BC Hydro

“A cathartic and vindicating moment”

March 4, in the BC Legislature, Port Moody-Coquitlam MLA Rick Glumac presented a private members’ motion:

Be it resolved that this House agree that government should no longer direct B.C. Hydro to sign long-term private power contracts that force British Columbians to buy expensive power and sell it at a loss.

https://www.leg.bc.ca/documents-data/debate-transcripts/41st-parliament/4th-session/20190304am-House-Blues

He continues:


…Back in 2008, I could see the coming financial disaster when the B.C. Liberals forced B.C. Hydro to buy energy we don’t need for way above market rates to sell at an 80 percent loss.
[1105]
The truth has finally come out in an independent report, and the scale of the financial disaster is frightening. We’re losing $16.2 billion. Think about that. That’s $4,000 for every household.

…the 2010 Clean Energy Act was passed, which eliminated the role of the BCUC in all future energy purchase agreements with IPP companies and the oversight of many other projects like Site C. Instead, government would approve these plans. The BCUC is an independent regulator. Its role was to protect ratepayers. The B.C. Liberal government did not see any value in this role. They didn’t care how much the energy would cost.

Esquimalt-Metchosin MLA Mitzi Dean continued:

…even as the problems with IPP contracts became clear, the B.C. Liberal government continued to direct hydro, often against warnings from B.C. Hydro and ministry staff to pursue these contracts.

According to the report: “In interviews, both the ministry and B.C. Hydro advise that government was made aware of the risks inherent in its directives… Government was purposeful when the only option it left B.C. Hydro was to buy that energy from IPPs.”

They were advised by professionals and disregarded that advice, with not an insignificant consequence for British Columbians, especially those living in poverty…

Nanaimo-North Cowichan MLA Doug Routley added:

If you dropped down from another planet and looked at how could B.C. provide its energy needs — what assets does it have, what tools does it have, and what challenges does it have? — would you have designed a system where you demanded power be produced at a time when we don’t need it and then purchase it for 80 percent more than it’s worth?

…The only way their private friends could get the capital to build these projects was if this government guaranteed we’d buy the power at four times what it’s worth. That they took to the bank. …It was the next gold rush on our rivers…

North Vancouver MLA Bowinn Ma generously offered credit for part of her awareness of the private power schemes:

It was in 2016 that I sat down with an impressively well-informed former accountant and North Vancouver resident named Norman Farrell at a local Starbucks on Marine Drive. It was my first time meeting him, and as a newcomer to the political scene, I had no idea what to expect. For years, Norm had been doing deep dives into the inner workings of B.C. Hydro and coming up with more and more shocking revelations of the B.C. Liberal government’s management choices of the massive Crown corporation.

Sipping on lattes in the corner of a busy, noisy coffee shop, Norm unloaded years of research on me in a short couple of hours. The story he told was incredible and, yet, his research entirely credible: hundreds of millions of dollars of long-term contracts signed to purchase electrical power from independent, for-profit power producers, known as IPPs, based on electrical demand projections that proved entirely false over and over and over again.

What’s more, the independent power would be available exactly when B.C. Hydro’s public assets would already be awash with inexpensive energy rather than at times when reserves were likely to be low.

He told me of the contracts that locked the province into purchasing power at ever-increasing rates, despite totally stagnant prices for power on the market, with built-in requirements for the province to purchase the energy at enormously inflated prices, whether needed it or not, for decades to come, with no way out.

He told me the public would be paying billions of dollars without so much as an asset to their name at the end of the day.

The release of the Ken Davidson independent report on IPPs on February 13 was, no doubt, a cathartic and vindicating moment for Norm, who had estimated the losses at $800 million a year. The report confirmed he was right on the money. The people of B.C. will pay a staggering $16 billion over 20 years in completely unnecessary costs to private interests for absolutely nothing in return…

Norm Farrell offered some insight to me recently. “After years of writing about the subject, I applaud the new government’s decision to commission and publish the report. Had I been involved, I would probably have pushed for it to be even harsher on the people that developed the private power policy. I am convinced that while the initial purposes had some validity, a malignancy developed, and it allowed schemers to take advantage and score profits that were unearned and undeserved”.

The motion was approved by the House.

Bowinn Ma is correct. I do feel that my work helped raise awareness of this issue. But, I was not alone. Many others warned about negative environmental impacts of private “green” power projects. People like Gwen Barlee, Joe Foy, Damien Gills and, of course, Rafe Mair. There are others too.

People like the In-Sights reader known as “Motorcycle Guy” helped me become better informed. He also worked to educate politicians.

We’ve been on a long path… for me, a little short of ten years.

Throughout that time, I couldn’t understand why the obvious insanity of costly private power programs didn’t raise the ire of many citizens. For that, I lay a large part of the blame on radio and Press Gallery pundits. Some had personal interests affecting their points of view and some believed that health of the business coalition party ranked above the public interest.

This example was written in 2009:

I listened to CKNW’s Bill Good interview private power producers at a recent energy conference. Good was a cheerleader determined to broadcast a story that reflected positively on his guests. He helped push the story that BC Hydro has too little financial and intellectual capacity to be an effective power producer and that private companies are best able to ameliorate environmental risks.

Is this the same BC Hydro that operates more than 30 hydroelectric facilities and contributes billions to the public treasury by generating and distributing power throughout 95% of this province? And would that be the same private sector that remediated polluted mining sites and avoided serious pollution by smelters and pulp mills?

When a caller pointed out that BC Hydro is banned from developing new power sources and private projects depend upon advance non-market agreements to purchase expensive power, Mr. Good “didn’t have time for speeches.”

Nor, on April 11, did Sean Leslie and Gordon Campbell have time to answer a caller’s allegation that Campbell associates, former ministerial aides and advisers, left public service to work for private power companies after government approved numerous contracts.

Someone asked me today if there was something BC Hydro could do to amend the situation. My response:

They’re locked into contracts worth over $50 billion, some of which last until 2075. A number of crooked people made fortunes beginning and then flipping contracts. They knew how the system worked and probably covered their tracks very well. Without proving conspiracy to defraud, not much can be done.


One thing Liberals did was to pass a law that prevented oversight or review by the BC Utilities Commission, which existed to regulate these kinds of deals.


In the end, it’s only money the province loses through IPP contracts. Think of how other bad government policies wreck lives. For example, failing to act against money laundering in casinos enabled growth in the drug trade that kills thousands of people each year.


BC Hydro is being defrauded of billions because of dumb and deceitful Liberals. But, it’s not their worst failure.


Think I’m unfair to blame corporate media members for facilitating and promoting the private power rip-offs? Read this linked piece from 2009:



22 replies »

  1. Good Morning Norm.

    Your work and the work of others that you have helped educate on this has been priceless, as without the knowledge gained by digging into provincial numbers and BC Hydro statistics and your excellent visuals, many would consider the IPP program benign.
    As you indicate, in many cases there isn’t a lot to be done, except continue to pay.
    Something can be done about the waste of ratepayer spending at the Site C dam and should be done immediately. By following the C.D. Howe Institute recommendation to discontinue the project in spite of “sunk” costs, ratepayers could see some relief from the huge amount of debt and contractuals that have been accumulated.

    Liked by 2 people

  2. In our world people do jail time for defrauding others. Why are these Liberal Theives walking freely? How do politicians consistently plunder the public purse and profit?
    Laws need to be changed and punishment doled retroactively.

    Liked by 2 people

    • certainly would support your suggestion, always said I wanted to live long enough to see Gordon Campbell brought back in hand cuffs. about the only place we may see that is if we go to england. we he is being investigated for sexual assault. It is doubtful el gordo will ever be held accountable for any thing he did in this province. You do have to wonder why.

      Liked by 2 people

    • It`s made even worse when the BC Liberal brand of Justice and Attorney General officials over the years are part of the framework of corruption. Can`t get any worse when the public can`t even count on that.

      Like

  3. Instead of constantly trying the public numbers that do not truly exist ,after the forecast ,maybe we should pay attention to the world around us and ask ourselves what the demand really is or isnt

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    • Here you go, r: “After climbing for decades, electricity use by American households has declined over the past eight years.
      “That’s a staggering change,” said Lucas Davis, an energy economist at the Haas School of Business, part of the University of California, Berkeley.
      “The economic recession in the late 2000s contributed to an initial dip in electricity demand, but as the economy improved, lighting and other energy-efficiency improvements continued to drive down household electricity use.”
      This from the NY Times, March 8, 2019. And more:
      “The switch to more efficient lighting has been relatively rapid, Dr. Davis said, because of the short lifespan of traditional light bulbs. While consumers may replace an old refrigerator or dishwasher with an energy-saving model once a decade, incandescent bulbs last only about a year before they need replacing.
      “And that replacement yields huge relative savings.
      “When you take out incandescent light bulbs and replace them with LEDs, the amount of electricity you consume goes down more than 80 percent,” Dr. Davis said. “There’s nothing else like that.”
      The included graph shows the U.S. dip in electricity consumption started in 2010… later than B.C.’s plateau. (The article doesn’t go into the growth of home-based solar panels, which would also cause a dip in the grids’ meters — without being an actual lessening of e-use.)
      Interesting read: https://www.nytimes.com/interactive/2019/03/08/climate/light-bulb-efficiency.html?action=click&module=Top%20Stories&pgtype=Homepage&utm_source=digg&utm_medium=email

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  4. Good work Norm. We the customers of B.C. Hydro are stuck with the bill and Campbell and his friends still have the money.

    Criminal charges would be nice. However, given the level of proof required to “make a case”, it is doubtful Crown would be successful. We’d most likely see another rush of early onset momentary dementia, much like we saw during the B.C. Rail trial. I do wonder if a civil case would be possible, given the level of proof is lower. It would be “fun” to see what would happen if the NDP cut those contracts with the IPPs and let them take them to court and the NDP/B.C. government took the position, this was on the balance of probabilities a way of enriching a few at the cost of many and did nothing to actually make B.C. Hydro a viable Crown Corp. Its a reasonable conclusion to come to. Of course it might piss off a few LieberCons, but it might save the customers of B.C. Hydro a lot of money.

    as to the MSM during the B.C. Lieberal years all they were was a press release organization for the B.C. Lieberals. You had to search to find any of them critical of the B.C. LieberCons.

    Even Sam Cooper’s reporting didn’t start until the B.C. LieberCons were out of office.

    Once again, Norm, very good work. Without you and some of the other bloggers many of us in B.C. would never have known any of the information which you provided. You and several others who write blogs have become the news providers in this century, not the radio and t.v. stations, or the print media. They are the press release agents for the B.C. LieberCons and simply report on the shootings of gangsters along with road accidents. On Global did report on “news” late Saturday night. It was the “20th anniversary” of the raid on Glen Clark’s home. yes, that was the news item. I made me want to puke. Don’t know why they hate the man so much or what the agenda, but really the 20th anniversary. Many in this province weren’t even alive or aware of the incident. glowball ran the original film, made sure to advise there were criminal charges, oh and yes 3 years later Glen Clark was found to be not guilty. they did mention today he is the CEO of the Patison Group. they had B.C.’s very own version of “rat fucker”, John Daily on, to review it all and then blame Glen Clark for his situation by saying if Clark had only come out of his house to speak to the press, this would all have gone away. That is the type of news we get in B.C. Makes me wonder why they didn’t have a 20th anniversary of Robert Sumer’s conviction and going to jail, Van der Zalm’s acceptance of cash from that woman, a 20th anniversary of Gordon Campbell’s drunk driving conviction and being forced out of his position as premier by his own caucus, and all the other crimes and misdemenours of the Socreds, B.C. LieberCons–allegedly.

    Ah, perhaps they ran the piece because even after all these years Gordon Cambpell still doesn’t have a real job, he is still at the public trough and Glen Clark is the C.E.O of an incredibility large and profitable privately held corporation. Gordon Campbell is being investigated for sexual assault in England.

    Liked by 4 people

  5. Well done, Norm and other advocates for sanity and prudence at BC Hydro.

    Despite recently hailing Gordon Campbell as a “Visionary” for the BC Libs’ IPP push — I suspect Andrew Weaver will have to bite his tongue and vote for this motion?

    I guess Mr. Weaver could say that his vision has improved since then, as it has regarding the Site C project, which he approved of before getting into government.

    Liked by 2 people

  6. I’m sure I’m not the only one who feels all warm and fuzzy to see Norm receiving well-deserved accolades in our Legislature. It is nice to see his work recognized in this manner. But his work is worthy of much more.

    The stable door has been closed; in large part to Norm’s efforts bringing attention to the fact it was wide open. The horse however, bolted some time ago. We need to know who left the stable door open and whether they might have been astride our horse when it left the stable. Just so we don’t rehire a stable hand that costs us another horse.

    I suggest we all share this with Sherrif Horgan and request that he conduct inquiries.

    Liked by 3 people

  7. Premier Speeches: El Gordo
    http://www.llbc.leg.bc.ca/public/pubdocs/bcdocs/338638/index.htm

    2009

    IPP

    http://www.llbc.leg.bc.ca/public/pubdocs/bcdocs/338638/2009/nov_2_independent_power_producers.pdf

    Page 1 of 8

    And I can tell you you’re very, very well-represented by two I think not just strong advocates but really public-spirited and public-minded people, and I want to say a special thank you to Harvey Campbell, my COUSIN Harvey, and Don McInnes, both of whom have never lost track of the fact that what we’re talking about today is how we accomplish broad public objectives that make the world a better place not just for US in British Columbia but in other jurisditions as well. I’d like you to join me in saying than you to both Harvey and Don.

    Liked by 1 person

    • Thanks, NVG.

      It’s refreshing that this is actually available to the public and hasn’t been shredded.

      My take-aways from Campbell’s 2009 speech to IPP proponents, quoting Mr. Campbell below:

      “Number one, electricity
      is not free. It feels free sometimes to people. I’ve noticed that people don’t even think
      about the waste that they put into the system, the literally thousands of kilowatts that
      we lose as a result of people not thinking about the fact that it costs money and
      resources, their money and their resources, to generate. I can tell you in my job
      there’s lots of times when I wish the lights were a little lower. It doesn’t work for
      everybody, but it works for me.”

      “It’s important for us to recognize that as we do
      that we have to build an independent power sector that has confidence in government
      and confidence in the direction that we intend to go. So as you know, last week we
      made the announcement that we will no longer be relying on Burrard Thermal to
      provide power in the future in British Columbia. Emergency power, yes, but it will not
      be part of our long-term power plan for the province of British Columbia”.

      “There are a number of reasons for that, not the least of which are the health concerns
      which we identified almost 13 years ago as a reason for closing down Burrard
      Thermal. There are also greenhouse gas concerns that we have, which is calling upon
      us to close down Burrard Thermal except for emergency uses. There are also
      economic benefits, about $100 million or at least tens of millions of dollars over the
      next decade that we will save in terms of maintenance and ongoing capital costs for
      that facility. But we have to have the investments stepping up to make sure that they
      fill that potential demand gap that exists for us in the province, and we’ll do that.”

      (My thoughts: And for up to $100 million in repairs, we could have avoided the $800 million — per year — in overpayments for IPP power. Even a total new build for less than $2 billion, as in the 860 MW Shepard Power plant at Calgary, would have given close to Site C output. Campbell knew numbers; how could he be so blind to this $$ gap?)

      “It means that B.C. Hydro can no longer include the 6,000 gigawatt hours of potential
      annual energy for their planning purposes, and that 6,000 gigawatt hours of power
      will be met through new, clean energy production. That energy has got to be costeffective
      and it won’t be bought at any price.”

      (My thoughts: “No… we’ll peg the price at 3 to 4X the market value.”)

      “We intend to have four specific task forces in place: the task force on procurement
      and regulatory reform which will recommend improvements to BC Hydro’s
      procurement and regulatory regimes, to enhance clarity, certainty and
      competitiveness in promoting clean and cost-effective power generation.”

      “I’ve been in this job for a little
      bit of time now, and there is no end of people who visit me after visiting ministers and
      say something along these lines: Premier, with my brain and the taxpayers’ money
      we’re going to make wonderful music together. This is not about the taxpayer or the ratepayers doing something on your behalf. It’s about you doing something on the behalf of the ratepayer.”

      (My thoughts: it seems that everyone stopped listening after the music part. Campbell and Clark were masters at saying they’d do one thing, before pulling a 180… which was actually the way they were headed when they said they weren’t, so technically not a 180, LOL!)

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  8. There must be some way to break these insane IPP contracts. They are ludicrous.
    We saw that bizarre recap re Glen Clark that Global did on Sat. Nothing is too low for that scuzzbag media and it was full of misleading info. Not guilty in the courts but still guilty in Global’s eyes.
    Thank you for everything you do.

    Liked by 1 person

  9. I, for one, await with bated breath that deep dive report on the citizen journalist who has helped to change government policy from that most illustrious local media maven who takes ‘idiot bloggers’ to task at every opportunity.

    Or some such thing.

    .

    Liked by 1 person

  10. What happens next will be interesting, as this public knowledge thanks to Norms educated inspiration will go somewhere I’m sure.
    Reflected in the cancellation of the Liberal government oversight makes Muskrat Falls looks like child’s play.
    ” Are ye a helpless citizen you muckle?
    There is a lovely case of prosecutable political fraud in there somewhere, and when convicted puts this business to shame.
    It can’t be said then BC isn’t business friendly.
    I can’t wait for the entertainment to start.

    Liked by 1 person

  11. “The majority of IPPs are producing power from either run-of-the-river projects or wind. Regardless, BC Hydro was already awash in excess electricity production from its own heritage dams, such as WAC Bennett, Peace Canyon, etc. Yet, the government of the day (BC Liberal) created a >>>>false need for more electricity<<<<<<< and, empowered by legislation, requires that BC Hydro purchase this artificially high-priced IPP power.
    ………
    1) (BC Hydro) Deferred Regulated Accounts: $5.5 billion
    2) Long term Contractual IPP costs: $51 billion
    3) IEP grid/facility maintenance: $20 billion
    4) Site C capital costs: $10.7 billion
    So, without knowing about any other extraneous costs, it’s fair to say BC Hydro (aka the ratepayers of B.C.) will be responsible for a whopping $87.2 billion debt load."
    Above quote is from an article from Mar. 7, 2019:
    https://www.alaskahighwaynews.ca/opinion/columnists/rick-koechl-mike-kroecher-growing-debt-load-weighs-heavy-on-bc-hydro-ratepayers-1.23656265

    Like

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