BC Hydro

BC Hydro and the illusory truth effect

Misinformation is common in our world. Sometimes it involves benign self-protection or ego boosting. Other times, humans use deception to gain advantages. Businesses and governments do it every day, by simple shading of the truth, egregious deceit, or something in between.

One thing that rogues know is that deception is more effective when repeated often.

Montreal based consultants The Decision Lab explains:

The illusory truth effect, also known as the illusion of truth, describes how, when we hear the same false information repeated again and again, we often come to believe it is true…

We all like to think of ourselves as being impervious to misinformation, but even the most well-informed individuals are still prone to the illusory truth effect. …the more we are exposed to [false news], the more we start to feel like it’s true—and our pre-existing knowledge can’t prevent this...

With cooperation and assistance from government, BC Hydro relies on the illusory truth effect. The company has a public relations department that regularly paints a picture of a utility struggling to meet growing challenges. Readers will remember press releases each summer and winter that talk about days of unprecedented demand for electricity. Audited sales figures show that demand was the same in 2021 as it was in 2005.

For years, the company accommodated rising domestic loads with modest increases to its asset base. Although the province scooped billions of dollars by removing equity, the utility maintained a fairly steady level of liabilities until 2007. By then, demand growth had flattened but BC Hydro’s capital spending was accelerating.

These obligations are in addition to total liabilities. Most are due for private power purchases.

Between fiscal year 2006 and fiscal year 2021, BC Hydro’s liabilities and contractual commitments increased $57 billion, but the company’s sales to residential, commercial and industrial consumers declined by 2% in 2021 when compared to 2006.

The company employs a large number of people preparing for steady demand growth. That had been a necessity since the company was formed until the mid-2000s. But conditions changed. Conservation minded consumers were implementing more efficient technology and de-industrialization was real. Yet BC Hydro clung to its overly optimistic load forecasts.

While BC Hydro may be ignoring reality, ratepayers and taxpayers cannot ignore the consequences.

Over 28 years, demand increased 22%, but liabilities rose 283% and residential power rates doubled. Trick accounting only works for a while and future consumers will pay much more for electricity unless the province returns billions of dollars taken from the utility as dividends.

It is not difficult to understand why BC Hydro spreads disinformation. Admitting demand growth stalled long ago would have altered the fortunes of many, including executives, professional staff, and the all-important consultants and contractors. The current CEO worked for years advancing Site C, a project that will produce electricity at a cost that is a multiple of alternative sources. He is so deeply invested in the project that admitting it is a giant mistake would require his immediate resignation.

Why government is a party to the utility’s senseless management is less obvious.

When blind eyes are turned toward improper or corrupt acts, one of the justifications used in government offices is that revealing the complete truth would diminish confidence in public administration. The choice is to carry on and hope that few people are aware of facts.

The comments above were stimulated by a twitter exchange between a person who is informed by years working professionally in the energy sector and another person who is either a victim of the illusory truth effect or is someone determined to spread disinformation for personal or business reasons.

Of course Site C won’t make money unless its output is sold at a price 250% of what the gas industry is promised. Wind power is greener and less destructive than hydro power because it doesn’t emit methane, flood Class 1 farmland or disrupt Indigenous communities. As a bonus, wind energy is coming on stream elsewhere within two years and for under four cents a kilowatt-hour. The new Peace River dam will produce electricity at about 15 cents per KWh, as long as a new disaster is not presented on unstable Peace River lands.

Categories: BC Hydro, Site C

15 replies »

    • If BC Hydro had been climate aware for the last 15 years, it wouldn’t be building Site C. The Narwhal published ‘Hydro Reservoirs Produce Way More Emissions Than We Thought: Study‘ in 2016:

      Hydropower is usually touted as clean energy, but a new study has found man-made reservoirs are producing far more greenhouse gases than previously believed, with most of those emissions in the form of methane, a potent climate-warming gas.

      The New York Times reported in 2016 on people complaining about building dams and filling large reservoirs. It is not simply about methane emissions:

      The protests are focused on a mostly overlooked side effect of hydroelectric projects all over Canada: The reservoirs behind the dams tend to develop high levels of methyl mercury, leading to mercury poisoning among people who eat fish or game caught downstream.

      I do not object to preparations for higher uses of electricity. However, capacity additions should be timely and economically efficient. Site C fails on both counts.

      The Peace River dam presents dangers to people living downstream as well as to BC Hydro ratepayers. Installation of grid-scale solar and wind generating facilities can be done within a two year time frame, whereas Site C construction will go on for a decade or more. Those alternatives would cost a small fraction of what electricity from BC Hydro’s new facility will cost, if it ever produces.

      Liked by 2 people

      • BC Hydro assures us that the anticipated demand from electric vehicles is about 1,050 gigawatt hours per year and can be easily accommodated.

        “Can the BC Hydro electrical system handle the increase in demand?
        The increased demand from more EVs is something we’ve been planning for and will be able to supply. We’re predicting there will be around 350,000 EVs on B.C. roads by 2030. This is estimated to add an additional 1,050 gigawatt hours of electricity load per year. The majority of charging takes place overnight, which is when residential power load from things like cooking, heating and lighting is the lowest.
        We have also examined a future scenario with a dozen EV owners on the same street charging all at once. If 12 EVs are plugged into Level 2 chargers, this is simply the equivalent of running a dozen ovens at the same time.”


        A look at BC Hydro’s historical electrical production (page 92 in link below) shows that production varies much more than 1,050 gigawatt hours up or down every year and the additional amount, especially since the bulk of it would be consumed overnight, would hardly leave a mark.

        Click to access financial-economic-review-2021.pdf

        There were, and still are, several alternatives to going all in on Site C that better meet the public interest.


      • I’m surprised Hydro doesn’t encourage people to install solar panels on their houses to contribute to the grid. Of course many are doing that with the incentive of lower electric bills.


        • In fact, BC Hydro acted specifically to discourage user generated solar power contributing to the grid. Like other large utilities, they fear energy democracy. It has the potential to provide “reliable clean electricity, pollution reductions, and climate mitigation.”

          Liked by 1 person

  1. If repetition is the key to making falsehood into fact. Imagine how BC Hydro staffers feel about Site C at this point. And then being invested in the industry they have the inclination to believe as well. From the way the Board of directors deep sixed the conservation potential reviews that showed 5 Site C’s energy at less expense than what they are proposing to finish the damn dam for, you know that we will be having to demand their resignation if not their incarceration.


    • My article about Groupthink could have discussed how this phenomenon applies among the decision makers at BC Hydro. I know for a fact that people at the utility who spoke up against Site C were punished by senior management.

      Quashing dissent pretty much ensures management will make bad choices. Dissent is an essential process in organizations. Dissent is defined as the assertion by a lower power group that a higher power group has come to believe that its partial, bounded views of the world are complete and universal.


  2. As usual you are on target Norm, but too many of the public are captured by the producer spin.

    On a slightly different topic , that of the investment practices of the Canada Pension Investment Board, Parliament is supposed to be accountable to the workers of Canada

    About a year ago a number of us signed a petition, offered by the government, sponsored by Paul Manly and read in Parliament. This petition requested that the Minister of Finance direct the CPP IB to correct a reported total liability of $102 billion, discontinue the investing in “private equity” that bears no resemblance to open market valuations, discontinue investing in fossil fuel projects and hire an international consultant to regularly conduct “value at risk” examinations.

    One year on and no promises by the Fin Min, fund auditors reported that total liabilities increase by 45% to $148 billion, or 7.5 faster than increase in net asset value. Private Equity ” investment increased 32 % . No VAR has been done by an independent consultant.

    After failure to get action from the Min. Fin. I decided to try correcting this wrong and scary development. I sent the Prime Minister a request to intervene.

    Now we come to the interesting part that relates to your post, that of accountability.

    A letter in front of me, from the “Office of the Prime Minister” and signed by M. Bredeson, says the following;
    ” Please be assured that your comments have been carefully reviewed. The issue you raise falls within the purview of Deputy Prime Minster Freeland, to whom I note you have also addressed a letter. While the Prime Minister appreciates being made aware of your concerns ,he will leave your correspondence to be considered by the Minister.”

    Given this history, I find accountability no where to be found so we maybe be getting advance warning of no CPP Plan that about 17 million Canadian workers gave their money to.

    As to BC Hydro , early in this century, I and others described future electricity demand outlooks very much exaggerated , in keeping with stories from Howe Street


    • BC’s public pension funds are also managed with little accountability to beneficiaries, current or future, For many years, executives have rewarded themselves with astounding remuneration increases, but since similar organizations do the same, new pay levels always pass the comparables test.

      It is a lot of work to dive deeply into the activities of pension fund managers. The current list of BCi investments is for March 31, 2021, which is 17 months ago. It is published in a secured pdf format and is a very long list that provides no useful category descriptions. The data cannot be sorted or extracted without resorting to disreputable security breaking tools. The pension fund managers do this to limit accountability.

      It seems that only elders in our society worry about the operation of pension funds. I’m sure Erik that we share the view that enhanced transparency would benefit everyone but the people directly involved in running the organizations.


      • Yes Norm , the report by Nicole Goodkind of CNN Business, indicates many pension plans in the USA are over borrowing tp make new investments and are taking on greater and greater investment risks. Manager pay checks increase with size of the fund.


  3. I guess if this is the case with Site C being an all round big white elephant and financial disaster for ratepayers and environmentally impacting, and possible catastrophic disaster waiting to happen, then that would mean, this current BC Hydro brass and current government leaders are just as corrupt in everyway as the previous BC Liberal government and BC Hydro top brass were. Looks like Hydro and government even goes as far as only caring about their own backsides over the possibility of a disaster that could cost human lives. What would one call those kinds of people then. I know I have harsh words for them and what they are.


  4. 1st quarter out by end of aug 2022?
    Have BChydro make projection claims after 1st getting a deposition.?
    Have BCUC decide future BCHydro, projection claims,again under deposition.?
    Spending 1 billion on Hart dam in Campbell River.Was that really necessary.?SNC?
    1 burrard thermal=1 site c?

    Translink numbers also to justify building?


    • It is a known reality that in open and free market conditions “BUYERS ” take prices higher and “SELLERS” take prices lower. BC Hydro has taken prices higher, not because buyers have been pressing but because they have a monopoly that can be co-opted .
      Because of national circumstances, Japan set out to seduce coal producer countries/regions that had coal resources, like BC, with lucrative long-term purchase contracts . The local greed effect was impressive with governments rushing to improve/build handling facilities such as port improvements , electricity capacity, etc. Once global production transitioned into a surplus to needs/wants the Japanese then required contract alterations to reflect this new reality and of course that produced “STANDED ASSETS” in producer countries.
      This future is the pattern for all small countries with abundant natural resources to plunder and Canada has some.
      To facilitate this happening it is best to divide citizens and one way is to sign on to agreements that transfer away sovereignty, as was done with NERC


  5. Mr. Farrell hits the nail on the head again! His astute knowledge on BC Hydro and power and future costs should be daily reading for our politicians. Sadly when that lot is elected, they drink the magic elixir and all is well, through their rose colored glasses.

    BC is rushing head long into a massive financial disaster and reminds me of a poem quoted by Churchill -“Who is in charge of the clattering train?”

    Who is in charge of the clattering train?
    The axles creak, and the couplings strain.
    Ten minutes behind at the Junction. Yes!
    And we’re twenty now to the bad—no less!
    At every mile we a minute must gain!
    Who is in charge of the clattering train?

    Why, flesh and blood, as a matter of course!
    You may talk of iron, and prate of force;
    But, after all, and do what you can….
    Man is in charge of the thundering train!

    Man, in the shape of a modest chap
    In fustian trousers and greasy cap;
    A trifle stolid, and something gruff,
    Yet, though unpolished, of sturdy stuff….

    Only a Man, but away at his back,
    In a dozen cars, on the steely track,
    A hundred passengers place their trust
    In this fellow of fustian, grease, and dust….

    The hiss of steam-spurts athwart the dark.
    Lull them to confident drowsiness. Hark!
    What is that sound? ‘Tis the stertorous breath
    Of a slumbering man—and it smacks of death!
    Full sixteen hours of continuous toil
    Midst the fume of sulphur, the reek of oil,
    Have told their tale on the man’s tired brain,
    And Death is in charge of the clattering train!

    Those poppy-fingers his head incline
    Lower, lower, in slumber’s trance;
    The shadows fleet, and the gas-gleams dance
    Faster, faster in mazy flight,
    As the engine flashes across the night.
    Mortal muscle and human nerve
    Cheap to purchase, and stout to serve.
    Strained too fiercely will faint and swerve.
    Over-weighted, and underpaid,
    This human tool of exploiting Trade,
    Though tougher than leather, tenser than steel.
    Fails at last, for his senses reel,
    His nerves collapse, and, with sleep-sealed eyes,
    Prone and helpless a log he lies!
    A hundred hearts beat placidly on,
    Unwitting they that their warder’s gone;
    A hundred lips are babbling blithe,
    Some seconds hence they in pain may writhe.
    For the pace is hot, and the points are near,
    And Sleep hath deadened the driver’s ear;
    And signals flash through the night in vain.
    Death is in charge of the clattering train!



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