BC Hydro

BC Hydro's long-standing culture of deception

Each winter, BC Hydro issues press releases asserting unprecedented demand for electricity by consumers, a claim corporate media repeats with little or no examination.

The strategy is have ratepayers and taxpayers conclude that massive capital spending and higher electricity prices are necessary to ensure growing needs of consumers can be met.

BC Hydro has been saying for the past two decades that demand growth is inexorable. I took these words from BC Hydro’s website on March 6, 2020:

As B.C. grows, so does energy demand

From the 1960s through the 1980s, we built six dams to meet the energy demands of a province whose population almost doubled in 25 years.

Electricity demand in B.C. is expected to grow by another 40% over the next 20 years. And while we will continue to lean on conservation as the first and best way to meet demand growth, we must reinvest in our aging assets and prepare to invest in new assets like the Site C Clean Energy Project.

Because citizens assume that population growth translates into demand growth, they readily buy the corporate spin.

But, BC Hydro has been using the line about 40% growth over 20 years for a very long time, even though their financial records show that sales to residential, light industrial/commercial, and large industrial consumers in BC have been essentially flat since 2004.

Despite no demand growth, BC Hydro’s capital spending has been immense. The evidence is provided by the company’s financial statements.

To survive over the long term, successful businesses need management that adapts to changing conditions. Easier said than done apparently, because only 14% of companies on the original 1955 Fortune 500 remain there.

Some of the once wealthy corporations that disappeared from the list:

  • Blockbuster Video,
  • Kodak,
  • Sears,
  • Pan-Am,
  • Blackberry.

A significant factor in the degradation or destruction of those companies was organizational inertia, something influenced by:

  • Successful past,
  • Limited competition,
  • Unaccountable management,
  • Timid, inexperienced or unqualified boards of directors,
  • Excessive loyalty to workplace silos,
  • Lack of situational awareness.

BC Hydro had success throughout its first four decades. It has had little competition but that is changing because self-generation is becoming economic.

During the last decade, top management has been appointed by the Premier’s office and politics has ruled the choices. Similarly, directors have been subject to tests of political loyalty or the needs of a smooth-running patronage reward system.

The utility has powerful operational silos, including the engineering and design group whose members might be working elsewhere, but for the company’s intensive capital spending.

Lack of situational awareness is best demonstrated by BC Hydro’s massive and long term commitments to private power, given with the expectation of high export prices. Private power suppliers (IPPs) enjoy inflation-protected contracts paying prices substantially above market value.

Additionally, the utility’s failure to embrace modern renewables as prices of the technology dropped steadily is further proof senior management lacked perception of industry directions. Even worse, they denied the trends, even when obvious to anyone paying attention.

Serious storm clouds lie ahead. The only customers that create positive cash flow for BC Hydro are the residential, light industrial and commercial consumers.

Political commitments have been made to sell power to heavy industry, including oil and gas operators, at a fraction of the average price BC Hydro is paying to buy electricity.

That means individuals and small business operators will be paying ever increasing electricity prices because someone has to suffer for corporate incompetence and it won’t be managers or large customers with political influence.

Site C will be losing additional amounts when delivery of its costly power is made to gas producers and processors. Since the prices will be below actual cost, BC Hydro’s vulnerable customers will suffer. Of course, residential and businesses that consume comparatively small quantities of power will pay significant price increases.

Some people believe the BC Liberal strategy was to weaken BC Hydro so that it could be privatized. That is not a goal of the present government but in almost three years, John Horgan’s administration has steadfastly clung to energy policies put in place by their predecessors.

There is no reasonable explanation for maintaining bad policies and excusing BC Hydro’s misdirection. These were well understood by the NDP before May 2017.

Probably, the Horgan Government lacked courage to change direction on matters financial and is determined that voters see their party as a kinder version of the business friendly Liberals. NDP leaders hope that is a ticket to electoral success.

Categories: BC Hydro

13 replies »

  1. Well, the NDP is quite wrong on that assumption! We see the current government as just another Liberal government with their hands deeply in the pockets of the taxpayer .
    Who is benefiting here? The usual suspects.
    The continued mismanagement of B.C. hydro should have been attended to from the day they were voted into power.
    Instead, this corruption continues. A crumbling Site C continues razing fertile lands built ostensibly to support LNG, which threatens the health of the planet. CGL continues to trample Indigenous Territories using militarized violence, fracking continues unabated, leaking wells are abandoned by corporations .
    Lack of “Situational awareness”, incompetence and misplaced loyalty are words to kind to describe what is happening.
    Outside of the Legislature bubble this wreckage is patently obvious to the people on the street.
    If the only people awake in that bubble are The Greens, let’s get many more of them in there.

    Like

  2. Criminal Code:

    * 400 (1) Every person is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years or is guilty of an offence punishable on summary conviction who makes, circulates or publishes a prospectus, a statement or an account, whether written or oral, that they know is false in a material particular, with intent
    * (a) to induce persons, whether ascertained or not, to become shareholders or partners in a company,
    * (b) to deceive or defraud the members, shareholders or creditors, whether ascertained or not, of a company, or
    * (c) to induce any person to
    * (i) entrust or advance anything to a company, or
    * (ii) enter into any security for the benefit of a company.
    * (d) [Repealed, 1994, c. 44, s. 26]
    * Marginal note:
Definition of company
(2) In this section, company means a syndicate, body corporate or company, whether existing or proposed to be created.

    If a Crown Corporation repeatedly publishes a statement about a material basis for investing public resources, and that statement has been repeatedly shown to be false, what other motive would there be but to deceive its shareholders?

    And who is accountable?

    Liked by 1 person

  3. I notice from your graph of the Average Residential Revenue that it has more than doubled (from 0.06 to slightly over 0.12) in the last 13 years! More than the cost of living, I expect.
    One good thing, it speeds up the ROI for solar panels!
    It got me to wondering if I could incorporate myself and qualify for a corporate rate for electricity?

    Like

  4. A few of us have been questioning need as presented by BC Hydro for more than a decade. Those on this page have been part of the questioning because we all like to be logical and mostly have alway tried to be accountable for what we say and write.
    Afer a few years of commenting about how unreal the BC Hydro projections were , called wrongly forecasts by BC H, I had occasion to listen to a presentation by Director of Forecasting in Victoria.
    After reading his handout I privately asked him why the population growth value used in developing the “forecast” was at twice the rate used by StatsCan , BC Gov Stats and the provincial credit rating agency.

    His answer was that he was under orders to get his population growth values and GDP future values from a specified private consultant.

    Is it any wonder so little computes in the past decade or more.

    Good luck getting anyone into a court of law.

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  5. Wind; Solar; thermal power?

    All soon to become very competative with hydro power.

    There is great scope in this country today to devise a “power pack” of sorts with a wind turbine and solar cells which could be inexpensively available to homeowners to provide partial powwer generation.

    With such devices, power failures would not mean total darkness and there would be power available to keep essential devices operating such as fridges and freezers.

    These electrical generators could also feed the main grid, eliminating the need of future power generation projects.

    Hydro has done nothing to ensure that these “power packs” be part of new home construction, which is now the norm for new homes in many parts of Europe.

    Like

    • That’s what we would expect from the sleaze crown monopoly BC Hydro. Let’s see, I wonder how much the pathetic “got to close to government officials and big wigs press gallery people would be on this great sensible new cleaner energy.

      Like

  6. And that A..hole Premier and two faced Mungal of BC gave into the Hydro master and special interest and sqaundered how many billions on Site C, instead of putting that money towards solar wind and possibly thermal and the technology that builds it and mass sustainable jobs that go with it.

    Like

    • I doubt that Michelle Mungall was involved in the decision to flood the Peace River valley and destroy some of BC’s best farmland. Site C was against everything she stood for before appointment to Cabinet.

      As Energy Minister, she was a place-holder. Her department was run by highly paid bureaucrats and BC Hydro’s direction was set in the Premier’s office.

      Ms. Mungall failed to stand up for principle and will likely be out of a job after the next election. Voters may not be able to influence policy much, but they can punish the spineless politicians who say one thing, then follow an opposite path.

      Liked by 1 person

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