BC Hydro

Minimum transparency

According to BC’s Budget Transparency and Accountability Act, September 15 was the final day for BC Hydro to make public its quarterly report for the period ended June 30.

It was released October 16, which was the first business day following conclusion of the final technical presentation session regarding Site C before the BC Utilities Commission (BCUC).

That meant people appearing at BCUC’s community input hearings in September and early October only had financial information for the utility that was six months out of date.

Why is this important?

Because BC Hydro spin doctors has been claiming the $9.4 billion dam is needed to address steadily growing demand for electricity in British Columbia.

In winter, BC Hydro staff issued news releases about “unprecedented demand for power” because of cold weather. In summer, they issued a news release headlined, “Soaring temperatures lead to increasing demand for power.”

To casual observers, those unchallenged statements in corporate media seem to justify the costly expansion of BC Hydro’s generating capacity. Yet, analysts examining the crown corporation’s actual power sales know the truth is different than what is echoed by spin doctors and dam building contractors.

The quarterly report that finally appeared after Site C hearings reveals no growth in demand for electricity by consumers in British Columbia. This is an illustration, with the most recent numbers taken partly from the belated BC Hydro quarterly report:

Q1 Compared 2007 to 2017 520

Despite a reduced need for domestic power, BC Hydro’s purchases from independent power producers (IPPs) have been growing steadily.

IPP Quantities 520

Readers should ask BC Hydro and Minister Michelle Mungall why the utility is acquiring more private power just to export it for 1/3 of its cost or worse, causing BC Hydro to turn off its own generating capacity because of a surplus. The cost to ratepayers is material. In fact, the better part of a billion dollars a year:

IPP Cost 520
The quantity of private power purchased is rising but so is the unit cost. This occurs because IPPs have inflation protection and have been getting higher prices each year. (Hundreds of thousands of workers and pension recipients in BC have no such guarantee.)  Until Gordon Campbell’s friends mounted a raid on profits of BC Hydro, electricity rates in this province were kept down because legacy generating stations had low fixed costs and few variable costs.

Price Paid IPPs 520

For years, citizens have been played for fools by the people in charge at BC Hydro. This was allowed, even encouraged, by BC Liberal Governments and has gone largely unexamined by pundits covering politics for corporate media. They appear to do no original research and instead source material from vested interests who profit from misinformed voters.

I had hoped the new government would take immediate action to bring BC Hydro under control. The NDP removed Christy Clark crony and Liberal campaigner Brad Bennett from his role as Board of Directors’ Chair and replaced him with Ken Peterson, a respected energy executive.

They also fired CEO Jessica McDonald, a long time Liberal apparatchik with little background in utility management, and Jack Weisgerber, a 77-year old best known for leading the failed Reform Party of BC years ago.

However, most of the directors remain in place and the new President and Chief Operating Officer is Chris O’Riley, whose primary job has been directing Site C planning and construction. So, most of the team responsible for BC Hydro’s decline remains in place, ensuring the utility’s organizational inertia continues.

It’s not a prescription for needed change.  The road to disaster continues unless the Horgan Government is brave enough to choose a new direction.

inertia 380

Categories: BC Hydro

13 replies »

  1. Hello Norm:
    If John Horgan doesn’t have the courage to kill the Site C Dam … then the NDP party will be as extinct as the dinosaurs that once roamed the Peace River Valley.
    Only their footprints will remain at base of the Dam – their legacy will be forgotten.
    Their debt will never Rest in Peace.

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  2. Hello Norm: I too am less than impressed by Minister Mungall, In opposition she always impressed during Question Period. To date she has not demonstrated a willingness to make meaningful change. Continuing to waste ever more tax dollars on “run of river” is not what I expected. I hope they get their act together….and soon. Keeping upper management at BC Hydro who were nurtured in the BC Liberal tradition seems a major fail.

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  3. This damn dam best be put to rest once and for all. Premier Horgan, you know what must be done, do it. Never mind the whispering, do what the majority of people expect to be done. Save millions. This has been studied and ruled on many times and the answer is simple, pull the plug.

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  4. Thanks to reader Barry for pointing out that I had marked both bars in the chart showing IPP costs as 2007. The correction is now made and shows the first bar ($97 million) as 2007 purchases and the second ($315 million) as purchases in the most recent three months reported in 2017.

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  5. Heres what may happen
    if NDP continues site C -greens may walk
    cost overruns may cost NDP next election esp if credit agencies lower BC credit rating along with rising interest rates on outstanding debt.
    Check-Keeyask .Muskrat falls,Bipole 3
    It will be the fast ferries 20Xtimes over.
    I hope BCUC and Auditor General of BC takes notice of the ,possibly deliberate ,law breaking delay?,1st quarter BCHydro financial report til shortly after BCUC sitc C BC public input tour ended.

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  6. Get rid of Site C! Every appliance we purchase has all these “electrical usage help ideas and we are wonderful messages” however, I have found that just using my own common sense has been more useful. I have reduced my usage. However, with BCHydro’s continuing line items charging me for “this and that other” I find that my bill is not as low as it should be, and yet my usage is way less. I spend time in the US during the winter and I see the same types of charges for “this and that and the other” which is where I believe Gordo got all his ideas from. We have been Hydro customers for years (since Mr. Bennett took over from the privately operated BC Electric, and all I see is more and more billings for everything and sundry that do not bill me for usage, but me for everything BUT usage. I blame Campbell for this, since he visited Arnold in California to get ideas on how to scam all BC customers these “add-ons” that contribute to our ever increasing Hydro bills. I don’t mind paying for the electricity I consume, but I object to having to pay for Campbell’s contract for administrative costs that he signed with American companies to operate BC Hydro on our behalf – I think the contract was for 30 years. I don’t know what his payback was, but I suspect it was not insubstantial.

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  7. I understand that lack of action is an action in itself. I can see that the case for Site C and large expensive IPPs is, for lack of a better word, grotesque. Various environmental, indigenous, consumer, and energy advocates have been fighting for many years to have a BCUC examination of Site C. What we got was only a partial Inquiry, but the case against this boondoggle is strong enough that even with this limitation we should be able to convince anyone with an open mind.

    Most of the data available so far from Hydro and most of the policy directions that they follow is old school. I also hope the new Government has the courage and the intelligence to bring this all back under control. I haven’t seen any sign yet that it isn’t.

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  8. Let’s cut to the chase. The election campaign is over, its time to put up or shut up. Appointing under achieving ministers to portfolios they barely understand is a great way to placate the wings of a party during a leadership debate but when the rubber hits the road Rafe Mair said it best ” it’s the square root of sweet fuck all ”

    If this ( or any government) wants to succeed the path is simple – make things better.

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  9. I have voted NDP all of my voting life…approximately 48 years. I’ve taken part in elections doing whatever needs to be done, and happily so…win or lose. I had great hope in Mr. Horgan as the leader of the NDP, and as someone supposedly ready to right the wrongs of the past 16 years. Sadly, it appears to me that he is no different than the rest of the troughers. Just say whatever it is the people want to hear (yes, there will be an inquiry into BC Rail, with consequences – among many other promises) already being broken.
    You know what has to be done John, you explained it well on the campaign trail…yet seem to have forgotten it already! Or not.
    I’m going to echo your son…”whatcha gonna do about it?”

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  10. It is going to take a strong minister, supported by the Executive Council and inarguable facts to turn the BC Hydro ship around. Strength can be shown by resisting cries for an immediate lynching when what is required is a proper trial; as long as you arrange the trial. But weakness is demonstrated if no action is taken when clear evidence shows it is the minister’s duty to act.

    One inarguable fact is that someone at BC Hydro is responsible for contravening a provincial statute. Minister Mungall contravened the same statute by not explaining immediately why that happened. She now owes the public an explanation. Who is responsible, what were the circumstances, and what specific remedies does she propose? Citizens of this province voted for change. Absent immediate action on this matter, she is no better than Bill Bennett.

    On the other hand, another inarguable fact is that the Site C project is now properly before the British Columbia Utilities Commission for determinations on specific issues. Those imminent determinations will provide the NDP government with facts and recommendations that can be used as support for whatever action it decides is in the public interest. Having put the project before the Commission, it would be extremely imprudent to act before those determinations are in hand.

    While waiting for the BCUC Site C determinations, Minister Mungall should be free to demand (through the current CEO) some answers from the existing directors and their spin-doctors. Why the continuing lies to the public regarding demand? And why the continuing purchase of private power at a loss? Their answers should determine their tenure, and both the answers and the resulting tenure will be an indicator of Minister Mungall’s strength.

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  11. After sixteen years of BC Liberal government some champing at the bit to undo the worst of its perfidies is to be expected. And I, too, feel the new NDP government’s feet should be held to the fire more severely by its own supporters than anybody else. But, it being early days yet, and the BC Hydro file being the NDP’s biggest, most complex, to say nothing of the urgency forcing its priority on a novice administration that has plenty of marginally less urgent files to attend to as well, it’s probably premature to threaten electoral revenge if the NDP doesn’t affect a Robespierre tout de suite.

    It would betray partisan score-settling if the NDP were ever to affect anything that looked remotely like an indiscriminate witch-hunt. In BC Hydro’s case, it would also be inappropriate for the government to presume anything about what to do next before the BC Utilities Commission has finished its present inquiry. It won’t be long now.

    The NDP could score a lot of points against its partisan rival, but it shouldn’t be tempted into cavalier frenzy by the embarrassment of riches the defeated BC Liberal government has left behind in the form of records and evidence not yet public, of neo-right ideologues stacked onto the boards of public enterprises, and of crony parasites whose “dividends” help bankrupt those enterprises. These riches should be as carefully husbanded as the hides of the Doomsday Book, not only to return the public enterprise to sound footings, but also to doom the BC Liberals’ chances of ever getting elected again. They’re still official opposition so the work is far from finished, in fact it’s only just begun.

    Years ago two local old-timers told me how, back in the 50s, somebody shot a cougar here on the Island which was an occasion to celebrate with a dance at the community hall where the ghost of honour was laid out on a table; both old-timers agreed, however, “you couldn’t get away with that nowadays,” acknowledging the diversity of sentiments around the issue of hunting that’s established in the community in the years since. Similarly we have a diversity of partisan prejudices built up over the past couple of decades that might have blinded BC Liberal supporters, for example, to the many fundamental, ethical breaches inflicted upon, say, BC Hydro by their favourite party. There will be chauvinistic rejection of revelations gleaned from the remains of the BC Liberal regime if they’re perceived as mere partisan point-scoring and score-settling. Since not everyone has been as factually well informed as Norm’s readership, it’s important to prosecute what breaches of trust might be discovered in light of the offence, of facts, not of political ideals. Wholesale firings, customary when governments change in many places, would obscure the important distinction.

    The BC Liberal record must be carefully unraveled, first so’s not to spoil evidence which has doubtlessly been tampered with to obscure breaches of public trust and frustrate any attempt to reverse the neo-right agenda of beggaring public enterprises. But ultimately voters should be shown how the BC Liberals’ indictments are legal and ethical in nature and that they offend and harm everyone in BC, regardless his or her partisanship. Unpacking the BC Liberal record should therefore be as methodical and forensically impartial as possible. There should be cogency, in those terms, with respect the dispositions of public enterprise staff appointed by the previous government.

    So, while asking for some slack for the new government, I agree heat needs to be kept focused on the NDP so it doesn’t cave to the considerable faction of pacifists in its ranks, always ready to turn the other cheek and disdain political aggression on principle. Even these positions on the friendly end of the field of ideological diversity need to be reminded that the unpacking of their rival’s perfidious record isn’t merely an uncouth partisan grudge match, but rather it is justice seen to be done on every citizen’s behalf, regardless partisanship. It is critically important that one of the main goals of this mandate remains to clearly indict the BC Liberals on ethical and legal, not partisan, grounds. Optimally, judicial inquiries of one kind or other, in as many numbers as legal circumstances warrant, will be getting heard when the next election rolls around to remind everyone that conspiring to break the public trust earns anyone or any party opprobrium, indictment and, eventually, conviction.

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