BC Hydro

Priorities

priorities 200BC Hydro executives recognize trouble when they see it. Trouble with their plans to spend $20 billion building additional megaprojects, that is.

In its submission to BCUC seeking to eliminate payments to net metering customers who contribute power to the grid, BC Hydro revealed a situation they want to end:

In 2017, 230 Net Metering customers received an annual energy surplus payout. The total annual payout amounts were approximately $280,000 …

Too bad they weren’t doing something about the amount paid to independent power producers (IPPs) for unneeded electricity in 2017. That was almost 5,000 times more than the payout to net metering customers.

Before further discussion of IPP payments, we must consider that BC Hydro’s sales to residential, commercial and industrial customers have not grown in the last decade. During this time, the utility added 16% to its internal capacity.

sales and capacity 520

So, we must ask why the quantities of electricity purchased from IPPs have been rising steadily. Of course, the rates BC Hydro paid for each KWh of private power has escalated well above the rate of inflation.

IPP purchases and rates 520

faucet 300There is a small group of people — BC Liberals and friends — who viewed BC Hydro as a giant faucet for disbursement of cash. It is a costly reality for consumers of electricity in British Columbia since BC Hydro has paid more than $11 billion to IPPs since the time Gordon Campbell formed his Liberal Government in 2001.

Residential Rates 520Where does that money come from? From residential and business consumers.

Yet, despite rate increases well above inflation, BC Hydro has been sinking toward insolvency. Citizens have been misinformed about the state of finances and the corporate media refuses to report the truth.

The Horgan government, now ten months in office, has declined to make significant policy changes at the crown corporation. In fact, BC Hydro operates much as it did under the Clark Liberals.

NDP explains that it has more urgent priorities demanding attention but, more likely, they feel unable to address BC Hydro’s problems without handing political opponents an opportunity to blame troubles on the Horgan Government.

This is a weakness of political will that cannot end well.


Note:

Activity here will be limited for a while. I broke my wrist last week and my right arm is in a rather clunky cast. I have limited range of motion in my other arm because of previous shoulder joint replacement so typing is now a real chore. I hope to get another cast soon that will make life a little easier.


 

Categories: BC Hydro

10 replies »

  1. So what we have paid out to the IPP ‘s is what the site c folly is potentially costing us, all for power we don’t need. Unbelievable lunacy.

    Speedy healing, Norm. Miss you when you aren’t in my inbox!!

    Liked by 1 person

  2. Shirley (Surely) there’s someone out there that can take dictation! Without you Norm, those Liberal/Hydro “managers’ would run rampant. Who says they aren’t good business people? If only some of their efforts had been directed to the general populace instead of feathering their own nests…..
    Unbelievable what we have allowed them to get away with!

    Like

    • Norm could get our premier, or perhaps even my local NDP MLA to take dictation for him…..
      both of whom had me go door to door to tell prospective voters that a vast majority of hydroelectric IPP contracts had to be re-evaluated.

      They seem pretty good at writing policy dictated to them by deputy ministers, bureaucrats, lobbyists, board appointees and consultants left over from Christy Campbell….not to mention a likely case of career party backroomitis.

      If they make a mistake (again) that heavier arm cast will come in handy.

      Like

  3. Starting with the BC Auditor General’s report of February 2017, citizens of BC have been told to think of “Contractual Obligations” as only payments to be made for delivery of goods and services, priced presumably to reflect current market conditions. Ask any BC politician and they all answer as if there is a world of difference between “debt” and “contractual obligations”. It is convenient for them to think and talk this way because it keeps the enormity of the totals out of the conversation.

    “Debts” are payments to be made only determined by the calendar where as “Contracts” are supposedly payments from taxpayers and BC Hydro customers when something of value is delivered.

    If only the world were that simple or simple minded. If the reader thinks like an investor/lender then the preceding narrative collapses to nothing. I know of no person who would lend or invest their capital without being certain of the return of their capital and a reasonable amount of earned interest as well.

    All P3 and IPP contracts are for the construction and operation of fixed in place public works and electricity generation plants. You have to know why these contracts were made secret by Mr. Campbell, it is so we the taxpayers and BC Hydro ratepayers would not know of the values of minimum payments, regardless of production amounts, called for by theses secret contracts. To further give extra money to these insiders the contracts are almost certainly transferable which means all or part can be sold to others elsewhere in the world to people we have no knowledge of. This certainly happened with the “shadow toll ” contract for the Sea to Sky highway project.

    When we had a chance to read an IPP contract that was for the proposed generation plant at Duke Point. This contract got the support of BC Hydro and the BCUC. The developer gave evidence that it would be completed at a cost of $300 million. The minimum payments, even with no production of electricity, had a present value of $500 million or $200 million over cost. As soon as we won the right to take this creature into a real court of law everyone involved ran for the hills to avoid answering questions in public cross examination. That when and why your government made all these contracts secret .

    Without full sight of all these $58 billion in IPP contracts, as identified by the Auditor General, we have only speculations of how large the premiums are that we the customers must pay and who are the beneficiaries.

    By using the AG’s report it can be shown that BC a family four now carries a financial, contractual total obligation,indirectly but still their obligation as a BC citizen, of nearly $90,000 to which can be added another $10,000 with the completion of Site C.

    If people in BC are feeling financially squeezed they need only look at BC Hydro for a big part of their pain.

    The NDP knew all of this well before the last election but like all politicians, resorted to “kicking the can down the road” option, made much worse with the decision to carry on with Site C.

    Liked by 4 people

  4. Excellent analysis as always Norm. And also by Erik in the comments. The worry expressed by the execs at BCHydro over “large” payments being made through net-metering grid tie customers that produce more than they consume is pittance compared to the escalation in rates paid out to IPPs.
    Net metering participants are limited by regulation now as to their maximum output to the grid. And they don’t have the luxury of take or pay as some IPPs do. But they are an easy target for the utility. Changes need to be made in the boardroom and at the exec level..

    Liked by 2 people

  5. We all know it was a backdoor way of privatising BC Hydro because Gordon Campbell announced he wanted to do it before he lost the 1997 election. The real question is why are so many people ignorant as hell about what the BC “Liberal” government was really up to. And the answer to that is we allowed business to capture and silence actual media scrutiny.
    I have been listening to CKNW for 25 years and imo its devolved into FOX north without the conspiracy theories. Today Mike Smyth over and over phrased this “scandal” about the BC gov. pension plan as Horgan , Heyman,and co personally benefitting from the 1 million shares!!!! that the pension plan owns. Thats 13 million dollars out of a 135 billion pension fund. Yet he didn’t mention that Christy and Gordan and Rich and De Farmer will all be reaping the rewards too. All i could hear was Baldry saying “thats amount is peanuts …it’s a rounding error in a 135 billion total. He just kept implying that the NDP are hypocrites when they are actually not involved in the financial management of the fund. I just expected Smyth to start talking about uranium one or pizza gate. Where is our Washington Post though? We have no one to check the lies of postmedia global and chorus. Keep up the pressure Norm we need a voice of sanity.

    Liked by 1 person

  6. From the BC Hydro submission:

    “In 2003, when the Program was established, it was expected to be a very small program with just a handful of interested participants. More recently, the Program has been more successful than originally expected. At the end of March 2018, the Program had over 1,330 customers with 9,000 kW of total capacity. In the past 12 months alone, BC Hydro has received over 500 new Net Metering applications.”

    So in BC Hydro’s world, if a desirable program is more successful than originally expected, the recommended course of action is to terminate it.

    Using that guideline, Site C should be safe.

    Liked by 1 person

  7. It is not just Hydro, Montreal’s REM rapid transit project is nothing more than a cash faucet for the Quebec Caisse, using the Canada Line the original example to the P-3 swindle. The faux P-3 Canada Line, pays the SNC/Caisse consortium operating the line about 2 to 3 times more annually than a comparable light rail line with twice the capacity.

    The Campbell/Clark Liberals treated BC and the taxpayer as an endless supply of cash of their political friends and insiders.

    Hello – Horgan, do something about it.

    Liked by 3 people

  8. Thank you Norm and Erik. The above analysis speaks volumes of where the citizens of BC are blindly heading (or is it being led) …being told by so many politicians and bureacrats that “don’t worry…be happy” should be our mantra.It really does amaze me to see how few individuals , such as yourselves, see the reality we are heading towards. Truly, if there were ever a time for listening to your “voices in the wilderness…” NOW would be the time.

    Liked by 1 person

  9. Thank you Norm and Erik for clarity and making sense of the issues which are so often missed, covered up or ignored. Regardless, your voices are being heard….perhaps slowly. It reminds me of that old Testament version of “voices in the wilderness”. We need more of this…not less!! Thank you both.

    Liked by 1 person

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