BC Hydro has long been used for political purposes by governments of British Columbia. John Horgan’s NDP crew is not different than its predecessors. Today, they announced a series of social measures BC Hydro will offer.
- Residential customers who have lost their jobs or are unable to work as a result of COVID-19 will receive a credit to help cover the cost of their electricity bills. The credit will be three times their average monthly bill over the past year at their home and does not have to be repaid.
- Small businesses that have been forced to close due to COVID-19 will have their power bills forgiven for April, May and June.
- Major industries, like pulp and paper mills and mines, will have the opportunity to defer 50% of their bill payments for three months.
- Some customers may also be eligible for BC Hydro’s existing Customer Crisis Fund, which provides access to grants of up to $600 to pay their bills.
- BC Hydro has halted all service disconnections for non-payment during COVID-19 and cancelled all non-emergency planned power outages affecting its customers.
Assisting people in need during an economic crisis is appropriate but government should be doing it, not a crown corporation with commercial operation as its primary function.
These measures could cost BC Hydro $100 million or more and, if the need continues longer than three months, as many expect, the cost will rise. Whatever the amount, it will ultimately be recovered through higher rates for electricity.
Escalating utility prices hit residents and small to medium sized businesses without regard for ability to pay. Through progressive taxation, government has the ability to raise funds from people best able to pay.
Of course, this April 2020 initiative to have BC Hydro deliver economic assistance is tiny compared to the scale of corporate welfare programs the company has been required to deliver.
Until the current Peace River projects, supporting independent power producers (IPPs) has been the costliest program. Those companies have been paid $12.6 billion since 2004, with most contract rates about 3x market.
Site C will cost $12 billion or more and it is not needed to meet demand of residential and business consumers. That’s been flat since 2004 and IPP purchases have more than doubled.
The new Peace River dam will provide power to natural gas producers and processors but they will only pay a fraction of the new energy cost. Additionally, BC Hydro is paying hundreds of millions of dollars for transmission and distribution infrastructure to serve natural gas companies.
BC Liberals put disastrous policies in place for BC Hydro. But the NDP has lacked the courage to alter the utility’s path dependency even though good business management calls for that.
Politics explains reluctance to reshape the status quo. Government leaders want voters to believe the provincial economy is vibrant and expanding and the narrative of steady load growth suits the desired image.
Years ago, BC Hydro developed expansion programs to prepare for demand growth that it projected to be 40% over 20 years. In fact, it still uses those numbers in public communications, as shown today on this web page.
The company’s latest Twenty-Year Load Forecast filed with BCUC cuts by half the expected increases in demand. It says BC Hydro expects annual load growth of approximately 1% for fiscal 2020 to fiscal 2039. Like all the forecasts in the past fifteen years, the latest is fantasy. It will be wrong in year one and it ignores developments in renewable energy and the certainty that distributed generation will lure customers away from the provincial grid.
Unwillingness to change utility directions has created an unwieldy and hugely inefficient behemoth. Look again at the sales chart shown above and then examine this one:
The $12 billion utility delivered more power to BC residential and business consumers in calendar year 2005 than the now $38 billion utility delivered in 2019.
Categories: BC Hydro