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, guaranteed massive private profits and ensured all financial risks stayed with the public. The contracts in British Columbia last as long as sixty years and allow prices that are as much as 5x market value. In addition, the contracts have annual inflation escalators, a privilege allowed no other commercial segment. All taxpayers get is more power to sell at a loss.
John Horgan issued a press release that makes so damn much sense, I’m repeating it almost entirely. British Columbia urgently needs an independent and transparent examination of all private power purchase agreements, including those important portions kept secret…
Considering the near endless ink and airtime dedicated to what Liberals called “Glen Clark’s folly,” people should compare the attention paid to a Campbell/Clark program that may have cost the province 15 or 20 times as much.
The Horgan Government indicated it will conduct a review of private power purchases but lifting contract secrecy is the one thing that could be done immediately. It is inconceivable that IPPs could prove damages from publication of contracts since the business terms are widely known throughout the industry. Secrecy only exists to protect politicians and utility executives from being accountable for massive financial mistakes.
Because many traditional news sources have been sidetracked by political, commercial and personal interests, acquiring accurate information is now more time-consuming. People with other priorities are vulnerable to lies of commission and lies of omission. Postmedia’s obfuscating political reporters are experienced practitioners of new style journalism.
I made reference to BC Legislative Press Gallery members producing commissioned articles. These are public relations pieces intended to serve particular needs of government or entities doing business with government. It is the kind of output that will ultimately be replaced by automated journalism. Mike Smyth’s recent Province column provides an example… Were Smyth not shilling for private producers, he could be a champion of reducing power consumption through increased energy efficiency. However, there are no industry or environmental groups in BC with sufficient funds to push conservation as a serious alternative to generating more power, whether by hydro, wind, solar, tidal, geothermal or any other technology.
Flat demand by BC’s residential and business consumers has not stopped BC Hydro from doling out increasing sums to independent power producers and spending lavishly on new assets. Because of flat sales and excess supply, it appears BC Hydro has had to reduce production from its own power generators.
Readers may tire of reports on BC Hydro but the more I examine this public utility, the more convinced I am that citizens of BC are victims of massive financial deception.
Since 2006, BC Hydro added $20 billion to its assets and paid an additional $12 billion to independent power producers (IPPs). Yet BC Hydro sold less power to BC’s residential and buiness consumers of electricity in fiscal year 2016-2017 than in fiscal year 2005-2006.
By any measure, BC Hydro was a success. So successful that pirates made plans to plunder. BC Hydro was a decades old operation that delivered power to British Columbia’s residential and business consumers at prices that ranked among the lowest anywhere. Additionally, a steady flow of money moved from the utility to public treasuries. Since 1989, the crown corporation contributed about $20 billion in dividends, water rentals and grants in lieu of property taxes. With assistance of 21st century Liberal governments, politically connected corporations began treating BC Hydro as a machine for dispensing cash.
Access to years of BC Hydro’s financial reports provide me with an indisputable record of the utility’s financial destruction. Eleven years ago, one citizen didn’t have detailed evidence but he did have foresight…
When you’re an activist for vested interests, complete and accurate reports are never offered. These might educate low-information voters that have supported BC Liberals for many years.
The utility loses money on every watt of private power it buys and resells. That is the single largest financial difficulty faced by the company. In the future, it is obliged to buy about $60 billion of electricity from IPPs at prices that will increase with inflation. There is no pressing need for most of the IPP production but the obligation for its purchase cripples BC Hydro.
If you are paying attention to the affairs of BC Hydro, you know the utility in in financial trouble. However, it is electricity consumers that are feeling the pain. Unfortunately, with billions of dollars in phony assets to be written off, a growing power supply that outstrips static demand, payments to private power producers at three times market price and an an export market awash in surplus power, the economic agony dealt by BC Hydro will accelerate.
I assume that logic and fact will prevail and Site C, the most expensive public project in BC history, will be cancelled. It is a costly disaster but BC Hydro ratepayers are burdened even more by payments to independent power producers (IPPs). Much of the almost $100 million a month paid to IPPs leaves the province permanently because majority ownership is domiciled elsewhere. Private producers are paid a multiple of the wholesale value of the electricity they deliver.
In the 20 years to 2006, BC Hydro’s charge per kilowatt-hour to residential consumers increased at 1/3 the rate of inflation. However, when Gordon Campbell’s neoliberal friends decided BC’s iconic utility was a ripe target for privatizing public wealth, things changed dramatically. In the 10 years to 2016, BC Hydro’s charge per kilowatt-hour to residential consumers increased at 5x the rate of inflation.
A message to BC Hydro: “Figure out what you are supposed to be doing, then do it. W.A.C. Bennett established this vital crown corporation to provide reliable, affordable power to British Columbians. That’s what it should be doing. Instead, it is forcing citizens to pay much higher prices to provide financial benefits to foreign owned companies and a band of me-first IPP slicksters and a group of political contributors gaining returns on their liberal investments by sitting in the boardroom of BC Hydro.
Despite deep cynicism about journalists backing BC Liberals, I had long held respect for the writing of Vaughn Palmer. My reservoir of appreciation has now run dry. He has been bright, skilled and articulate, usually worth reading throughout 35+ years with the Vancouver Sun. Now, I don’t know. Is he distracted, overburdened, grown careless or captured by his subjects?
Regular readers know that BC has a surplus of electricity, created mainly by BC Hydro’s steadily increasing purchases of private power, even though domestic consumption has been flat since 2005. Export markets are unprofitable and that situation has continued for years. Proof is offered by BC selling Columbia River electricity outside the province for about one-quarter of BC Hydro’s marginal cost of power. If BC Hydro doesn’t need costly Narrows Inlet power, why are 5 projects on 4 creeks proceeding?
Economists write papers on the circular flow of income but they don’t include the flow between politicians, businesses and the public treasury. In BC, it is commonplace. If you are an observer grown cynical – like the writer – you may wonder what secret benefits are to be found in the circular flow of income between Government, the governing party of British Columbia from 2001 to 2017 and the companies they purport to regulate.