BC Hydro

Site C: stupidity or corruption?

Premier Gordon Campbell erred in 2007 when he extracted an oft-cancelled project from BC Hydro’s storage vault. Numerous technical advisors had advised against building another dam on unstable Peace River land.

Engineering issues aside, the $6.6 billion plan seemed plausible when Campbell’s government gave final approval in 2010.

BC Hydro sales to residential, commercial and industrial customers had sagged 6% from two years before, but the utility had an almost 50-year record of rising domestic sales. The company mantra declared that demand for electricity would rise 40% every 20 years. BC Hydro continues using that line regardless of reality.

According to its own records, BC Hydro sold the same quantity of electricity to residential and business consumers in fiscal year 2020-21 as it did in 2004-05.

Corporate inertia may seem an innocuous phrase, but it is not. The expression describes a company that is rigid in its thinking and actions and not open to changing conditions. Without taxpayer support, enterprises of that sort soon disappear.

Appointed CEO in May 2010, David Cobb might have amended the faulty mindset in BC Hydro’s leadership. But instead of a corporate modernizer, politicians wanted a flunky pushing flawed Liberal policies.

Cobb’s view of government energy policy was revealed by a leaked internal conference call. Hydro’s soon to be ex-CEO talked about government forcing the utility to sign long-term contracts for money losing private power:

If it doesn’t change, it would be hundreds of millions of dollars per year that we would be spending of our ratepayers’ money with no value in return. The way the self-sufficiency policy is defined now…would require us to buy far more long-term power than we need… Government has to make a change.

David Cobb knew that zero-growth in domestic demand, soft export markets, and rising inflow of private power would cripple BC Hydro financially. The result would be escalating rates in a province that should have the lowest electricity prices in North America. The severity of the private power disaster was apparent, but people receiving payments were rubbing hands and writing cheques to the BC Liberals.

So the utility boss with a lengthy history of managerial success departed. His replacement was beancounter Charles Reid who showed his Liberal loyalty by making this outrageous statement to BC Business:

We’re predicting a 50 per cent growth in demand over the next 20 years. 

After two years, Reid was replaced by Jessica McDonald whose main qualification seems to have been her experience as a close political colleague of Gordon Campbell.

People with a broad and objective knowledge of energy knew the electricity market had changed. Liberals appointees on Hydro’s Board of Directors were either unaware or silenced by politics or self-interest. A paper in the International Journal of Project Management may offer a hint of why Site C had an appeal:

Corruption is particularly relevant for large and uncommon projects where the public sector acts as client/owner or even as the main contractor. Megaprojects are “large unique projects” where public actors play a key role and are very likely to be affected by corruption.

Experts in other places knew conditions had changed. In early 2014, American Council for an Energy Efficient Economy issued a White Paper titled Why Is Electricity Use No Longer Growing?

ACEEE noted that although electricity sales had a long record of rising steadily, growth had essentially stopped early in the 21st century. Experts Steven Nadel and Rachel Young concluded that energy efficiency had become an important factor suppressing consumption of electricity.

While the ACEEE analysis was accurate, it was ignored in British Columbia.

Electricity demand is likely to grow as we decarbonize parts of our future world. However, prudent management of the public interest demands new sources of supply be clean, non-destructive and economically efficient.

International agency IRENA published about falling prices for renewable energy in 2017 and predicted the trend would continue, even accelerate. Again, British Columbia officials paid no attention.

The cost of electricity from renewable energy technologies has fallen steadily, and even dramatically, in recent years. This is especially the case since 2000, with the rise of solar and wind power generation as viable commercial options.

In psychiatry, the word “delusion” means a firm belief in what others know to be false. Despite evidence of massive physical and financial risks, Liberals decided to green light Site C. Not wanting to be labeled anti-development, and having its own friends to reward, BC NDP chose to carry on.

The project that was to be built on shaky ground was justified by reasoning that was delusional.

The challenge facing future analysts is to determine if the delusion was real or convenient for people who expected to gain. Corruption is the abuse of entrusted power for private gain. It plays a part in British Columbia’s energy management.

Categories: BC Hydro, Site C

7 replies »

  1. BC is extremely corrupt at all levels of government, Civic, Provincial and Federal and we are getting more corrupt by the day.

    As government does not pass laws to help prevent politcal corruption, one can say government supports politcal corruption.


  2. I note that Kevin Falcon and a gaggle of his caucus toured the Site C crime scene the other day. Glowing reports ensued, Shirley Bond chiming in with cheerleading like this:

    “It was a memorable day.  In April of 2010 I remember participating in the announcement of the Site C project.  Today Kevin Falcon and I and a number of our colleagues took a tour of Site C to see the amazing work being done by thousands of workers. From the vision, doing the homework, cabinet approval, announcement and now years of work the project will power the future of our province.”

    Kevin Falcon stood with hard hat and high vis vest to record a video with more gaslighting, shouting above the cacophony of heavy machinery to inform us, “…And I gotta tell you, when we handed this project over to the New Democratic Party in two thousand seventeen even they asserted and confirmed the project was on schedule and on budget. Now, sadly, as a result of a one year delay that they imposed on this project while they decided whether they wanted it to continue, the budget has gone from eight billion to sixteen billion dollars…”

    Now, a tour like this in the dog days of summer doesn’t just happen on the spur of the moment, and the BC Liberals and BC Hydro are clearly trying to get out in front of something. The message seems to be that this project is exactly what the province needs, was planned and perfectly launched and underway under the expert guidance of the BC Liberals, but has since been royally screwed up by actions of the incompetent BCNDP.

    Could more bad project news be on the way soon? Sure looks that way to me.

    Incidentally, Falcon makes it sound like the BC Liberals handed responsibility for the project over, rather than having it taken away from them. And the statement that the one-year delay caused the budget to double is an obvious falsehood. The BCNDP deserves a lot of well deserved criticism on this file. But true to form, the BC Liberals never waste an opportunity to lie, even when the truth will do.

    Liked by 1 person

    • See my comment.

      The Gordon Campbell Liberals sole roll was to divest BC’s extensive publicly owned infrastructure into the hands of their politcal friends at a fire sale cost. Kevin Falcon was the attack dog to keep the media from Campbell.

      Christi Clarke took politcal corruption to a new level, but the NDP, ever so slow to grasp the issue had done nothing to stop it.

      One can honestly say, Horgan, by doing nothing, abetted criminal activity in BC.


  3. Great summation of a fiasco , Norm.
    Everyone knows that when the unit costs of something like electricity rates increase a lot, customers try to find ways of saving. In technical terms the process is called “elasticity of demand” , A term known to BC Hydro because I and others informed them of this dynamic long ago , try like when Norm Olsen was the Pres.

    For purposes of demand exaggeration, BC Hydro and its chosen consultants preferred to boost population growth to double the real number and to think every person in BC would personally consume as much or more electricity as they were at the beginning of this century.

    The logic is overwhelming, except for BC Hydro and our Provincial Governments.


  4. BC government ministries and agencies seem to have been roughly on the same page regarding projected population growth in the province. Their individual plans to deal with that growth appear to have relied on a profile of the average immigrant that is a bit suspect however.

    They must have assumed new arrivals would be in perfect health and unlikely to require a doctor, an ambulance, or hospitalization. They wouldn’t travel via ferry, commute much, or require a driver’s license. Nor would they visit provincial parks. They would have very few school-aged children. They could afford to purchase a home, or pay market rate rent. They would not use the courts. Oh, and they would use about four times the electricity per capita than existing residents.

    Anyone know a recent arrival that matches that profile?

    Liked by 1 person

  5. Apart from carrying the Site C torch for the Christy’s Corrupt BC Liberals, I think Horgan is a really weak leader and a real hypocrite who could have shut down the project, but knew his partys special interests had to be taken care of also. Which is a about the same as the Liberals have. So the dam continued. There are many variations and types of corruption. I feel Horgan and the NDP are more in the line of being ethically and morally corrupt. The BC Liberal leadership was Criminally corrupt for sure, along with most all other variations. But just plain old political corruption and dirty politics pretty well covers it for both sides. And its us who always pays for their misdeeds and wrong doing.


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