At the legislated deadline, just before summer’s last holiday weekend, BC Hydro released financial results for the year ended March 2021. The utility’s annual service report contains pages of interest to serious analysts, but most of it is bumf, likely read only by the company’s PR minions. But a few pages reveal information they’d rather people ignore.
If you’ve read articles about BC Hydro accumulated here over the years, you likely know what would be written again. These charts might say more about British Columbia’s public utility than its 117 page annual report. All charted data is from BC Hydro annual reports.
First, consumption. Despite the utility’s constant lies about steady growth, demand has been essentially flat for 17 years.
Since 2005, BC’s public utility empire expanded dramatically but units of electricity sold to BC Hydro’s residential, commercial and industrial consumers was essentially unchanged. To deliver similar amounts of power, the assets employed more than tripled.
As a conservative, Premier Campbell claimed to oppose “borrow and spend” policies. But those are exactly what he required of BC Hydro. During 17 years of flat demand, the utility’s liabilities soared:
Part of the company’s massive spending resulted in an 18% increase in the company’s capacity to generate hydropower.
Despite flat demand and additional internal capacity, purchases of private power from IPPs quadrupled.
So, how does BC Hydro stay afloat?
By increasing prices.
Forgotten is the W.A.C. Bennett strategy of using low cost power to reward citizens and encourage business growth with inexpensive electricity.
A prominent litigator who sat on the Board of BC Hydro years ago was reputed to have said, “Never waste a good settlement on our client.”
That attitude was modified at BC Hydro to, “Never waste the benefit of cheap power on our customers.”
When Gordon Campbell was Premier, his philosophical direction was to privatize BC Hydro. But he knew the politics of that would be messy. Perhaps fatally messy to his political career. Instead, Liberals privatized a large chunk of the utility’s present and future wealth, writing contracts with independent producers to buy private power worth more than $60 billion.
In a year when other North American utilities were contracting to buy a kilowatt-hour of wind power for around 4¢, BC Hydro was paying IPPs 12¢.
Prices paid IPPs had little to do with market value or cost of production, and the secret contracts had annual inflation escalators. Additionally, volumes of private power supplied had little to do with demand for electricity by BC Hydro’s domestic customers.
Had BC Hydro been managed prudently, business and residential consumers would be paying substantially less for electricity.
But that’s has not been the objective of the utility management or governments led by Campbell, Clark and Horgan.
Categories: BC Hydro