According to Financial Post writer Geoffrey Morgan, BC Hydro sent an October 3 communication to the BC Utilities Commission (BCUC). The letter explained why it continues to forecast a surge in electricity demand, despite a dozen years of flat sales to BC consumers.
Hydro claims it is forecasting new demand by companies that are not committed customers but have made inquiries:
- Shell’s LNG Canada (Kitimat)
- Sukanto Tanoto‘s Woodfibre LNG (Howe Sound)
- Future expansion of FortisBC’s Tilbury LNG storage facility.
In addition, in a redacted section, the utility claims another, unnamed operation is exploring a fourth project.
Skeptical people might remember Liberal claims that 20 LNG projects were on the boards just a few years ago and wonder how the market economics that caused most to be abandoned are different for the remaining few.
I also find it revealing that BC Hydro’s demand growth claims have remained more or less the same whether there were 20 prospective LNG operations – some of them rather large – or the three noted above, two of which are small.
In fact, BC Hydro has been married to “40% growth over 20 years” projections for a very long time. This despite no growth in sales to BC consumers for a dozen years and the addition of private power sources during that time equal to almost double the output of Site C. That doesn’t account for increases in Hydro’s internal capacity through additional production from Revelstoke and other generator upgrades or additions. (Additionally, the Canadian Entitlement of downstream Columbia River production could be returned.)
Those factors have resulted in surplus power that can only be dumped at a fraction of the prices paid to private producers. Unfortunately for ratepayers, more private power suppliers are coming on stream soon, while others have been paid to not deliver electricity.
At one point a BC Hydro executive told me that, while the volumes of domestic power sold each year were not increasing, peak demand was growing. However, when I reviewed years of reports published by the utility, it was soon apparent that peak demand has remained stable for years.
How many explanations have we heard to justify Site C?
My favourite was one voiced a few years ago by the then Liberal Energy Minister Kootenay Bill Bennett, who apparently missed the fact that lighting, small motors and electronics use about one fifth the power of devices when he was cognizant of energy matters:
There are new and increasing uses for electricity: electric cars, the things that we tape our favourite television shows with, our phones, our iPads, our laptops, etc.; a lot more electricity being needed.
Christy Clark’s Liberal Government stated that Site C was needed to feed new industry but the province, like other regions of North America, has been moving toward a post-industrial economy. In British Columbia, the proportion of jobs in goods-producing enterprises has been in decline with heavy industries, typically large power users, accounting for most job losses.
Conservation, of course, is the solution able to modify demand growth further. Economists argue about exact demand elasticity of utility-supplied electricity but it is clear that higher prices result in users reducing usage and turning to alternative supply sources. These are increasingly available at prices that allow reasonably quick capital cost recovery.
We should also be interested in knowing that, while Site C power will cost from 9¢ to 12¢ for each KWh, BC Hydro is scheduled to sell electricity to LNG operators for 5.4¢ a KWh. Other large users of power, particularly the mining industry, also pay electricity prices far below BC Hydro’s marginal cost of power.
It appears BC Hydro’s plan is lose money on every watt of private and Site C power sold, but, with fingers crossed, they hope to make up the losses with volume.
Site C contractors recently laid off many of the worker resident at the job site. There will be no better time to suspend the project.
Delay means even larger losses for taxpayers.
it’s certainly profitable to lie, who is being paid? can’t be the personnal of bc hydro.
i guess we don’t have a supreme court that’s alive any longer like in portugal so people have the faith to be inspired about justice.
to combat corruption is a learning curve for us all. otherwise it goes on and on.
politicians ought not to be afraid it will reflect badly on them.
the fog is so deep in the media it’s like their drugging everyone who reads it.
you can see the implosion of this business philosohy in england with the imploding tory party.
it’s simply unprofitable for the working of democracy.
civility is here.
Sponsored by CAPP and co?
Like the Liberal Pirates pumping of promised LNG riches that never materialized – BC Hydro electrical demand forecasted growth has in fact been a long running fiction. This fiction has put the ongoing solvency of our largest crown corporation into serious question (to be compounded if Site C is not cancelled). Like BC LNG, BC Hydro history under the BC Liberals has been hyped up partisan politics over sound enconomics.
If an investment firm were to have continued to generate and hold on to forecasts and a plan that has proven to be so wrong for so long… they would be in big trouble, losing clients, money and approaching insolvency. That’s the real world but for BC Hydro and the Christy Pirates, well it wasn’t real world, it was all political, grow their self interests and let us lowly now precarious peons pay for their hubris.
O/T….57 large water detainment pits (actually storage dams up to seven stories high have been built in NE BC for LNG fracking. Built without permits, certification, FN input etc… another truly Wild West corporate capture of the pay for play Pirates. This would be very easy to investigate and prosecute. It would clearly show just how the Liberals colluded with their corporate sponsors. If it is not called out with consequences it will surely happen again sooner than later.
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I believe Horgan has played his hand sensibly. If he (the NDP) were to shut the project down you’d never hear the end of the wailing from the anti-NDP faction (blind Liberal supporters). Allowing the BCUC to call the shot, even at the expense of another 6 months of wasted effort, was the smart thing to do. Then, after the dust settles, go after the perpetrators including jail time if it so be. There’s gotta be a ton a dirty laundry somewhere. Then on to the Corrupt Casino Case!
Submitting a letter to the British Columbia Utilities Commission using “inquiries” by the three entities listed as your demand forecast is akin to applying for a job with a note from your mom as your curriculum vitae.
I agree with John on this one..it might take longer, but the truth may be better accepted by libsheep coming from the Utilities Commission.
As for the dirty laundry? That started with Gordon Campbell, and continued for 16 years! I don’t for one moment believe that all those trips back home from England were mere visits…and Clark didn’t work on her own. Follow visit dots…as well as the money trail.
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This line puts it into perspective, “It appears to be BC Hydro’s plan is lose money on every watt of private and Site C power sold, but, with fingers crossed, they plan to make up for the loss through volume.” But, but, but, there will be more income if we can sell more…. 🙂 OK, maybe not per dollar invested, but you know, overall. sort of.
Our house consumes 15kwh a day,usually we do not use the dryer and the home is heated with natural gas,so hot water,TV on or stand by,electronic devises that draw little but are on 24 hours a day,some lights,and the stove top,thats about the same as a electric car would use in a day of doing a few trips about town,a commuter car would use up 4 to 5 times this much,if there are a million cars in the province that 15 million kilo watt hours of electric car use,The site c will put out 680 mega watts or 680,000 kilo watts,thats the math i come up with,i maybe completely off but looks to me site c will be more then used up with a electric car fleet.