BC Hydro

Vested interests dictate energy policy

vested 480

When the spending of billions of dollars is at stake, vested interests are many. Not just contractors and their workers are involved. So too are utility managers and senior bureaucrats who give secret advice to governments.

In BC, we know that NDP decision makers were wrongly told that clean energy alternatives to Site C were unacceptably expensive and unreliable. Advisors also pushed the sunk cost fallacy, knowing that people focus more on losses than on gains.

David McRaney examined the latter subject in You Are Not So Smart, a blog that explores self-delusion:

Sunk costs are a favorite subject of economists. Simply put, they are payments or investments which can never be recovered. An android with fully functioning logic circuits would never make a decision which took sunk costs into account, but you would. As an emotional human, your aversion to loss often leads you right into the sunk cost fallacy.

The evidence that self-interest guides decision-making is shown in a Bloomberg article about the resistance of large utilities to net metering:

…In Nevada, it’s worked well. So well, in fact, that NV Energy, the state’s largest utility, is fighting it with everything it’s got.

First, NV Energy deployed its lobbyists to limit the total amount of energy homeowners and small businesses were allowed to generate to 3 percent of peak capacity for all utilities.

Then it expertly argued its case before regulators, who rewrote the rules for net-metering customers. In December it scored a major win: Nevada’s Public Utilities Commission (PUC) imposed rules that not only make it more expensive to go solar, but also make it uneconomical for those who’ve already signed up.

Similar regulatory skirmishes are playing out in dozens of other states, but no other has gone as far as Nevada to undermine homeowners who’ve already installed solar arrays…

Site C proponents claim the project has an economic life that will extend into the next century. To many, that is not an appropriate justification. The Eckert and Mauchly Computer Co. of Philadelphia sold its first UNIVAC 1 in 1952:

The massive computer was 8 feet high, 7-1/2 feet wide and 14-1/2 feet long. It had lots and lots of tubes that dimmed lights all over Washington when it cranked out information.

The machine was inoperable as often as it was running because vacuum tubes needed constant replacement. Not surprisingly, UNIVAC was rather quickly outdated by advancing technology. Today, almost everyone in BC above the age of 12 uses cell phones that have more than 1,000 times the computing power. Half a million of today’s phones use less power than a single UNIVAC.

People outside utilities see massive changes pending for energy creation. The Guardian published Let the people lighten energy load with citizen-owned schemes:

The potential for citizen involvement in electricity production is considerable. A recent study showed that by 2050 half of all Europeans could produce their own electricity either at home, as part of a cooperative, or in their small business. Counting generation from wind and solar power alone, these small actors could meet almost half of Europe’s total electricity needs.

Even more people could support the energy transition, and share in the benefits, by storing power in batteries, electric vehicles and smart boilers. This enables the grid to draw power when it’s cheap and plentiful, and temporarily lighten the load if there’s a peak in demand.

The coming shift in power distribution is referred to as the democratization of energy. It is resisted at BC Hydro and other utilities but it is inevitable. Failure to adapt will cost us billions.

Categories: BC Hydro, Site C

8 replies »

  1. The current Premier of British Columbia is not a Johnny (Horgan) come lately to this issue. He should know more about it than any other MLA.
    From his Wikipedia bio:
    • Lead negotiator on the Columbia Basin Trust and participant on teams for the Columbia River Treaty and Land Use Plans.
    • Director of Corporate Affairs at Columbia Power, focusing on getting Keenleyside and Brilliant dams repowered.
    • His last job in government was at the level of Associate Deputy Minister working in the Ministry of Finance on energy projects.
    • Opposition critic to the Minister of Energy, Mines and Petroleum Resources in the 38th, 39th and 40th Parliaments.
    • During 39th Parliament presented to the legislature a declaration of opposition to the Site C project, as signed by Peace River area residents and First Nations. Argued that Site C was not in the public interest.
    • During 2013 election campaign promised a comprehensive review of BC Hydro, in particular its debt load, commitments to independent power producers, and future infrastructure requirements.

    His bio makes no mention of a trip to Syria. It seems an oversight however because something surely happened to him on the road to Damascus.

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  2. Great article and it clearly outlines what lengths major players go to ensure they remain on the gravy train. Always thought there was something to solar, but was convinced when Iran held a conference on it at their Germany Embassy and found out Iran was subsidizing their citizens to switch to solar. Its not like they don’t have enough oil, so there had to be something happening. of course holding it in Germany, who has been a leader in renewable energy says something also.

    What they did in Nevada is something the utilities were doing in Hawaii also. The big players don’t want solar. it empowers the people. Small solar operations are a great thing because it provides energy security, just as we hear about food security we ought to look at energy security and that means, close to home.

    these giants will eventually fail and so will those who support it. why Horgan supported Site C is beyond me, but perhaps …………….

    As to “sunk” stuff, a former ex. taught me a very long time ago, there was a time you had to walk away from the table because it just wasn’t going to be your night to win. Guess Mr. Horgan never learnt that, or he has some other reason. Perhaps Mr. Meggs could explain.

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  3. I can see people just going off the grid completely when it becomes cost effective to do so, and there is nothing the government can do about it. The costs are dropping with improved tech. all the time, and people are becoming power smart without a government subsidy.
    BC Hydro’s costs to the consumer are rising dramatically to cover their debt load.

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  4. individuals will go off grid if they own their own homes or the equipment is portable. Many stratas may not permit the equipment nor will land lords.

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  5. New homes, apartments, buildings apparently can be built as net-zero energy, meaning they are hooked into the utility but their net consumption from the utility is zero.

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