamentsry tradition except in its breach.

    Ms Anton, when all’s said snd done, you have to live with yourself. Hearken to your oath, taken before God, and do your duty.

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    • Well said Rafe.

      Alas, Ms. Anton can’t even keep the British Columbia Sheriff Service staffed appropriately, and we now witness individuals charged with serious offences walking away because of it. She puts her oath sworn before her Christy before all others.

      We need a new sheriff in town, and auditions are being held on May 09, 2017.

      Liked by 1 person

  2. There’s the idea of Site C supplying clean energy to the non-existent BC LNG industry.

    When the LNG gets shipped to destinations in Asia, on GHG-emitting tanker ships, it gets burned, releasing GHG emissions.

    Some of the LNG would get burned in power plants like BC Hydro’s Burrard Thermal.

    The BC Clean Energy Act discourages BC Hydro from using Burrard Thermal, ostensibly because of GHG emissions (Sec. 13).

    The BC Clean Energy Act removes Site C from BCUC approval (Sec 7).

    http://www.bclaws.ca/civix/document/id/consol24/consol24/00_10022_01

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  3. If you were sitting at the cabinet table it is my guess there are two women ministers that do not have the clout to take on Christy. Both represent ministries in serious trouble. Ms, Anton and Ms Cadieau Stand up and demand more money and run your respected ministries like they need to be done. Simple, stand up and be counted, and if you can’t do that, get the hell out of there. DO YOUR JOB

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  4. The only plausible reason that there will be a 40% jump in electricity needs will come about because the BC Liberals are walking away from the table at the Columbia River Treaty, which must be renewed … coincidentally at the same time that Site C, which would be renamed as Site Christy Clark Damned comes on-line in 2024.

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  5. The trial-balloon suggestion of maybe selling Site C power to Alberta (at a substantial loss) has surely burst with the news that Kineticor has taken over the unfinished Shell plant at Peace River Alberta. They plan to finish it as a gas-fired cogeneration plant, producing more than half of Site C’s capacity… likely for only a few $ billion or less — and completed far sooner.

    https://peaceriver.ca/peace-river-welcomes-news-of-three-creeks-power-plant/

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    • With modern gas turbines, power can be produced cheaply and efficiently. We don’t need Site C but if we did need the power, a natural gas facility of equivalent capacity could be built for about 1/4 of the capital cost of the dam. It could be powered with natural gas that already belongs to the province and is being exported by companies mostly owned outside BC for near zero returns to the province. The gas needed for a turbine could be supplied at very low cost because the people of BC already own it and know exactly where it is. (The idea that drilling is a high risk, hit or miss situation is an inoperative myth.)

      Why export gas for someone else to burn if we can use it ourselves and eliminate the environmental costs of the dam and its reservoir?

      http://www.localpower.org/deb_tech_gt.html

      “For systems larger than 3MW, the gas turbine exhaust, typically around 540ºC, can be used to produce high-pressure steam, which then powers a second generator. Such combined-cycle gas turbines (CCGT) have electric efficiencies of 35%-55%. The pass-out steam from the steam turbine can be used to meet on-site heat requirements increasing overall efficiencies to 75% to 90%. This lowers electricity production, but improves overall economics. To improve electrical generating efficiency and reduce NOx it is possible to inject steam into the combustion chamber. Current production gas turbines have NOx emissions from 2 to 25 ppm, before external controls. Additional NOx reduction methods have been successfully developed for gas turbines, so where very low emission levels are specified, it is possible to attach end of pipe solutions such as Selective Catalytic Reduction (SCR).”

      Liked by 1 person

      • Or, how about this:

        During the upcoming BC campaign, Clark and Notley announce a power sale agreement for most or all of Site C’s output, which conveniently provides a justification for the project, makes it easier for AB to phase out coal-fired generation, and in the process, kneecaps John Horgan, who pledged to put Site C before the BCUC. Which then makes Clark’s re-election more certain, giving Notley a greater likelihood that the Kinder Morgan expansion will be well underway before her own re-election attempt.

        Win – Win!!

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        • The problem is that by the time BC Hydro delivers electricity to Alberta it will a need price of more than 10¢ a KWh to break-even, maybe one-third more depending on final costs of Site C and the needed transmission facilities.

          Alberta is not going to buy BC power on a firm basis when it can build its own gas-fired generators and commit to solar, where it has huge power potential. With advances in gas turbine technology and the declining prices of solar, Alberta could easily remain a net exporter of power. NOT an importer.

          The only way BC can sell power long term to Alberta is by providing a huge subsidy. So, yes we could do it, but, do we want to do it?

          Alberta has plenty of gas and more than 325 days a year (90%) of sunshine. The only thing that has stopped them from exploiting solar is the entrenched fossil fuel industry, which basically controlled the province’s government for decades.

          Liked by 1 person

  6. Hello Norm.
    Burrard thermal has SCR now. So really with the combined cycle upgrade we would have exactly what we need. Clean, economical, load centred firm power with peak shaving and transmission line failure capabilities. With a few more mods the facility could produce hot water for community heat as you indicate.

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    • Agreed. Burrard thermal could easily be upgraded to burn clean and provide peak power to the lower mainland at a reasonable price.

      However, I’ve heard that real estate developer friends of the Liberals are lusting after that north shore of Port Moody. There is a lot of land for residential development and it is very accessible. A bridge south to Burnaby only has to cross 1,200 feet. A bridge or causeway across Indian Arm has an even shorter water crossing.

      That region will not to be developed for residential uses in the next decade but it is a certainty for the 2030s. People with money and influence don’t want Burrard Thermal to be a part of the power equation.

      Could NE BC be the appropriate place for gas generation? Not just to power the urban regions but to fuel a return to agriculture.

      I’m wondering about gas generation plants in north-east BC with low cost heat and power available for agricultural use. Climate change presents major challenges to conventional food production and limiting factors to increased hot house production in SW BC are land and power costs.The North American market could be served from the areas where gas is plentiful.

      Liked by 1 person

  7. Hello Norm:

    It appears that Christy Clark has only one priority and it isn’t about telling the truth. It is about getting re-elected. If she doesn’t win, her face may appear on milk cartons that reads: Have You Seen This Woman?

    Could Christy be trading Bitumen Pipelines Playing Cards with rookie Rachel Notley
    for Site C Dam limited – First Edition posters?

    The bidding for these rare collectibles will start at $10 Billion Canadian.

    Christy Clark knows the NDP and Greens will take the Island and parts of Vancouver.
    Apparently, the polls quoted by Ron Cheffins (retired UVic Professor) “has the NDP at 37%, Liberals at 37%.” His interview is on Victoria’s CFAX radio (website) Pamela McCall February 24, 2:37 pm. He has studied politics since 1955. He has an interesting prediction about the voters in Prince George and Kamloops.

    BC Auditor General:
    The BC Auditor General is postponing information to the public perhaps preventing Christy Clark from mis-speaking the truth.( It is sad that the former BC Auditor General John Doyle’s character was entangled in a scandal that has finished his career in the State of Victoria, Australia.) He would have brought Christy’s lack of business ethics, non-existent environmental IQ and failing accounting skills to light.

    Why isn’t the BC Auditor General Carol Bellringer releasing an updated report on the Site C Dam during the election?

    “Bellringer cautioned she has no authority to overturn the decision to build the dam, but can find oversight errors, as well as gaps in reporting and the budgeting process.

    Bellringer doesn’t anticipate releasing any reports during next spring’s election campaign, and couldn’t provide a timeline on when her audit of the dam will be delivered.

    Bellringer will also audit rate-regulated accounting at BC Hydro, and the expenditures the utility has been putting into deferral accounts to be paid in the future.
    “The question with that is whether the deferral accounts are at a level where the plans are feasible, that the kinds of amounts that are being brought into the future.”

    https://www.biv.com/article/2016/9/auditor-general-adds-hydro-rates-list-reviews-alon/

    The local Dawson Creek Mirror identifies some information that has not been available to the public regarding the Site C Dam October 11, 2016:

    “… it highlights a number of “key gaps” in management of the project—including the potential for slides along the dam’s 83-kilometre reservoir, the low Canadian dollar and the need to keep a lid on contractor costs.

    includes 10 recommendations as construction on the dam’s main civil works begins. The $1.75 billion civil works contract includes some of the riskiest work on the project—including the 60-metre high earth fill dam, river diversion tunnels, spillways and the concrete foundation of the generating station.
    Hydro’s contract approach has already transferred risk “to the extent possible, over to the contractors,” the report notes.

    “Given that the parties contracted have not had extensive experience working together on major projects, additional oversight and reporting to ensure cost and schedule targets are met should be considered,” the report notes.

    Geotechnical and soil issues could pose problems for the project, including shearing along the wall of the valley and bedrock deterioration, the report found.

    Over a rainy summer in the Peace Region, opponents of the project have released aerial photos of dike-work and water retention basins carved into the north bank of the Peace.
    Whether slides of other geotechnical issues will delay Site C or blow the budget remains to be seen.

    Site C has $440 million in reserves set aside to cover the costs of unexpected geotechnical issues, according to the report. And although BC Hydro has conducted “extensive” geotechnical investigations throughout the valley, “it is impossible to understand every nuance of the sub-surface conditions of such a large site,” Ernst & Young found.”

    Is it a conflict of interest that Ernst & Young are major contributors to the BC Liberal campaign?

    – See more at: http://www.dawsoncreekmirror.ca/regional-news/site-c/review-gives-site-c-clean-bill-of-health-but-warns-of-slides-geotechnical-issues-1.2362851#sthash.ObL2Ad78.dpuf

    The Financial Post offers concerns about fracking near the Site C Dam:

    “There is no ban on fracking or drilling for companies that hold existing rights, but B.C. Hydro says it will work with the BCOGC, responsible for development and regulation of the natural gas sector, to effectively manage any risk, according to the report.

    This is the minimum that should be done, said report author Ben Parfitt, a resource analyst for the centre for policy alternatives.

    “If a dam were ever to fail, it would be absolutely catastrophic,” said Parfitt.
    Hudson’s Hope, a community of about 1,000, and several other smaller communities, are downstream of the Peace Canyon Dam.”

    http://business.financialpost.com/news/energy/b-c-hydro-concerned-earthquakes-from-fracking-could-damage-peace-river-dams

    Finally, Christy Clark declares that her Government is careful with its spending. Here is an example of her million dollar taxpayer funded photo ops have bought:

    It included $5,413 to send a photographer to Paris last November to take pictures and videos of the premier at a UN climate-change conference.

    Let’s break down some of these numbers:
    Since Clark became premier in 2011, the government has spent more than $3,500 a week on social-media photos and videos. That’s more than $500 a day, every day, for the past five years.
    How does this square with Clark’s campaign commitment to control government spending?

    “Controlling government spending is the foundation, it’s the bedrock, of what we’re trying to do,” Clark says in her newest Liberal Party TV commercial.”

    http://theprovince.com/opinion/columnists/mike-smyth-premier-clark-has-spent-nearly-1-million-on-photography

    Liked by 1 person

    • Art’s is a long, thoughtful and useful comment. We have other examples here of contributions that further our understanding and information.

      Thank you people..

      Liked by 1 person

  8. Norm, you have stated a number of times that more people read your blog than comment on it. I don’t doubt that one bit, but how many more? Just reading today’s posting has infuriated me to the point bursting a blood vessel! I’m as close to Rafe’s age as you can get without being committed and I’m ready to pick up a pitch fork, but I need someone to get my back!
    Admittedly, the younger generation is busy with their job, families, the odd night out and other priorities that younger people have, like staying out of jail. I too was young once and politics weren’t my first priority, but dammit the current crop of politicos are enough to drive one to drink, if you’re aware of them.
    I have been aware of these misfits and their cronies for the last ten years, I complain regularly and I’m beginning to feel a little hopeless, and helpless. There was a time when I would have considered abandoning my fellow BCers but that was preTrump.
    Sorry for the rant, but I’m getting the feeling that we’ll see 2013 all over again, and that almost did me in.
    Anyone, what can we do?

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  9. Hello John:
    Don’t let it get get you down. There are some very good, honest and thoughtful politicians out there … they just don’t happen to be Liberals at the moment.
    So, what difference can one person make?
    I attempt to write an email to our local Councils, the CRD or a candidate on a daily basis. Include a clip and a link to a newspaper article that got you engaged and maybe it might educate them. A letter to the editor, with a dash of humour gets your opinion in front of several thousand voters. It just takes one vote to beat the others.

    Today, I sent Norm’s Insight column to a Green and a NDP candidate. One responded, hopefully they will share it with their members.

    Turn off the Liberal TV ads and turn down the hydro thermostat … no sense supporting Corruption.

    True story: Two years ago, I asked a decent rookie candidate for 100 of his brochures. I don’t like going door-to-door so I duct taped them to the rural mailboxes in our area. I also visited a wealthy benevolent fellow who had been treated badly by some local politicians.
    He made a generous donation to the unknown candidate.
    The outcome: The fellow was elected and beat the 20 year incumbent.

    The fun part is … no one knows me – well some do – but they like what I write. It’s like being invisible while being able to educate those who spend the taxpayer’s credit card.
    Turn your anger and frustration into power … not like Hydro, but more like green renewables.

    Take a walk along the beach or a walk in the forest. They’ll be here long after Christy’s Gang are gone.
    Norm and Rafe and fellow subscribers are succeeding in getting the message out.
    Art

    Like

    • Thanks Art. I get up in the morning, the sun is shining, the birds are chirping – it’s going to be a wonderful day! Then I sit down at the computer while the coffee is perking and the eggs are cooking and all of a sudden it isn’t as glorious. Yesterday’s stories of malfeasance jump out of the screen and cast a grim picture that’s ingrained in my psyche.
      I feel as if I’m tied to the rails and this Liberal train (it can’t be BC Rail) is lumbering down the track – there’s not a thing that I can do, until May 9th and then it will be all over.
      You’ve managed to boost my moral somewhat. I think I’ll search out an ABC candidate in my riding, if there is such a thing, and then go door to door.
      I’m amazed at the number of people that know nothing about Site C. the Massey Bridge, in fact anything. Should be a slam dunk! Wow, I feel better already!

      Like

  10. The liberals I think are purposely driving BC hydro deep into debt so they can make a business case to sell the crown corporation.Alex Tsakumis touched on this subject in his blog.We miss you Alex come back.

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    • Hey born, Did you not read the Victoria Times column? The National Energy Board says this ability to buy low (Alberta’s surplus energy) and sell high (to BC energy ratepayers) is the reason Hydro created a $200 million PROFIT for the first six months of the year….”This pure arbitrage enables Powerex to contribute millions of dollars each year in profit to BC Hydro’s bottom line”. (Without Alberta’s largesse there’s a distinct possibility BC Hydro might not be profitable? Thank goodness for Alberta! I thought they were one of the reasons for Site C, or was that LNG. It’s awfully hard to keep track without a programme!

      Like

    • I disagree. The present condition of BC Hydro works perfectly for financial elites who hold power over BC Liberals. Profits flow to the private sector but the current and future losses stay firmly in the hands of taxpayers.

      As a private corporation, BC Hydro would have to follow GAAP. As a government entity, it can utilize “midnight orders-in-council” to change rules for financial reporting and seemingly turn dust to gold. The people of BC can be stolen from and few people bother to notice.

      Lucky for Liberals that it has the major newspapers and tv news operations on side. We thereby see what millions of dollars of government advertising can achieve, It may not win hearts and minds of voters directly, but it wins the hearts of media executives.

      Like

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