BC Hydro

Site C, a Kodak moment

16mm film 250

For many years, I worked in the motion picture film laboratory business. One of our profit centres was processing TV News film footage. We had machines in or near TV stations in Vancouver and Victoria.

If a story was breaking, news departments would dispatch a reporter and cameraman to the scene. Rolls of exposed 16mm film got forwarded to the lab, developed and sent to the station’s editing department. Within hours, if all went well, the story would be on air.

Most film used in TV news was manufactured by Eastman Kodak. It also supplied camera stock to moviemakers and photographers and print stocks and papers to film labs around the world. The powerhouse company employed 60,000 in the city of Rochester, New York, and more than a few were involved in research and development of new products. One was Steven Sasson, a Kodak scientist who invented the first self-contained digital camera.

The company’s management feared the engineer’s filmless invention and refused to embrace it. Sasson says he was instructed to tell no person outside the company about the device.

Failure to adapt to new technology was a major reason that Kodak, which once had annual sales exceeding $10 billion, filed for bankruptcy protection in 2012.

Kodak’s manufacturing processes were complex and barriers to competitors had been substantial. Yet new video and digital photography attracted numerous players, even people without immense capital, special skills and experience.

Writing about Kodak in Forbes, innovation consultant Tendayi Viki said this:

…gaining and protecting a competitive advantage works in business environments that have long term stability. However, such environments no longer exist. The rapid pace of technological advancement has changed the dynamics in most industries. Most companies now need to develop the ability to respond to change quickly…

BC Hydro not only failed to respond quickly to technological advances in power generation, it pretends they are without consequence. Weakened by its long-term policy of buying private power and reselling at a fraction of its cost, the provincial utility created financial reports that, according to Dr. Eoin Finn, deserve awards for fiction. Instead of facing up to money troubles, BC Hydro lied about them.

The company raised residential rates 73% between 2007 and 2017, while inflation was 17%. It will be forced to continue boosting prices well ahead of other services or commodities — and wages — because it is near insolvency and spending billions to add more unneeded capacity.

Export prices for electricity have been under 4¢ per KWh for many years and utilities in traditional markets outside BC are adding wind power for less than 4¢ per KWh, after subsidies. Prices for utility-scale alternatives have dropped dramatically in the past decade and new technology even allows small users to rely less on traditional suppliers.

As BC Hydro rates rise, new power sources will be ever more attractive to many of its customers. Consumers may make their own or acquire electricity from new sources. Barriers that long protected BC Hydro are disappearing, just as Kodak’s went away.

As with the once formidable film company, BC Hydro’s management has been blind to market changes. Instead of introducing transformational innovation, they chose to do business in old ways.

Despite existing electricity surpluses, they still add high-cost private power (IPPs) while ignoring auction methods that allow other utilities to buy at comparatively low rates. And, of course, they are spending $10.7 billion on Site C and billions more on other new facilities.

Because our government lacks the wisdom or the nerve to change the utility’s course, BC Hydro is a mounting financial disaster that affects every citizen of British Columbia.


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Categories: BC Hydro, Site C

12 replies »

  1. And BC Hydro still has almost 90% of its power from dispatchable hydro sources, thereby allowing easier integration of clean renewables than most North American utilities.

    Liked by 1 person

  2. Mr. Aikman, your three decades as an astrophysicist/astrochemist with National Research Council of Canada has most likely given you a standard of living that most could only dream about – so paying your hydro bill without feeling the pinch likely isn’t an issue for you.
    The vast majority of British Columbians are not so fortunate.
    That we, our children, and their great grandchildren should be faced with the cost of this corrupt political/corporate orgy urged on by a level of greed I’ve not seen in this province before, will never be forgotten. That I will have to move from the province of my birth and rearing because I can no longer afford to live here due to government malfeasance and corruption, will never be forgiven. Especially when encountering flippant attitudes defending the indefensible.

    Liked by 1 person

  3. Firestone (tires) had the same attitude about innovation. When Michelin first introduced radial tires Firestone had every excuse why they shouldn’t adapt; “the tires were too expensive” and “it’s just a passing fad” and every vehicle that came off the Ford assemble line had Firestone tires on them: why change? Firestone became a shell of a company and was bought up by Bridgestone for it’s name.

    Liked by 2 people

  4. With rate increases constantly exceeding inflation, Hydro thinks ratepayers will be beholden to them for the next 70 years to pay off its debts and Site C? This won’t happen as technology advances and cheaper energy sources become available. For example a breakthrough in battery storage would make intermittent sources such as solar viable for many residences.

    Instead of Site C, Hydro should have built gas-fired power plants if/as needed to meet any load increases. The capital cost would have only been in the hundreds of millions of dollars, not billions. And the annual fuel cost would be far less than the annual interest charge on a $10.7+ billion loan. Huge mistake to have shut down Burrard Thermal as a peaking plant.

    The Liberals wouldn’t allow gas-fired plants due to GHG concerns. Meanwhile, they had no problem promoting the export of gas as LNG for the rest of the world to burn. This despite the fact LNG is far dirtier than gas burned domestically due to the tremendous liquefaction energy involved. And all that energy goes to waste as the LNG has to be regasified before it’s burned. A single average-sized LNG export terminal would emit more than double the GHGs of a gas-fired power plant generating Site C’s output of 5,100 GWh/yr.

    Liked by 1 person

    • Thanks for your contribution Martin.

      Readers should know that Mr. Cavin is a former Burrard Thermal plant operations manager and power engineer.

      He knows the many upgrades that were performed on Burrard Thermal and knows that it was capable of providing service in the event of unusual demand or if emergencies led to inoperable lines feeding power to the lower mainland from northeast BC. In addition, BT was capable of adding to the grid if profitable export opportunities occurred.

      https://www.e-know.ca/regions/east-kootenay/do-they-really-get-it/

      Liked by 1 person

    • “The Liberals wouldn’t allow gas-fired plants due to GHG concerns. Meanwhile, they had no problem promoting the export of gas as LNG for the rest of the world to burn. This despite the fact LNG is far dirtier than gas burned domestically due to the tremendous liquefaction energy involved.”

      And add the GHG emissions from shipping the LNG 7,000 km across the Pacific Ocean.

      Like

  5. I am getting that knawing feeling in my gut .BC Libs appointed ex ceo s and elected cabinet ministers are
    gonna dance away from this corrupt mess .NDP Premier and new hydo ceo s carry on with the Site C maddness tells me my gut is right again

    Like

  6. I know Arnold and Gordo’s dream of a “Hydrogen Highway” flopped like an Edsel — but I just picked up this story today.
    If it takes off, there will be a need for the extra hydro electricity. However, cheaper intermittent sources such as wind and solar would be an excellent fit. There is so much potential in this story; very exciting.
    https://www.vox.com/energy-and-environment/2018/2/16/16926950/hydrogen-fuel-technology-economy-hytech-storage

    Like

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