BC Hydro

Electricity policy built on lies

People without facts often accept the idea that electric vehicles will suddenly create massive demand growth. That’s a story spun in this province by people aiming to justify BC Hydro’s long-term spending spree, despite 15 years of flat demand.

No one doubts that in coming decades, demand will grow, partly fueled by electric vehicles. But that growth will be more modest than claimed by BC Hydro’s agents. It could be easily met by conservation and efficiency programs, upgrades to existing facilities and creation of clean, non-destructive renewable sources.

BloombergNEF is a leading provider of primary research on clean energy. It says this about the future impact of vehicle on electrical utilities:

EVs add electricity demand, but not as much as you might think. By 2040 passenger EVs consume 1,290TWh, commercial EVs consume 389TWh, e-buses consume 216TWh and electric two-wheelers consume 69TWh. Combined, these add just 5.2% to global electricity demand. In many advanced economies, EVs prevent overall electricity demand from falling. Overall, the power market can comfortably integrate the additional demand.

BC Hydro has been hiding its real financial results by accounting trickery, including excessive capitalization of expenses and cost deferrals using regulatory accounts. They treat the accumulated expense deferrals as assets. These are shown as positive items on the company’s balance sheet, but they have near-zero tangible value.

This is a game dictated by politicians but it cannot continue forever. The result will be substantial rate increases in the future.

In the 21st century, residential and business consumers facing rapidly rising electricity costs will seek alternatives. One will be solar power generated at home or business. Beam Solar is just one of many cleantech companies providing EV charging systems.

Site C proponents argued that power dispatchability was a critical factor that justified flooding more than 50 miles of the Peace River valley. But that, like other justifications put forward by dam builders, is a lie. In 2018 Europe, wind and solar met 42% of electrical needs.

Batteries for storing electricity are becoming more efficient and less costly. Forbes Magazine reports the price of batteries for a vehicle has fallen “from $2,500 a kilowatt-hour to $400 — and on its way to $100.”

I am reminded of being told in the mid 1970s that a one gigabyte computer hard drive would cost millions. Today, I can buy a tiny 256-gigabyte memory card priced at 20 cents for each GB. That sort of technological advance will affect energy markets because going forward, dealing with climate change must be humanity’s number one priority.

Unlike many commentators on energy, I don’t have a financial stake in the outcome. No one pays me to take a position. If the Horgan Government reverts to the promises they made prior to the 2017 election, I will gain what every other citizen of BC gains. Nothing more.

Categories: BC Hydro, Energy, Site C

15 replies »

  1. Well said Norm. If any of your readers want to understand the process being loaded on to BC citizens and rate payers, take a few minutes to read “The New Confessions of an Economic Hit Man ” by John Perkins.

    The formula John was taught and used was as an economist/consultant for various US lending agencies, was the deliberate exaggeration of future need of electricity ,like +19 % growth in demand for each year from 1 to 5 then falling off to an annual growth rate of increase of +16 % for the next 20 years. This was for borrowing purposes for one Indonesian Island.

    Off the record, but said to me in a Victoria meeting in 2012, BC Hydro were under orders to get their BC population growth values and the GDP future values from a designated private sector consultant.

    What is possibly the reason for all the indirect borrowing by BC Hydro signing secret contracts? I suspect it is to get ownership of fresh water resources.

    We shall see. Erik

    Liked by 1 person

    • Thanks for your comment regarding secret contracts and more specifically the IPP contracts that were signed by our friend Gordon Campbell. The argument advanced by Ledcor and others supportive of BC Liberals went from greed to future greed. IPP promoters advanced the idea they should be entitled to the use of water behind the dams for power generation as the water was for common use. Their argument stated they could provide electricity for less cost than BC Hydro. IPP were then given the bloated prices to produce electricity from run of the river projects. We know how that effected BC Hydro cost of purchasing their power. The future agenda item for the IPP was the free water (no water rights cost) from the river projects that easily divert water into large pipes for future export to their customers with zero return to BC residents. If anyone is curious just look at the water value in San Diego County. The Water Authority charge US$1,341 per acre foot to the water distributors (companies) who then sell to the 3.3 million residents of the County. So far the water distributors are very profitable and will continue to prosper as the commodity supply is limited and the water demand will continue. IPP in BC are very aware of fresh water resources.

      Liked by 1 person

    • Oh, they’ve spent far more than than that.

      By the time Site C is completed—if it ever is— BC Hydro’s total assets will exceed $50 billion dollars. The number was less than $12 billion in 2005, and they sold more electricity to BC consumers in 2005 than in 2020.

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  2. “If you tell a BC Hydro lie big enough and keep repeating it, people will eventually come to believe it. The BC Hydro lie can be maintained only for such time as the NDP can shield the people from the political, economic and/or environmental consequences of the BC Hydro lie. It thus becomes vitally important for the province to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the NDP.”

    This is how the peoples business is done today. The truth is indeed the enemy of the NDP, thus the NDP must continue to lie.

    The same is true for civic and federal governments.

    The big lie is not sole domain of the NDP as all politcal parties now accept the big lie as a necessary to obtain government, obtain power

    Horgan has not learned that the NDP came to grief with the FastFerry lie and both the Liberals and NDP share the TransLink/SkyTrain lie.

    The truth has now become as rare as proverbial “hens teeth”; honesty is not in the lexicon of politicians.

    Liked by 1 person

  3. Breach of public trust and/or fiduciary duty?
    Before it was 20 years of 2 % growth now 1% ..even thats too high?

    Site C announcement soon?

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    • I would argue the fast ferries project was well intentioned but badly implemented. You can’t say that about Site C or other of BC’s megaproject, such as LNG Canada and the Broadway subway.

      Fast ferries proved the Dunning–Kruger effect correct. It is a hypothetical cognitive bias stating that people with low ability at a task overestimate their ability.

      On the other hand, Site C is a pernicious scheme pushed by self-interested individuals. Horgan’s cabinet knows full well that PowerBC was a more appropriate policy for citizens of BC. Unfortunately, the Premier concluded it wasn’t most appropriate for the special interests to whom favours were owed.

      Liked by 1 person

      • The Fast-ferries were originally conceived for a 40 minute, Iona Island to Gabriola Island service and a bridge was to be built from Gabrioila to Vancouver Island in the vicinity of Dukes Point, replacing the Ferry service.

        The islanders revolted and in a tight provincial seat the Socreds stopped this plan, but the NDP in inherited the ferries, which were never designed for any other Ferry route.

        The Iona Island Gabriola Island route made sense from an economic view, faster travel times for both cars and walk on passengers. The ferry’s were designed without bow doors and were intended for cars only and no commercial vehicles. The heavily subsidized Gabriola Ferry would be eliminated, again saving millions of dollars. The service would also take pressure off the Tsawwassen Swartz Bay and Horseshoe bay Nanaimo runs, saving tens of millions in upgrades at all four terminals and highway upgrades.

        After the route was cancelled, the boats had to be redesigned with bow doors, adding weight and badly upsetting their performance. Converting these boats to run on existing routes cost a lot of money and in the end, they were expensive to use and expensive to maintain and the rest is history.

        Harcourt could have stopped it by abandoning construction, but the unions got into the mix and the Fast-ferries were built.

        This sad story about the Ferry route that will never be, was told to me by a former BC Ferry Engineer who worked on the damn things.

        Moral of the story is what is politically bad to do now, maybe very good politically at election time. The Fast Ferry debacle has haunted the NDP for over 20 years; a Site C debacle will haunt them for half a century, if not more,

        Liked by 1 person

  4. Hello NVG. That thought was considered years ago. I remember back in the mid ’60s watching a news program about damming and flooding the Rocky Mountain Trench. Reason? A water supply for the SW USA. Arizona and Nevada was the target markets but other States in between BC and there would benefit too. An American promoter was asked why should BC do such a project. His answer was that Canadians were such good neighbours. I had such strong urge to kick the TV with that statement. Oh, and to the question on how BC would have connection to the rest of Canada? Easy; have ferry service across the flooded Trench.

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    • Mike may be interested to learn that an engineering report on the feasibility of constructing a dam on the Canadian side of the US border on Koocanoosa Lake was submitted last year to the BC Ministry of Resources. A study was done by former cabinet ministers Bill Bennett and Steve Thompson and a committee to increase lake levels for recreation purposes in the summer months when thousands of tourists visit the area. Water levels are drawn down by the Libby Dam in Montana by the US Army Corps of Engineers who now ensure water for all fish species below the dam. We all know that Bill Bennett is a dedicated hunter and angler and wishes the best for all the recreation people in BC and in Alberta who use this area in the Kootenays for fishing and boating.
      The cost estimates are from $400 million to 1 billion. What could go wrong ?

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  5. Sad to hear of the “go ahead” news at Site C today. Not surprised, but still saddened. I put my vote on the NDP, as the only hope of a reversal on the dam. The Greens wanted to stop it but didn’t have a chance of being the majority party.

    As far as conspiracies on damming Site C to supply California with water: why? They could just siphon it off the Columbia, once it has reached Washington State. If even THAT gets environmentalists worried, draw the water just as it reaches tide water and is a few minutes from becoming brackish.

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  6. Hmmmm, accumulated expense deferrals are assets?

    Wow, deferring site c dam indefinitely would be the largest asset they could ever have!

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  7. Well Norm this posting certainly generated a lot of response and rightly so.

    The poor quality of governments thinking has the provincial and federal credit ratings set for downgrades. This naturally translates into higher borrowing costs nobody is anticipating when throwing out future cost values for unfinished projects like Site C.

    The current Canadian CPI is officially running about 1.2% annually . One US source states their CPI is running at about 6%. Private Canadians have claimed to me that our CPI should be about 5% , based on their personal experience.

    The reason for mentioning this condition is that it is evidence of the wrong-headedness of quantitative-easing as practiced by the BoC and others. A short period of very low interest rates is a forerunner to much higher rates, continued currency devaluation , a credit collapse and asset value collapses.

    With private individuals, the cost of being wrong is loss of business/capital and/or employment .

    For politicians and Dep. Ministers I see no consequences. Given the scale of money at risk that somehow doesn’t seem very fair.

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