BC Hydro

Them vs us

Disputing parties in arguments about Site C belong to either of two camps. One is populated by people wanting a share of the billions of dollars to be spent; the other by people who will be forced to pay the huge sums.

I’ve seen claims that Site C is needed because of inexorable demand growth, ignoring evidence of BC Hydro’s consistent dishonesty about the consumption of electricity by BC residents and businesses. The utility’s forecasts conflict with their own domestic sales records.

An uncomfortable truth for Site C proponents: BC Hydro’s most recent quarterly report of shows that, even with declining use of electricity by heavy industry, other demand has been flat for more than a decade.

sales 480

I’ve seen claims that Site C is the cheapest alternative source of power, but proponents set the value of impacted Peace River lands at zero and ignore the trends with wind and utility-scale solar power elsewhere. (Keep in mind that Site C electricity will cost between 9¢ and 12¢ per kilowatt-hour.)

Per a press release from the Centro Nacional de Control de Energía (Cenace) of Mexico, the department received bids for 3TWh of solar electricity, with the lowest bids being 1.77¢/kWh coming from Italian multinational ENEL Green Power.

This record low price of electricity on earth, just beats out the 1.79¢/kWh from Saudi Arabia, and is part of a pattern marching toward 1¢/kWh bids that are coming in 2019 (or sooner).

I’ve seen none of the Site C proponents explain how further conservation of power is not the cheapest way forward of all.

The governing party was aware of these facts prior to the May election. While I don’t argue with the need for extensive review, by foot-dragging as they are doing, elected officials are imposing further burdens on ratepayers. Citizens would be better off if John Horgan’s team was spending time and energy on elimination of private power contracts, a larger financial drain that results in no capital assets for the public in return.

 

Categories: BC Hydro, Site C

13 replies »

  1. Quote:
    “The disastrous legacy of this government policy agenda remains today. BC Hydro is awash in liabilities that have built up over the past 16 years.
    The Crown Corporation that used to provide over three quarters of a billion dollars in revenue annually to the province, while maintaining among the lowest hydro rates in North America, is no longer capable of making the significant contribution to the provincial economy it once did.
    BC’s competitive advantage in electricity rates is a thing of the past, and ratepayers will be assessed increases above the rate of inflation for many years.
    Regrettably, BC Hydro will continue to purchase large volumes of private power at exorbitant prices for generations to come due to the locked in ‘take or pay’ contracts it has signed.
    Even more deplorable, BC Hydro does not need this power and will continue to dump much of it in the energy market at a fraction of what it is paying for it.”
    From:
    http://www.policynote.ca/sticker-shock-the-impending-cost-of-bc-hydros-shift-to-private-power-developers-ten-years-on/

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      • BC Hydro has long had arrangements to purchase private power. For example, a number of years ago, the utility was buying electricity from Alcan’s Kemano station for about 5 cents a KWh. However, under Gordon Campbell’s Liberals, supplies from independent power producers (IPPs) accelerated after 2007.

        Some of those older private purchase arrangements have moderated the average price reported by BC Hydro for its IPP purchases. Because of that, newer contracts are even worse than they seem.

        Despite the fact that domestic sales were not increasing in BC, IPP purchases have been growing steadily. In 2017, the value of IPP purchases was $850 million higher than in 2007. That’s a very large financial hit, considering that BC Hydro’s residential and business consumers used less power in 2017 than in 2007. (Note, I initially reversed the years, a mistake caught by reader Barry.)

        This disaster was born in the early days of BC Liberal rule, Gordon Campbell’s people believed a profitable export market was available in the USA. They encouraged private producers to enter the business and moved BC Hydro’s transmission facilities out of the utility into a new corporation that was to serve the private companies on the same basis as BC Hydro.

        However, prices in the American markets that attracted Campbell and associates were based on fraud. After Enron misconduct was exposed, markets stabilized. Suddenly, potential IPPs worried about business risks if they were going to sell into free markets. The solution worked out with Liberals was to have BC Hydro buy all of the private power at levels that guaranteed profitablity (protected with inflation escalators too) and let the public utility sell it into the marketplace. That tranferred all business risks to the public and left IPPs with profitable businesses.

        Liberals didn’t understand the scale of risk they were assigning to the public since they expected demand would continue rising, as it had done before 2005. That miscalculation has cost BC Hydro around $5 billion and will cost many billions more.

        Liked by 1 person

      • This is a very good question.

        Many BC residents may be new, or may not be aware of what has happened to BC Hydro since 2001.

        BC Hydro is a Crown Corporation, owned by the Province of BC.

        Publicly-owned, the idea was to provide the benefits of low-cost, reliable hydro power to BC residents and businesses. This has changed.

        Energy policy and legislation since 2001 has given huge benefits to private power producers, at publicly-owned BC Hydro’s expense, since 2001.

        One example is the decision to mothball Burrard Thermal.

        Another is the idea of energy self-sufficiency, ie: fewer power imports.

        Another is not allowing BC Hydro to build new projects (except Site C and additions to existing plants).

        Factor in the erroneously high projections for power demand growth in BC and you see the huge benefits to private power in BC, always at BC Hydro’s expense. The above points were used to justify increases in power purchases of private power by BC Hydro.

        BC Hydro owes over $56 billion for power from IPPs in long-term contracts going into the future.

        That is 56 Thousand Million Dollars. !!!!!!!

        Costs to BC Hydro will eventually be passed onto BC Hydro ratepayers and BC taxpayers.

        Publicly-owned BC Hydro has been hijacked by the private power industry. The BC Liberal Govt, in power from 2001 to 2017, allowed this to happen.

        The BC NDP governments needs to throw out the energy policies that are still around from the previous govt.

        Liked by 1 person

        • Why don’t we hear anything about these private power contracts in the news media for so long ? I emailed John Horgan about my opposition to site C based on Dr. Harry Swain’s and Robert McCullough’s recommendations. But it looks like the reality of the private power contracts are largely unknown in the NDP caucus and the stop site C camp (PVLA and PVEA).

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          • Not so. In his speech to the NDP convention in Victoria early in November, John Horgan talked about the financial burdens imposed on BC Hydro by private power contracts. The difficulty they face is in finding a way to change the status of deals signed under Liberal rule. At least BC Hydro suspended consideration of new deals after the change in government.

            Action can be taken to enforce contract terms strictly and to apply environmental regulations with diligence. That might allow termination of some arrangements but government cannot make a public announcement they are about do everything possible to sabotage business relations that exist with private companies. The inevitable court action would cause a price to be paid.

            My concern is that the pundits working for the corporate press (including CBC) know about the IPP disaster but fail to report on it in any substantive way. One of the reasons is that the IPP producers association (now calling themselves Clean Energy Association of BC) have courted Press Gallery poodles. Those relationships were intended to have news people join the team that sells private power as good for the citizens of BC. The IPP efforts succeeded.

            Explained here: https://in-sights.ca/2017/07/23/careless-or-captured/

            Liked by 1 person

      • Another factor is the Govt’s fixation on growth. Govt needs GDP and population to grow, every year, forever.

        That’s one way they deal with ever-growing growing debt. Debt is measured as debt to GDP and debt per capita ratios. So GDP and population must grow every year to maintain the ratio. This means more power demand.

        The fact that infinite growth is impossible doesn’t seem to occur to Govt.

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  2. Hello Norm, thanks for not taking your foot off the accelerator. Our Liberal friends belong to the camp who has first hand knowledge repeating lies often enough eventually converts them into fact. We are duty bound to shine the light of truth on them at all times to prevent those lies from taking hold.

    Liked by 1 person

  3. Norm says: “I’ve seen none of the Site C proponents explain how further conservation of power is not the cheapest way forward of all.”

    Over at Blair King’s site, he admits that (other than himself), the pro-Site C camp has done little than parrot the BCLib/Hydro talking points. He ponders: “Wouldn’t it be nice if the people supporting the project put in the sweat equity that the opponents of the dam have been contributing?”

    Liked by 1 person

  4. Speaking of Capital assets, there has been some talk about the Government absorbing the cost of the mistake that the Liberals have dropped on our necks. I can see that since at least in theory, we are the ones who let the Liberals get away with this. But the good news is that there are assets to be gained out of this that will benefit the local area, A buy out of Hydro and any contractor assets on site such as the work camp, the roads and bridges built would keep some of the money at home at least.

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  5. Given that the issues associated with Site C are so multi-faceted and complex, it is refreshing to see a short piece like this, tackling a snippet of the arguements. Easy for people to absorb and I look forward to sharing out the next one! 🙂 Thank you for all your articles on this Norman Farrell.

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  6. Some of the NDP’s current agonies, divisions and hand-wringing may be due in part to having tried in recent years to avoid Site C. The party’s website’s few pieces about it were few and far between, mostly to do with labour jurisdictional issues or the Power BC program. A few MLAs and critics came to the Paddle for the Peace, which was great, but not the leader. It didn’t look like a priority issue, even though it’s the biggest public works project in BC’s history.

    Nary a comment or spokesperson or meme about the Rocky Mountain Fort Defenders, Kristin Henry’s hunger strike, or the bus from Treaty 8 to Ottawa and back. No traveling town halls to raise awareness around BC. So they squandered an opportunity to educate and mobilize people while in opposition, and instead abandoned the dominant narrative to the mainstream media and BC Hydro to spread their BS. Zero mention of Site C in the party’s pre-election survey.

    The election platform buried it on p73 and didn’t name Site C or even the Peace River (!). Sure, there was the promise to send it to the BCUC for review, but within a very narrow mandate and on a tight timeline. They could say, “We did what we said we’d do,” except they neglected to mention that they’d also confer with the US-based Building Trades unions, their lobbyists and dam-whisperers in overtime. Old boys in the back rooms.

    If they go ahead with Site C, the NDP risks destroying a significant chunk of their base as well as the Peace valley, Hydro’s finances, the province’s finances, the ALR, and any hope for Reconciliation in Treaty 8 Territory.

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  7. Formula? – IPP premium power purchase inversly proportional to public utility dam bypass.Privitization of public wealth by private stealth?

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