BC Hydro

Curious deal in BC’s pay-to-play economy

First published April 2017; updated February 2019.


BC Hydro news release, February 28, 2014:

CAMPBELL RIVER — BC Hydro has signed a contract with InPower BC for the John Hart Generating Station Replacement Project, which includes the construction of an innovative, underground powerhouse that will enhance public safety and improve the site’s environmental footprint.

…InPower BC is a special purpose project company in which SNC-Lavalin Group Inc. has 100 per cent interest. SNC-Lavalin will run the project out of its Vancouver office….

The Campbell River Mirror reported the John Hart budget to be $1.35 billion.

From a website of SNC-Lavalin:

In early 2014, BC Hydro awarded SNC-Lavalin a contract to design, build, finance and maintain the John Hart Generating Station Replacement Project on Vancouver Island in British Columbia, Canada. The project will create [have] an installed capacity of 132 MW. The new facility will replace the existing 126-MW station…

pix MW

Note that BC Hydro said SNC-Lavalin has a 100% interest in the new generating facility near Campbell River. It remains under construction and is a considerable way from completion. However, even though SNC-Lavalin, the scandal-plagued company that has been banned from World Bank funded contracts for ten years, owns 100% of the project, it is not paying 100% of its cost.

Keep in mind that not a single KWh of electricity had been delivered from the new John Hart facility by the end of fiscal year 2018. According to its annual Financial Information Act returns 2018, BC Hydro paid:

33 replies »

  1. Hello Norm: The LA Times has an article about Christy Clarke in their newspaper today.

    British Columbia, once a leader in fighting climate change, embraces fossil fuels

    “They definitely have horses on either side of the wagon,” Tarika Powell, who studies fossil fuel exports for Sightline Institute, a Seattle think tank, said of the British Columbia government. “And they are going in opposite directions.”

    Clark, who took office in 2011, leads the conservative but incongruously named BC Liberal Party … Clark has shown little interest in climate leadership.

    Like the proposed LNG projects, the Trans Mountain pipeline is intended to help Canadian fossil fuels reach markets in Asia, as well as the West Coast of the United States. It would transport nearly 900,000 barrels a day, creating as much as a sevenfold increase in the number of ships navigating Vancouver’s spectacular but fragile waterfront.

    The ships would gather in front of the sunsets in English Bay, pass close to Stanley Park, travel under the graceful Lions Gate Bridge and ply the shallow and narrow Burrard Inlet on their way inland to the town of Burnaby, the terminus of the pipeline and the site of what would be a greatly expanded tank farm near the entrance to Simon Fraser University.

    “There’s a lot of opportunity for bad things to happen in a confined area,” said Derek Corrigan, the mayor of Burnaby, which is fighting the pipeline along with the city of Vancouver, many First Nations and environmental groups.

    http://www.latimes.com/nation/la-fg-trans-mountain-pipeline-2017-story.html

    Liked by 1 person

  2. So the original John Hart was a hydro plant owned by BC Hydro, built in 1947.

    InPower will be paid to design, build, finance and maintain the John Hart Generating Station Replacement, but I assume BC Hydro will still own the plant.

    According to this link, the contract between BC Hydro and InPower is a P3:

    http://www.dbrs.com/issuer/19849

    So the estimated cost to (publicly-owned) BC Hydro for the replacement is $1.35 billion.

    It sounds like the $billion smart meter contract.

    Huge private benefit and huge public cost.

    PS, we just got our annual hydro rate hike on April 1:

    http://www.cbc.ca/news/canada/british-columbia/hydro-rates-bc-ferries-fares-officially-higher-1.4052207

    Liked by 1 person

    • Hmmmm,
      Well lets see. BC Hydro Contracts, BC Ferries contracts, Highway contracts, Bridge contracts, and on and on and on.
      They’ve made billions…….

      Liked by 1 person

  3. What if, if the NDP win, they permit IPP to not be required to sell their electricity to BC Hydro, but directly outside of British Columbia? What if BC Hydro’s only goal is to supply British Columbians electricity and NOT give sweetheart deals to mining companies et al. What if

    Liked by 1 person

    • Extricating BC Hydro from almost $60 billion (plus inflation) of private power contracts (some of which last until 2075) may be the mother of all court fights. (The Quebec award of $15 billion against tobacco companies is one of the largest ever.)

      Since we cannot look at the contracts, we have no way of knowing what sort of cancellation or penalty clauses exist but we can be safely certain they won’t favour the public,

      I have concerns about the no-pay power provided mining companies as well. Now over $100 million and rising at $8 million a month, will the deferred billings ever be collectible or are there secret agreements that will see the amounts written off?

      Liked by 1 person

  4. I have absolutely no doubt that when Christy Clark, upon leaving politics…..

    SNC Lavalin will announce ( after what they consider an appropriate amount of time of course) that “Cash for Meetings Christy” will be awarded a position somewhere in the company with an exorbitant salary to match……
    You can be assured that when SNC bid on the original contract her eventual “salary” was factored in…….
    Its a shame that corporate appointments after politicians leave office arent BANNED for at least 5 years upon leaving office.
    Canadian politicians….a new, lower level of stench

    Liked by 1 person

  5. So Hydro has already paid SNC Lavelin/InPower about 1/3 of the total cost… even though no power has been produced yet?

    At the current rate: in 10 years, the total cost will have been covered by Hydro. What is SNC Lavelin doing that Hydro couldn’t be doing themselves? This stinks.

    Liked by 1 person

  6. Let us not forget that Gwyn Morgan, past CEO of SNC Lavalin, is one of Clark’s top advisors.

    Let us not forget that SNC Lavalin hold the “engineering” patents for the proprietary ALRT/ART SkyTrain, thus are involved in all ART SkyTrain construction (hint: the now proposed $3 billion SkyTrain Broadway subway) in Metro Vancouver.

    Let us not forger that a SNC Lavalin/Hyundai consortium bid against a SNC Lavalin/Bombardier consortium for the Canada Line light/heavy rail metro, known as the Canada line. This was a bidding process, which Judge Pittfield, who presided over the Susan Heyes lawsuit, called a “charade”.

    Liked by 1 person

  7. those big projects which are built/controlled, etc by the friends of Christy Clark are simply just another method for the B.C. lieberals to transfer public money to private friends. the hart dam is simply another e.g. If there is cancellation of a project you can bet there is a clause which will pay out the companies, big time. If the clauses aren’t there now, they will be shortly. Those companies all donated to Christy and they want their money’s worth.

    we can only hope people go out and vote on election day if for no other reason but to get the electrical rates under control.

    Liked by 1 person

  8. http://www.cbc.ca/news/canada/newfoundland-labrador/supreme-court-canada-review-churchill-falls-energy-deal-1.4077258

    Don’t pretend to know all the facts here, but all those IPP contracts etc, singed the the liberals since 2001, (and others – health etc) maybe there is a challenge to be had here also. FixedLONG TERM/, certainly not in the interests of “British Columbians” in my opinion. Look what the current government has done to BC Hydro, ICBC, and the list goes on. Court challenge?

    Like

  9. Hello Norm: Is it likely that Christy Clark will become the new leader of the BC Conservatives if she losses the May 9th election? Notice the close branding between Federal Conservative signs and the “New” BC Liberals. The one common theme is that Stephen Harper spent millions for re-election on a long campaign … just like Christy Clark. She appears to be emptying the BC Liberal petty cash drawer.

    Notice the colour and the similar appearance of the BC Liberal – Federal Conservative campaign signs.

    https://www.bcliberals.com/

    https://www.google.ca/search?sclient=tablet-gws&client=safari&channel=ipad_bm&site=&source=hp&q=federal+conservative+campaign+sign&oq=federal+conservative+campaign+sign&gs_l=tablet-gws.3…4133.18475.0.23965.34.16.0.18.18.0.226.1336.14j0j2.16.0….0…1c.1.64.tablet-gws..0.31.1239…0j0i131k1j0i22i30k1j30i10k1.0iCDkRx73nI#imgrc=dz66oQq7C5nNvM:

    Like

  10. Hello Norm…
    Just read a small article(April 23, 2017) in the times colonist about the John Hart generating station by Carla Wilson. Her article is so shallow in content compared to what you have produced that it is almost as if there are two John Hart projects under construction. There isn’t a shadow of doubt in my mind that this is a simple minded press release from the CC office of pablum news to keep the rate payers from knowing the truth about this project. When they use the phrase, On Budget and on Schedule then it is obvious who is behind this release.
    One thing that concerns me is the completion date of Fall 2018 and the fact it is controlled by SNC-Lavalin, who I am sure will make the rate payers wish that this project had never been undertaking under the guise of making the old station Earthquake Proof. And who can honestly say that what they have created is any less prone to earthquake damage? Mike

    Like

  11. SNC Lavalin is a mega Canadian Corporation that is on the make and BC is their golden goose. but there is now coming a massive prize and that is this damned subway to UBC!

    This is a $7 billion plus project and SNC Lavalin happen to own the engineering patents for the proprietary SkyTrain system. They are also doing the so called do diligence for the proposed subway.

    The fix is in and the BC taxpayers taken for a long and expensive ride.

    Like

  12. “SNC-Lavalin, through its special purpose project company, InPower BC, was selected as the preferred contractor on the John Hart project, as well as a financial partner. The facility is operated by BC Hydro, but InPower BC is providing 40 per cent of the project costs. BC Hydro provides 60 per cent at the start, and the company will pay back the 40 per cent to InPower BC over 15 years. According to Watson, it’s like a performance warranty.”

    https://www.miningandenergy.ca/energy/article/keeping_vancouver_island_lit/

    Like

  13. The recent report on IPPs commissioned by the NDP government and titled “Zapped” provides an interesting review of the Waneta Expansion project on pages 32 and 33. It includes this statement:

    “Ultimately, this review was not able to determine why or to whom the Waneta Expansion project was important or why BC Hydro was directed to accept the EPA.”

    By pure coincidence, the project was designed and built by SNC Lavalin.

    Liked by 1 person

    • I was told Waneta was another deal the BC Liberals aimed to push past “the point of no return” before the 2017 election. The deal finally closed in 2018 but that was a formality. It was an initiative by the previous band of pirates led by Christy Clark, Rich Coleman and others who continue to sit on the front bench of the Official Opposition.

      Because BC Hydro will now consolidate sales of power to Teck Resources, from the dam Teck used to own, the provincial utility will proclaim a material growth in demand. It is not.

      However, the arrangement puts $1.2 billion into the pockets of Teck’s shareholders. I suspect the Keevil family will consider their extensive investments in BC Liberals has paid off remarkably.

      Like

      • The theme throughout the report was one of the BC Liberal Cabinet consistently ignoring advice from career BC Hydro officials (in some cases replacing contrarians with conformists) and ignoring developing industry trends.

        BC Hydro is the purported source of expertise in electrical generation and delivery for the government of British Columbia. Which begs the question: Who was providing these elected officials with the advice they valued above their in-house experts?

        Would they be identified by a public inquiry?

        Like

  14. It is getting to the point where BC taxpayers should insist on cutting out the “middleman”. As taxpayers, we would be better off NOT PAYING for 87 MLA’s, Sargeant at Arms and Legislative Clerk salaries/benefits/pensions and entitlements.

    Instead, we should have Direct Deposit taxation to: SNC Lavalin, BC Hydro and Trans Mountain Pipeline executives as they are the ones that are running (and ruining) our province. Of course, the list is much longer but life is too short to name them all.

    Just imagine:
    No more hugely expensive elections, lies, fake news, or broken promises. The projects would always be behind schedule, be exorbitantly over-budget and require constant repairs with no guarantees.

    As taxpayers, we could convince SNC Lavalin to build political Robots that run on rechargeable batteries to replace the costly, shameful human politicians we’ve experienced.
    As a further cost cutting measure, the Legislative Building could be closed and SNC Lavalin could build housing for the unemployed/homeless EX-politicians.

    Could SCN Lavalin bribe and build a “stairway to Heaven”?

    Like

  15. I sent this to Gord MacDonald and Jon McComb at CKNW this morning.

    “Several weeks ago a comprehensive report commissioned by the NDP government was released. It detailed how the previous BC Liberal government ignored its in-house experts and emerging industry trends for a decade and a half to order BC Hydro to purchase power it did not need at far above market rates through locked-in long term contracts.

    This morning on your “major” news at 8:00 you ran a “news” story regarding BC Hydro. Did it inform us why the BC Liberals saddled us with $16 billion for power we don’t need? Did it inform us who the BC Liberals were listening to while they ignored and in some cases removed BC Hydro personnel advising a different course?

    No, it didn’t. Instead it was an almost word-for-word recitation of the press release posted on the BC Hydro website this morning advising me I’m a “power hog” and I should start cooking my meals in the microwave or toaster oven.

    Your station used to be better than that.”

    Here is what they reported as news.

    https://www.bchydro.com/news/press_centre/news_releases/2019/report–baby-boomers-are-bigger-energy-hogs-than-millennials–de.html

    Like

  16. Lew, the unmentioned irony out of that report is that as Boomers die off or scale down, there will be an even lower demand for IPP or Site C power.

    So much for the “Visionary” Gordon Campbell, as Andrew Weaver recently described him… moments before the groping news.

    Like

    • Yes, and the millennials who are the real target of this campaign will be paying much more than they should for many decades for whatever power they do use.

      What do we suppose the purpose of the “report” announced in the BC Hydro news release is? To provide valuable information in the public interest to wasteful boomers so that they can alter their lifestyle and save money? Or is it to plant the idea with millennials that it was those greedy, entitled boomers who necessitated the acquisition of extra capacity?

      The website of the contractor used for this effort contains this clue.

      “People don’t buy products and services. They buy the symbolic value of a product and the experience of a service. To persuade people to buy something, you need to design how they feel about it too.”

      I suggest that includes persuading people to buy a story.

      Like

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