BC Hydro has been managed to deliver billions of dollars in benefits to independent power producers. Had IPPs been left to sell their product to the same free market that BC Hydro trades into, they would have gained 4.9 billion fewer revenue dollars since 2003.
In the last five years, the delivery of cash to IPPs totaled $4.6 billion. If the established trend continues, the amount will be $8.3 billion in the next five years. Amounts flowing to IPPs and the necessary write-off of more than $6 billion in deferred costs means in the next five years, consumers will pay rates 60% higher than they’ve paid in the last five years. In addition, more than $10 billion dollars is committed to Site C and BC Hydro has been spending over $2 billion a year on capital expenditures. Without profitable new markets – none are anticipated – the 60% price rise for electricity could be 100% in the foreseeable future.
I’ve been reviewing more than 20 years of BC Hydro records and they show gradual growth in electrical demand until 2005. Subsequently, there has been no demand growth; in 2015, domestic power sales were lower than ten years before. What did grow were Hydro’s purchases of electricity from independent power producers. In calendar year 2006, 5,636 GWh supplied by IPPs cost $368 million (6.5¢/KWh); in 2015, 14,418 GWh cost Hydro $1,217 million (8.4¢/KWh).
A 155% increase in the volume of IPP purchases is alarming by itself given the lack of need for it but the average unit price has been rising steadily. In the 4th quarter of 2015, IPP unit prices were 9.2% higher than the preceding quarter. To accommodate power coming into the system, BC Hydro had to choose between shutting down their own capacity or dumping power in markets outside BC at well below cost…
Through idiocy or corruption, the public utility has been forced to buy electricity it did not and does not need, some of it at prices five times market.,,
An item first published in August 2011, repeated because it demonstrates that small hydro power projects are not benign. A regular reader informs me (and people in the msm) about issues surrounding […]
This item, contributed by a reader, comments upon BC Hydro now offering a ten to fifteen billion dollar commitment to private power producers. This continues Gordon Campbell’s aim of twenty years ago: PRIVATIZATION BY STEALTH.
Star columnist Armine Yalnizyan wrote about the tapeworm economy that emerges when governments finance private corporations to deliver services to the public. She says it “like introducing a parasite that slowly robs the body of nutrients and destroys its organs.”
Repeated here is something I wrote about BC Hydro in early 2017 for The Common Sense Canadian, an online journal covering Canada’s economy and environment. The site was co-founded by Damien Gillis and the late Rafe Mair and ran for a decade. It remains a worthwhile archive of several thousand stories. A few statements are revised to reflect current information.
BC Hydro has often said that demand for electricity in this region is growing at a rate of 40 percent in 20 years. The company claims population increases result in greater consumption of electricity and vested interests tell us the utility must commit to major spending to serve the province. Self-serving messages are not meant to inform citizens of British Columbia. The intended purpose is to misinform. The strategy works. BC Hydro has been spending tens of billions of dollars because people pay little attention to underlying facts.
BC Hydro’s own numbers provide evidence that increased demand by domestic consumers over 20 years was less than one-third of that predicted and was double covered by the utility’s purchases from private power producers. But those facts did not stop the empire-builders from expanding their empire.
Today, charts about BC Hydro showing information that ought to alarm citizens of British Columbia. It will not of course, because corporate media does not bother to report meaningful data about the province’s largest crown corporation. Despite their continuous claims that demand was growing by 40 percent over 20 years, the company’s own sales records show that demand was slowly growing until 2005 and since then has been stable. But that fact did not prevent the utility from amping up their spending machine…
BC Hydro recently released its first quarter results for the fiscal year ending March 2024. The report covered three months in 2023: April, May and June. It is worth looking at the changes at British Columbia’s public utility since June 2007.
When BC Hydro said that growing demand required asset additions worth billions of dollars and contractual commitments of $50+ billion owed to independent power producers, should we have believed what they said? The record clearly states the answer was NO.
BC’s government seems determined to continue the present model for private power in the intended 2024 call for additional electricity. The difference in 2024 will be that large contracts for wind power will be issued. Government knows that citizens would not, and should not, tolerate privatization of the public utility. The arrangements with Independent Power Producers, which are largely owned outside of British Columbia, amount to privatization by stealth.
Substance use disorder (SUD) affects human’ brains and behaviors, leading to uncontrolled use of substances. Symptoms can be moderate to severe. For individuals, this might involve drugs or alcohol. For industrialized societies, it certainly involves fossil fuels.
BC Hydro is preparing a call for power and expects to award new contracts to independent power producers in 2025. The 500 MW Revelstoke 6 is deferred again, even though it could produce electricity for about $1.2 million per MW of capacity, which would be less than one-tenth the cost per megawatt of Site C capacity. While BC Hydro has been buying private power, it has been exporting public power at market rates. If we value private power purchases at the same value the utility has realized from trade sales, the losses form 2010 to 2022 amount to $6.4 billion ($7.5 billion in 2022 dollars).
A Bloomberg headline too consequential to ignore: European Power Prices Plunge Below Zero as Solar Output Booms. Had British Columbia committed to wind and solar power eight years ago, it could be experiencing the same low cost energy. . .
Gaining billions of dollars, with a promise of $50 billion more, by selling an unneeded product to a single customer for a multiple of market value ought to earn IPPs a featured place in the Canadian Business Hall of Fame.
BC’s Auditor General says the 2022 surplus would be $6.5 billion higher if government followed Canadian Public Sector Accounting Standards. The surplus would have been $8 billion had government also eliminated fossil fuel subsidies.
Because corrupt practices of the past are not easily resolved in court, it may be too late to save the billions of dollars that will flow to private power producers. But it is not too late for voters to punish political figures who originated or tolerated this grand scheme. They sit on both sides of the BC Legislature.
in-sights.ca 
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