Independent Power Producers (IPP)

BC’s private power origins

An extensive private power industry was created by Premier Gordon Campbell and friends early in the 21st century. A government that had little regard for nature opened vast areas of wilderness for construction of generating facilities.

Selling electricity to American customers had been a lucrative business for BC Hydro. Liberals had no desire to have profits wasted on the people of the BC, so the British Columbia Transmission Corporation (BCTC) was created to separate transmission assets from BC Hydro. BCTC was to provide independent power producers (IPPs) direct access to export markets.

However, high electricity prices in western USA were entirely artificial.

Texas Republican Senator Phil Gramm and wife Wendy, an Enron director, had pushed utility deregulation and collected huge sums from Enron for their efforts. Lack of supervision by regulators opened the doors to market manipulation. Enron quickly took advantage, but fraudulent acts contributed to its eventual bankruptcy.

In the early 2000s, wholesale electricity prices reached outrageous levels in western USA. BC Hydro’s trade sales averaged $27,850 per GWh in fiscal years 1995-1999, but in FY 2001 and FY 2002, the number averaged $207,600 per GWh. In 2003, when U.S. markets normalized, BC Hydro’s trade sales averaged less than $20,300 per GWh. BC Hydro was sued for its part in the price fixing fiasco and settlement cost the province around $800 million.

Exporting at 2¢ or 3¢ per KWh would not be profitable for IPPs, so Campbell and his private power patrons stopped to design a new and more rewarding approach.

The new plan called for BC Hydro to be IPP’s exclusive customer. Secret electricity purchase agreements (EPAs) were concluded where BC Hydro was required to pay from 8¢ to 15¢ per KWh. Some EPAs were take or pay, resulting in payment of millions for power not delivered to the utility.

Profitability was assured for every IPP. The deals had inflation escalators, which have been particularly lucrative in 2022 for facilities that made their capital expenditures many years ago.

Private power deals were extraordinarily bad for citizens of British Columbia. EPA’s have been as long as 60 years. Secure cash flows guaranteed that most initial developers flipped the operations for immediate profits. Some contracts have been flipped repeatedly.

As an example, Renewable Power Corporation (“RPC”) was involved in building Tyson Creek Hydroelectric Project about 40 kms north of Sechelt. In 2015, RPC facilities were acquired by Alberta based BluEarth Renewables, which was backed by an Ontario pension fund. BluEarth was acquired by DIF Capital Partners in 2019. DIF is headquartered in The Netherlands.

Mark Hume wrote about Tyson Creek, using documents uncovered by the late Gwen Barlee. We learned the province was unable or unwilling (probably both) to exercise control of the project. Government had a desire to privatize public dollars and scientists were not allowed to stand in the way.

Instead of circulating within the province, IPP payments are now exported to enrich private foreign investors about whom we know nothing.

Scenarios like this have been repeated often. BC residents are paying billions of dollars to foreign controlled corporations for electricity that is created and consumed in British Columbia.

I wrote about Tyson Creek more than a decade ago. Recent information has emerged that demonstrates subterfuge played a part in early operations of the facility. Stay tuned, it won’t be reported by corporate media.

11 replies »

  1. At about the same time, BCX Hydro was told that there would be only one more dam built by the Crown Corporation and that would be at Site C on the Peace River. That kind of threat/promise in the Liberal Clean Energy Act has driven Hydros planning process ever since. So that now on top of the incredibly expensive IPP deals, we have the even more incredibly expensive construction of an unnecessary dam.


  2. Again, I grow both weary and enraged at the blatant corruption that engulfs this province. Destructive “run of river” projects are built almost on mass and far less obtrusive thermal and solar power generations is almost shown the front door.

    The involvement of the NDP, in particular, is even more venal as it shows that BC is essentially a one party state and change of government only means a change of politcal friends and insiders to divert hard earned tax monies too.


    • Acutally, in BC a change of government does not mean a change of political friends and insiders. The exact same ones seem to live on from government to government no matter the ruling party. Look at all the Christy Clark (and Gordon Campbell) Deputy Ministers and Chairpersons of the Board that remained on staff under Horgan. Prime example, Mihlar. Prime example, Site C contractors. Prime example, IPP’s getting their contracts renewed even though many expire in 2026.

      Good line about BC being a one-party state. Never thought of it that way, but true…..and…..we don’t get to vote for these people that live on to call the shots no matter the government supposedly in charge.


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