BC Hydro’s own statistics prove the utility has no good business reasons to be building Site C. Domestic customers use the same volumes of electricity today as a dozen years ago and rapidly rising prices will ensure further conservation moderates consumer demand. BC Liberals argue the new dam should be built, not because it is needed, but because it is providing jobs. That, of course, fails to account for financial damage to commercial and industrial enterprises hit with rapidly rising electricity rates. The competitive advantage of low cost electricity once enjoyed by BC employers has been squandered.
BC Hydro and their consultants have not moved up the learning curve despite being wrong year after year for more than 12 years and sadly the BCUC has let them ride on this way. The consequence of being deliberately wrong for 12/15 years is the condition we now have. Residential and small business rates up +70% with no increase in demand. We also have new contractual debts of plus $60 billion to IPPs…
Harry Swain, a former federal deputy minister, was Chair of the federal and provincial Site C Joint Review Panel. He has strong views about the project and about financial reports issued by BC Hydro. On June 8, Dr. Swain appeared on CFAX with Pamela McCall (audio is linked below). In most jurisdiction, the allegation of “accounting chicanery” at a multi-billion dollar crown corporation, made by a highly respected professional, would draw attention of corporate media’s political pundits. However, this is British Columbia and BC Liberals and business friends have put great effort into buying media silence.
Citizens should be astonished by Richard McCandless’ statement that BC Hydro’s “net income is almost fully insulated from the vagaries of actual revenue and expenditures.” Indeed, the utility books revenues not received or owing to it and treats incurred expenses as if they are assets.
BC’s Minister of Energy said in mid October that the $7.9 billion budget for Site C had been examined by top international experts and was assuredly “reliable.” Two months later, Premier Clark revealed the dam budget had jumped to $8.5 billion. Days passed and when project approval was announced, the budget had jumped to $8.775 billion. Once again, the British Columbia Liberals demonstrate practiced mendacity. They are consistent though since mega-projects of the past five years typically doubled between first announcement and completion but were invariably pronounced to be on-time and on-budget. The mantra will be used again…
In a 2104 Supreme Court decision, there is a REQUIREMENT that all contracts, to be valid, can only be agreed upon if all parties are acting in Good Faith. Justice Thomas Cromwell wrote “In my view, it is time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just. The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. The second is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations.”
Politically connected individuals took advantage of citizens’ desire for clean, renewable energy and the Liberals wrote contracts with “lucky firms” that bore no relationship to market prices and guaranteed massive private profits and ensured all financial risks were carried by the public. The contracts in British Columbia last as long as sixty years and involve prices that are now as much as 5x market value. In addition, the contracts have annual inflation escalators.
The mismanagement of BC Hydro is a financial scandal unprecedented in BC’s history. Unfortunately, the corporate media refuses to report these facts. Their loyalty is to not to citizens and taxpayers but to the vested interests that have hands firmly in our pockets.
Richard McCandless, a retired high-level civil servant, is not a partisan for any political group but, for some years, he has been lobbying for more effective governance of British Columbia. In one […]
Site C, which was approved without a proper review by the B.C. Utilities Commission, is going to cost $8.8 billion we don’t have to produce electricity we can’t use, to power LNG plants that won’t exist, at a cost too expensive to sell to foreign markets…
On April 8, Vancouver Sun published an opinion piece by BC Hydro Chair Brad Bennett titled B.C. Hydro, vision, planning and fortitude — getting the job done. The Vancouver Sun does not identify Bennett as a partisan campaigner in BC’s current general election. In the article, Bennett applauds Liberal power policies and repeats an outrageous lie that has been part of BC Hydro’s misinformation strategy for more than 12 years.
I have tracked electricity sales for decades and written much about the subject at In-Sights. My charts report BC Hydro’s sales to these customers: Residential Light industrial and commercial Large industrial. Those represent […]
Despite the flat demand for power, BC Hydro is not only buying more private power, its capital spending program is out of control. As a result, despite a reduction in sales to BC customers since 2005, the utility’s assets in 2016 are 256% of the total eleven years ago. With Site C and other major capital projects, we can expect assets to grow by another 15-20 billion dollars in the near future. BC Hydro’s politicized management, under directions from Victoria, are hiding bad news with accounting trickery and, while they’ve increased the average price to residential and business consumers by 74% since 2005, the rates must rise significantly or the province must reverse the flow of cash from the public treasury to the accounts of BC Hydro.
More power supply and less demand should drive down costs. Instead, California’s electricity rates have surged 12% since 2008. BC Hydro average sale price rose 63% in the same period.
Liberals have been rotating a sharp-pointed metal pin with a raised helical thread within BC Hydro and ICBC but they began with BC Rail and BC Ferries. Lately, I’ve written mostly about BC Hydro but […]
Demand for electricity is in decline. Technology has changed. Dams are not benign and other sources of power are less expensive. Meaningful conservation is cheaper still.
A brisk building boom of hydropower mega-dams is underway from China to Brazil. Whether benefits of new dams will outweigh costs remains unresolved despite contentious debates. …We find overwhelming evidence that budgets are systematically biased below actual costs of large hydropower dams — excluding inflation, substantial debt servicing, environmental, and social costs. …The outside view suggests that in most countries large hydropower dams will be too costly in absolute terms and take too long to build to deliver a positive risk-adjusted return
$101 billion in contractual obligations is breathtaking? What is really surprising is that Toronto Globe and Mail’s BC political reporter didn’t notice before February of 2017. On one hand, I applaud Ms. Hunter for daring to mention the subject now. On the other hand, I wonder why she previously avoided this huge issue and did not report it fully in her newspaper?
Dr. Harry Swain explains in detail how BC Hydro can show a profit while losing money. He then describes the “oversight” process involving Site C.
In the real world, if a company grew its assets by $18 billion (138%) but reduced its production by 8%, heads would roll. In Premier Clark’s La La Land, party favours roll instead. Good Liberal CEO Jessica McDonald is secure in her job, at least until until May 9.