By any measure, BC Hydro was a success. So successful that pirates made plans to plunder.
BC Hydro was a decades old operation that delivered power to British Columbia’s residential and business consumers at prices that ranked among the lowest anywhere.
Additionally, a steady flow of money moved from the utility to public treasuries. Since 1989, the crown corporation contributed about $20 billion in dividends, water rentals and grants in lieu of property taxes.
With assistance of 21st century Liberal governments, politically connected individuals began treating BC Hydro as a machine for dispensing cash.
Independent power producers (IPPs) were large beneficiaries. From the beginning of fiscal year 1993 to the end of FY 2001, they were paid an average of $7.5 million a month. BC Hydro’s most recent financial report shows average monthly payments of $132 million.
Most of this 1,660% increase occurred while demand for electricity in BC barely changed.
In the quarter ended September 30, BC Hydro paid IPPs $291 million more than the same period in 2005, despite fewer watts of electricity sold to BC consumers in 2017.
Private power bought by the crown corporation during the period grew to 37% of deliveries to BC consumers, despite a significant increase in the utility’s own generating capacity. Private power totalled 14% of domestic sales a dozen years before.
Buying billions of dollars of private power through secret contracts that last as long as 2075 was not a business decision. It was privatization by stealth, a political choice aimed at delivering public wealth to Liberal friends.
Most decisions that led to BC Hydro adding almost $20 billion of new assets during a dozen years of flat demand were political as well. Asset growth is partly explained by the crown corporation deferring or capitalizing operating expenses and creating receivables by booking phantom revenue. Besides creation of fake profits, another part of the asset growth is explained by extension of distribution networks to serve mining and energy companies that had invested heavily in BC Liberals.
One reader asked me to explain the difference between the numbers reported here and the figures used in BC Hydro press releases and echoed by Site C proponents.
For decades, the crown corporation reported its sales as:
- commercial and light industry
- heavy industry
- trade (exports)
I report numbers from the first three categories since these represent all BC consumers of electricity. With many years of oversupplied, low price markets outside BC, our public utility should not be building or acquiring export capacity on spec. Power surplus to domestic need is unaffordable.
Until 2012, the “other” category was not significant, amounting to less than 3% of the first three categories. In the second quarter of fiscal year 2018, “other” was 30% of those same items, measured in gigawatt hours.
The change is not accidental; it is purposeful disinformation. BC Hydro began adding sales outside the province to the “other” category instead of treating them as trade sales. The intention was to give an appearance of rising demand by BC users of electricity.
In the third quarter of FY 2017, BC Hydro stopped reporting trade sales as they’d done for decades. Revenues from sales of electricity were combined with sales of natural gas, making it impossible for analysts to verify the unit price of electrical trade sales. Seemingly, the company was embarassed to reveal this informaton since they were selling surplus power at a fraction of the price paid IPPs.
When a publicly owned corporation chooses to hide or distort financial information, they forfeit trust. Now, these unreliable people want continued license to spend ten to twelve billion dollars on Site C.
Deceit is a tool they use to keep people of BC uninformed.
Independent power producers have taken almost $12 billion from BC Hydro but that was not sufficient. Corporate pirates aimed to privatize more of the public’s wealth.
The Peace River dam, largest infrastructure project in provincial history, provided opportunity. Years of flat sales to BC consumers, rising private power purchases, export markets depressed by oversupply and declining prices for alternative energy ought to have ensured Site C was a non-starter. However, Liberals loved megaproject spending.
Will the Horgan Government end Site C and reestablish honest management of BC Hydro? They have this information and a failure to act would be a failure of nerve.
That has not been John Horgan’s style. I don’t expect his Government to fail in this situation.
11.5 years of flat sales to BC consumers didn’t stop BC Hydro from paying $19.9 billion for additional assets and $11.5 billion to IPPs for private power. Help us tell this real story to citizens of BC. Corporate media won’t do it. #bcpoli #cdnpoli #SiteChttps://t.co/ZYz3J1WUWg
— Norm Farrell (@Norm_Farrell) December 4, 2017
— Norm Farrell (@Norm_Farrell) December 4, 2017