BC Hydro

New Era of Truthfulness at BC Hydro?

BC Hydro maintains an expensive bureaucracy dedicated to spending billions of dollars. Despite no growth in domestic ratepayer demand since 2005, assets employed by the utility tripled from $12 billion to $36 billion. And the company is adding more than another $10 billion to its balance sheet.

In BC Hydro’s most recent annual report, the company boasted about “one of the largest expansions of electrical infrastructure in British Columbia’s history.”

To gain approval for massive spending, BC Hydro doctored load forecasts, issuing a steady stream of pronouncements about demand increases.

Despite evidence published in the last 14-years of annual reports, BC Hydro made no admission that demand was not growing as they had been predicting.

Until now.

This week, utility managers shelved the Metro North Transmission Project. The given reason runs contrary to statements that justified the company’s aggressive borrow and spend policies.

Has BC Hydro adopted a new policy of honest disclosure, or is this a peculiar anomaly?

Time will tell.

Categories: BC Hydro

19 replies »

  1. Last month, BC Hydro invited users to become feedback panelists. I put it off till today, when I answered a few minutes of questions before being accepted. (I guess I fit the desired demographic.)

    I suspect Hydro will be careful in what they look for feedback on — I doubt they’ll be asking about what I think about IPP contracts, for example — but I’ll give it a go and see what they are about.

    Anybody interested? Here’s the link:

    BC Hydro: “Tell us what you think. No, really.”

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    • I signed up with them a few months ago, I got one fairly decent survey, on conservation, trying to be as helpful as I could. I got one more short survey that was circular in design, taking you back to the answer you gav before to see if you wpould change your mind under other circumstances. And I haven’t heard from them since.

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    • OTHER category includes different system uses but not power flowing to BC Hydro’s domestic residential, commercial and industrial consumers.

      Some years ago, OTHER began to include include deliveries of power outside the province that the utility didn’t wish to include in trade sales. This gave the appearance that demand by BC consumers was growing. The disinformation strategy worked too as many people reviewing BC Hydro statistics didn’t catch on.

      For example, in the ten calendar years ended 2011, OTHER sales averaged less than 1,900 GWh. In 2015-2017, OTHER was more than 7,400 GWh.

      Another change made by BC Hydro to obscure information was its discontinuation of separate reporting of trade sales of gas and electricity. After September 2016, those numbers were combined, as to dollar and quantity amounts. This was probably to avoid being embarrassed by critics noting BCH was realizing far lower prices for its exports of surplus electricity than it was paying IPPs to buy electricity that created surpluses.

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  2. BC Hydro has an unblemished record of being frugal with the truth about demand for about 20 years.

    Listening to their public presentation at a meeting in Victoria in 2012 , I asked the Director of Forecasting why the projected BC population rate of increase was more than double the rate used by the credit rating agency and by BC Government Statistics. The answer was that BC Hydro Forecasting office was under instructions to get their GDP and Population growth rate increases from a specified consultant.

    Values for future BC only demand were thereby knowingly exaggerated for residential and commercial customers. Future demand for heavy industrial customers got separate treatment that used aspirational projections gathered from want-a-be customers on Howe Street.

    BC Hydro never intended that projections of future demand be correct . It was and still is the intention of the politicians to find ways of granting financial benefits to financially supportive friends.

    It is no accident that for nearly 20 years BC politicians have decided to remain ignorant of the findings of the BC Law Institute, that the practise of Contract Law in BC is unfair to BC citizens (see their 61 page report No. 60 of September 2011}.

    The list of supportive funders in 2010 included the “Department of Justice Canada” which might help the reader to better understand why the Federal Minister took issue with SNC Lavalin.

    Liked by 1 person

    • If on track the Annual Report should have been posted at the beginning of July. What is more troublsome is the absence of an Annual Report for three years.
      This is because then Minerster of Energy on down is supposed to sign, signifying his/her conformance with the Provincial law for Crown Corporations.
      Because signing an Annual Report is a legal event that the Minister and BC Hydro Board/Executives have not been prepared to take on , they have delivered a “Service Plan” instead. You can check but I think the substitution began for Fiscal 2016.
      If these folks cannot or willnot sign an Annual Report I wonder if they have the legal authority to sign Site C contracts?
      A big wait for me is to see if BC H delivers a “Service Plan” again this year.

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    • The annual report for the 12 months ended March 2018 wasn’t released until late August 2018. No doubt the release was delayed as the relatively new NDP government wrestled with possible changes to accounting principles employed.

      I recommended they write off all the seriously overvalued “assets” BC Hydro had accumulated when Liberals wanted “profits” exaggerated by deferring recognition of operating expenses. Cost deferrals can be appropriate if they are smoothing results in the short term but BC Hydro’s deferrals kept going up, up, up.

      A write off of worthless deferred costs would have been sensible but would have resulted in a massive ($5 billion or so) loss. That would have been reflected in the province’s public accounts and the NDP government didn’t have the nerve to report the province had a big deficit in Horgan’s first year of administration.

      That’s understandable because Liberal pals in the Press Gallery would have had a field day telling only part of the story. Political realities ruled the day.

      Liked by 1 person

  3. In 20 yrs. 40% increase in demand???? were they smoking our best product again or what. Appliances are becoming more efficient. Did they think the population would increase by 40% in 20 years? Even in 20 yrs. people aren’t going to be all driving electric cars. Its less expensive to purchase a small fuel efficient car for commuting. No some one was smoking

    Perhaps some one started asking pointed questions over at Hydro and they thought they might have to start telling the truth because some were in fact simply asking questions and given the b.c. lieberals are no longer in office, the questions might have to be answered. We could check to see if some one or several some ones have retired or some one went over and had a frank and open discussion with somebodies. lets hope this run away cost increases have stopped. we simply won’t be able to pay for it, not that I expect to be here in 20 yrs, but all the same……….

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    • In physics, inertia is “a property of matter by which it continues in its existing state of rest or uniform motion…”

      Corporate inertia is a term used to describe an established company that remains rigid in its thinking and actions rather than being open to changing industry and company dynamics.

      There is a material reason for corporate inertia (no, not smoking something) at BC Hydro. The company employs many well paid engineers and other professionals whose entire careers involve construction and installation of new generating and distribution assets. They lived until 2005 with certainty the province’s demand for electricity would increase at about 1.75% a year. The only uncertainty was whether growth would be a little below or a little above that mark. Expansion was part of the company’s DNA.

      The corporate memory also included knowledge that surplus energy could be profitably sold outside BC. For example, trade sales in FY 2001 & FY 2002 amounted to $12.85 billion in 2019 dollars.

      All that changed when demand growth stopped and clean renewable energy became available in BC Hydro’s traditional markets. But, slowing down the machine would have had negative financial consequences to people within the utility and its network of consultants and suppliers. The company’s executives made a conscious choice to ignore the evidence of change and proceed as always.

      BC Liberals assisted by appointing one of their loyal soldiers as CEO even though she had no utility experience. They also changed the makeup of BCUC, the provincial regulator, and restricted its ability to regulate. Liberals were a dedicated party of business and their instinct was to protect corporate interests at the expense of public interest.

      Liked by 1 person

  4. It should be mentioned here that at the turn of the century BC Hydro was participating in the Enron fraud which produced huge amounts of unearned revenues from sales to California. This was why Mr. Campbell got nowhere trying to sell surplus electricity by calling run-of-river supply as “green” electricity , a designation that commanded a premium price per MWhr.

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    • Indeed. In FY 2001, BC Hydro’s trade sales averaged 23¢ a kWh. In FY 2002, 19¢ a kWh.

      In FY 2003, after fraudulent dealing ended in the USA market, BC Hydro’s trade sales averaged only 2¢ a kWh.

      To settle a lawsuit by Americans, BC Hydro had to give lawyers and California consumers the better part of $1 billion. That was more than half of the illicit profits gained by gouging American consumers.

      But, the people doing BC Hydro’s international trading didn’t have to give back any of their large salaries and bonuses.

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  5. The Metro North project would be burying transmission lines through Burnaby about the same time the Transmountain/Trudeau Pipeline is to be buried and by the looks of it the two will have to cross near the pipeline terminus and tank farm.

    Anybody know whether there are conflicts with rights of way, project scheduling, or mitigation factors involving high voltage lines near oil pipelines?

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  6. What a time it would be to see BC Hydro management or anyone prosecuted for overseeing the doctoring of and lying about forecasts. It’s fraud. Ah, just dreaming. So much for a thouroughly useless justice system and it’s leaders. Politicians.

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    • Criminal Code (R.S.C., 1985, c. C-46)

      Spreading false news
      181 Every one who wilfully publishes a statement, tale or news that he knows is false and that causes or is likely to cause injury or mischief to a public interest is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.

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        • I guess it would be inside the ball park and close to home plate to say the NDP’S Attorney General and Master Horgan would not do a darn thing unless there was overwhelming public pressure as was the only reason for a public inquiry into money laundering. And even then it was a major effort for the timid John Horgan to make a decision. I say the NDP’S Attorney General because i think they are completely owned and operated by the party with no independence. No difference than those under the BC Liberals. Though I think worse under them. It’s all politicized. Justice is a sham and a rag doll when it comes to taking on corporate crime. On the Federal side of things, I think Jody Wilson Raybould gave us a glimpse into what a real Attorney General is. To bad corrupt political/corporate influence put a damper on things. But she fought the good fight ,held her ground and won the moral high ground and the rest like Trudeau and his coward caucus and his SNC corporate friends got put to shame. David Eby and the ones before him should be envious.
          We should remember that BC Hydro is the peoples crown corporation too, and it should be even more concerning to us when malfeasance has been present . We should be demanding justice on all fronts concerning our crown corporations when fraud and criminality is evidenced in those institutions, just like the public demanded for money laundering.

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  7. Hydro has always been an instrument of ‘economic development’. I would say that it has been used to develop big industry, it has been used to appeal to big labour, and in each case the politicians probably see their leanings as in the best interests of the people of BC. The Crown Corps style of action has also always been to vehemently proclaim growing demand. Robert Bonner often said that if a dam at site c didn’t get built by the mid 80’s we would all be freezing in the dark. Fortunately during his tenure as head of Hydro there was a massive recogniytion across the province that a lot of damage was being done because of that governmental leaning.

    The BCUC was formed and given a solid mandate and staff and funding to follow through on the mandate. It looked at site c in 83 and told Hydro if growth rates went up considerably then Hydro could re-apply. Hydro has been trying, and spending about half a billion dollars over the years since trying to convince people that the demand was going up and they had to get to work on the dam. And we know that this new generation of politicians have fallen back into the same self perpetuating myth of economic development despite having been shown that it really is un-economic.

    Your question was is Hydro coming clean or is this just a one off in the case of the transmission line in the lower mainland. I would expect it to be the latter given the earnestness with which Hydro is still trying to spend the province out of debt in the North east.

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