In calendar year 2019, BC Hydro paid independent power producers $1.27 billion, which was $826 million more than IPPs were paid in 2005.
Between 2005 and 2019, BC Hydro expanded its own generating capacity 17%, primarily by improvements at Mica and Revelstoke dams.
The power transmission network was expanded for collection and distribution of private and public power. These and other capital expenditures were the main reason that assets employed to serve the utility’s customers increased by 210% from 2005 to 2019.
In summary, from 2005 to 2019 BC Hydro:
- increased the dollar amount of purchases from IPPs by 185%.
- added 17% to its own generating capacity, and
- bumped total assets from $12 billion to $38 billion.
In addition, the company has capital projects underway and planned that will add more than another $15 billion to the asset total.
All of that might be fine if domestic demand were increasing as the company had been forecasting steadily until they finally admitted a “demand dilemma” in May, 2020.
Unfortunately, sales to BC consumers have been flat since 2005. Domestic sales by kWh units were 1% lower in 2019 than in 2005 although the amount charged consumers increased by 89%, which is more than 3x the rate of inflation.
I expect the coronavirus calamity will be blamed for a financial predicament that has been developing but largely ignored for years. For that, heads should roll at BC Hydro’s boardroom and executives suites.