The Tyee published an article by founding editor David Beers that discusses Ken Davidson’s report to government about BC Hydro’s purchases of private power:
It’s all that Rafe Mair and Will McMartin warned here years ago.
This was a comment I left at The Tyee’s article:
Love David Beers’ statement, “Somewhere up there Rafe Mair is smacking clouds together to make them thunder: “I told you so!”
Rafe was a great help to me and so too were other activists who could see that many IPPs were a serious threat to the environment and a serious threat to the wallets of ratepayers.
The origin of the IPP rip-off is this. In fiscal years 2001 & 2002, BC Hydro’s trade sales were $9.3 billion at an average price of 21 cents per kWh.
Countless promoters wanted to make electricity in BC waterways and sell it to the USA. But, the export market collapsed when extortion of California power consumers by Enron and others ended. In FY 2003, BC Hydro’s trade sales fell to $0.6 billion at an average of 2.3 cent per kWh.
That meant the avaricious promoters had to do something else. The something else was a deal with BC Liberals to force the provincial utility to purchase electricity at rates that ensured long term profitability with near zero business risk. The deals were made even sweeter by inclusion of inflation escalators.
Of course, various people involved with BC Liberals and their government were early participants in IPP proposals.
Perhaps the IPP contracts that were the worst for the public involved AltaGas Ltd. Feeding power from their facilities required construction of BC Hydro’s $800+ million Northwest Transmission Line. (Imperial Metals, owned by a huge Liberal contributor benefits as well). The AltaGas contracts were for 60 years. In 2018, the company sold a 35% interest in their NW power facilities for almost $1 billion.
In my view, the $16 billion loss suggested in the Davidson report is overly conservative.
Categories: Independent Power Producers (IPP)