Independent Power Producers (IPP)

Rafe smacking clouds…

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:

So that New Report on the Huge Private Energy Rip-off of BC Ratepayers?

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.

Rafe will not be forgotten

11 replies »

  1. Rafe never left us. His cutting essays continue to point out the guilty. Thank you for this Norm. For years you brought this news to us and MSM did their best to ignore it. Sad that corruption crosses party lines.

    Liked by 1 person

  2. So good to hear the history of when these gold rush ideas went down financed by us.
    I guess what Enron did was an irresistable scam to emulate here in the social backwaters?
    There is something really dumb about BC Hydro to submit willingly to this sting on the public’s purse as a Crown Corruption working for the Province.
    A full inquiry.
    But in the end it all comes down to the Premier of the day Gordon Campbell, a professional.

    Liked by 1 person

  3. The question that must be asked is whether this $16,000,000,000 millstone around the public neck is the result of sheer incompetence, or intelligent (and corrupt) design. I refuse to believe, given the evidence available, that this was not a scheme to enrich favoured insiders. It is too contrived, including the deliberate enabling legislation enacted in the face of circuit breakers popping the alarm across the continent, and the nature of the players involved.

    “This is the type of thing the BC Liberals have done — let their rich friends get away with British Columbians’ dollars, and it’s B.C. that has to pay. If we had not gone into these private power schemes, people would be paying $200 less on their hydro bills right now.” – Minister Michelle Mungall.

    Nice words. Political words. They may suit the NDP’s political agenda, but they come up short for the practical remedies the public deserves.

    If John Horgan and his caucus are not just playing politics with this, here’s a suggestion. Establish a wide-ranging public corruption inquiry, to include an examination of the circumstances involved in setting up this scheme. If it turns out the contracts were established with corrupt intent, they would be illegal. And could therefor be terminated.

    The inquiry would pay for itself. And justice would be done.

    On this and many other topics of inquiry a long-suffering public is wondering, “Do you have the courage, Mr. Horgan?”

    Liked by 3 people

  4. I’ve read the Tyee since its inception and still check in daily, but I have to say that I found Mr. Beers’ allocation of credit to be somewhat narrow and self-serving. Good on the Tyee, and Mair, and McMartin, but the most consistent and longest serving critics include several outstanding candidates outside the orbit of the Tyee, and I hate to see a responsible press organization neglect to give credit where it’s due and to fall into the trap of a Global-style ‘exclusive’ ‘breaking’ news.


  5. With the BC Clean Energy Act (2010), the BC Liberal Govt apparently forced BC Hydro to take on certain projects:

    “Exempt projects, programs, contracts and expenditures
    7 (1) The authority (BC Hydro) is exempt from sections 45 to 47 and 71 of the Utilities Commission Act (BCUC) to the extent applicable, and from any other sections of that Act that the minister may specify by regulation, with respect to the following projects, programs, contracts and expenditures of the authority, as they may be further described by regulation:

    (a) the Northwest Transmission Line, a 287 kilovolt transmission line between the Skeena substation and Bob Quinn Lake, and related facilities and contracts;

    (b) Mica Units 5 and 6, a project to install two additional turbines and related works and equipment at Mica;

    (c) Revelstoke Unit 6, a project to install an additional turbine and related works and equipment at Revelstoke;

    (d) Site C, a project to build a third dam on the Peace River in northeast British Columbia to provide approximately

    (i) 4 600 gigawatt hours of energy each year, and

    (ii) 900 megawatts of capacity;

    (e) a bio-energy phase 2 call to acquire up to 1 000 gigawatt hours per year of electricity;

    (f) one or more agreements with pulp and paper customers eligible for funding under Canada’s Green Transformation Program under which agreement or agreements the authority acquires, in aggregate, up to 1 200 gigawatt hours per year of electricity;

    (g) the clean power call request for proposals, issued on June 11, 2008, to acquire up to 5 000 gigawatt hours per year of electricity from clean or renewable resources;

    (h) the standing offer program described in section 15;

    (i) the feed-in tariff program described in section 16;

    (j) the actions taken to comply with section 17 (2) and (3);

    (k) the program described in section 17 (4).

    (2) The persons and their successors and assigns who enter into an energy supply contract with the authority related to anything referred to in subsection (1) are exempt from section 71 of the Utilities Commission Act with respect to the energy supply contract.

    (3) The commission (BCUC) must not exercise a power under the Utilities Commission Act in a way that would directly or indirectly prevent the authority (BC Hydro) from doing anything referred to in subsection (1).”

    See Part 1, Sec. 7:


  6. Sooooo.

    We have IPP “contracts” signed by politicians who received political contributions from the very same companies benefiting from these lucrative (cant lose) contracts….

    Correct me if I’m wrong but couldn’t any lawyer argue “conflict of interest” and rip up these one sided contracts?

    Who cares if it takes 10 years of Court battles.
    Its still cheaper than a 50, 60, 75 YEAR contract costing billions..

    Liked by 3 people

  7. Why can’t we just not pay the IPP corporations anymore for their power (which isn’t needed anyway and way too expensive)? I’m not a lawyer but hasn’t a precedence been set by a California court that ruled, BC Hydro didn’t have to be paid by California utility companies that had purchased power from them? Reason? The court deemed that the power was too expensive.


  8. Fer a sec here, let’s talk karma (or what ever else ya wanna call it). Weird, but here we have revelations about IPP/Liberal shenanigans. A couple of days later we have revelations about Gordo’s shenanigan’s while in London. Hmmmm


  9. Yes, Rafe was right and why did you think Campbell had CORUS fire him!

    Unlike the 3 amigos who shilled for Campbell, Rafe told it like it was; a pure grift to enrich friends of Campbell.

    I say, seize the assets of the IPP’s without compensation as the proceeds of crime!

    Liked by 1 person

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