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.
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.