BC Hydro

Money for nothing…

In the year ended March 2021, BC Hydro bought 14,630 gigawatt-hours of electricity from independent power producers (IPPs). The utility paid $1,403,000,000 for that power, an average of $95,899 per gigawatt-hour.

Meanwhile, BC Hydro sold surplus electricity on trade markets. It realized $42,520 per gigawatt-hour on those sales, a per-GWh difference of $53,379.

BC’s private power scheme was constructed after Enron’s market manipulation had driven wholesale electricity prices in the California toward $400,000/GWh.

Gordon Campbell’s Liberal government required BC Hydro to spin off its transmission system to a new company that would provide facilities to all, including nascent independent power producers. The IPPs expected to profit hugely by selling low cost power to American markets.

However, order was restored to electricity markets in the western USA. In the first quarter of FY 2002 BC Hydro’s trade sales realized $376,518 per GWh. In fiscal 2003, revenue was down 95% to $20,268 per GWh.

If BC’s IPPs had to sell on the open market, their returns would be modest. So Liberals decided that BC Hydro would contract for the private power, based not on market price, cost of production, or the utility’s need for electricity. BC Hydro would pay prices that guaranteed successful privatization of public wealth, something that made Gordon Campbell’s heart beat faster.

To promoters, the arrangement was spectacular. Unbreakable contracts backed by British Columbia allowed the fortunate few to finance projects with minimal equity and almost zero risk. For many, that presented the opportunity to begin a project and quickly flip it to one of many long-term energy investors. The result? Instant low-tax rewards.

So the deals with BC Hydro were great for IPPs. How were they for the province’s electricity consumers?

Costly!

In ten years, BC Hydro paid Independent Power Producers more than $5 billion above the price it was selling equivalent amounts of electricity through trade.


Categories: BC Hydro

5 replies »

  1. …The BC situation is a case of past politicians bringing in “policy” favouring what I call “the old boy’s network” to continually put money into pockets not deserving of it. Unneeded schemes of (independent) power production were established merely to make a return on investment, not because they were needed. Both electricity consumers of all types and the general public through provincial income taxes are being taken to the cleaners to enrich undeserving people.

    In the process, a once proud engineering company, BC Hydro, is made to appear like a ship of fools. There is no way the technical and rate-setting people at BCH would have implemented this scam on their own. And where is the independent Utilities Commission that reviews electricity rates in your province? The consumers’ voice? Nowhere to be found, or so hobbled by government “policy”, they are reduced to living in Alice in Wonderland dystopia just like BCH, as money is continually siphoned off for free into undeserving pockets. Corruption from where I sit…

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  2. So why isn’t this news broadcast every day in the Vancouver papers? Why is the BC Liberal Party protected from us knowing this?
    I guess we in BC really are sheep.

    Why are we not rioting in the streets?

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  3. When I was cycling with my grandsons, we came across a brother and sister who had set up stores in their driveway, on two big cardboard boxes.

    The boys checked out the goods: toys, cards and crafts — most of in good shape but just surplus to the store-owners’ needs.

    Problem was, I had NO money on me.

    No problem, said the entrepreneurs. They would GIVE the boys some money so they could spend it at the stores. They had no other customers.

    Okay…

    The 10 year-old bought something from the girl, then took it over and traded up for more stuff at the brother’s store — then went back and did more trading with the sister. Eventually, he ended up with four or five items.

    The 7 year-old didn’t actually want anything but he took his 25 cents and traded it up to a loonie.

    As we rode away, everyone was happy with the deals they’d made… and I was in disbelief.

    Just now, I realized how sophisticated the young store owners were: operating just like B.C. Hydro.

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  4. go0rdon Campbell’s corruption continues to this day as the NDP are far too spineless to change it.

    The mainstream media, long ago took their marching orders from back east and the IPP scandal would embarrass the money set on Bay Street.

    The public have become comfortably numb, with politics and politicians, like vultures, smell this and continue with their own brands of corruption at a faster pace.

    It will come to a nasty end I am afraid, as the country has become nationally corrupt.

    Who is not afraid to bell the cat?

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