Interested residents of BC are fortunate to have Rick McCandless explain dark mysteries of public finance. As a former senior official of the provincial government who has only the public interest at heart, McCandless is a well qualified commentator.
His latest “Occasional Paper” is BC HYDRO FIVE-YEAR STATISTICS 2013 to 2018. It includes:
In late August the government finally released the province’s public accounts for 2017/18. The delay in the release was caused by the government waiting to decide how much of the year-end surplus would be set aside to address auditor general’s objection to the use of regulatory accounting at B.C. Hydro.
The decision to prospectively commit $950 million to begin to reduce the balance of the net deferrals overshadowed the reporting on B.C. Hydro’s actual results for the previous fiscal year.
The lack of meaningful analysis may be explained because of the difficulty in understanding the true meaning and import of the financial results.
The pernicious effect of deferring revenue and expenditures distorts the financial results. The deferrals are designed to attain pre-determined net income and dividend targets set by cabinet order, as opposed to these results being the difference between the revenue received and the expenditure in the year.
McCandless confirms that in fiscal year 2018, the sales volume of domestic electricity continues on a flat line. In fact, power delivered by Hydro to BC residential, commercial and industrial consumers was greater in FY 2006 than in the year just passed.
Regarding cost of energy, McCandless notes:
In the last five years B.C. Hydro’s cost of energy increased by $534 million, or 49.4%. This was entirely due to a 72.6% increase in the cost of electricity purchased from private power producers.
The amount of water rental paid to the provincial government declined by some 7% due to the cancellation of the Tier 3 rates.
Another part of the analysis would be headline material if corporate media were paying attention to the public interest. Burdens imposed on ratepayers measure in the billions and traditional journalists — including ones who told us for years about smaller sums lost to fast ferries — report almost no part of the news.
To adjust to the decline in requirements B.C. Hydro reduced its purchases of short-term power contracts (reflecting the decline in Trade volumes). However, the commitment to private power producers resulted in a 3,679 GWh increase (34.5%) to this sector, and a 4,200 GWh drop (16.1%) in power from the publicly-owned dams. The decline in owned GWh produced was almost equal to the power from Site C (5,100 GWh).
…during the last five years the payment to the private power producers increased by 72.6%, while Table 3.2 shows that the purchased GWh’s increased by 34.5%. The average price per MWh increased from about $71.20 to $91.40, or 28% (some 5.6% per year).
The five-year comparison shows that despite a strong economy and significant population growth, the increase in electricity sales of Domestic electricity has lagged considerably. B.C. Hydro has been forced to pay significantly more for private power generation, and curtailed generation from its own dams to accommodate the increase in privately generated electricity…
I cannot explain why this information is not put to the public by institutions that exist to supply news. McCandless circulates his analyses to an extensive list of reporters and commentators so, ignorance of the province’s energy woes is not an explanation.
The Canadian Association of Journalists publishes Ethics Guidelines that includes:
We serve democracy and the public interest by reporting the truth. This sometimes conflicts with various public and private interests, including those of sources, governments, advertisers and, on occasion, with our duty and obligation to an employer.
Defending the public’s interest includes promoting the free flow of information, exposing crime or wrongdoing, protecting public health and safety, and preventing the public from being misled.
Of course, the CAJ code also includes this:
We do not solicit gifts or favours for personal use, and should promptly return unsolicited gifts of more than nominal value. If it is impractical to return the gift, we will give it to an appropriate charity.
We generally do not accept payment for speaking to groups we report on or comment on.
Many parts of the CAJ guidelines must have been redacted when forwarded to certain members of BC’s Legislative press gallery.
This illustrates one of the reasons demand for electricity has been flat and, because solar prices are decreasing while BC Hydro rates are rising, that 12-year trend will continue.
The pictured house is a new one on West Queens Avenue in North Vancouver. There is more than solar power that contributes to the home’s small energy footprint. Smart design and numerous efficiencies are the products of Mindful Homes. Half of the home’s annual electricity requirement is provided by solar panels, even on the rainy North Shore.