Years ago, SFU Professor and private power promoter Mark Jaccard assured us “independent power producers who will lose their shirts — not ours – – if they get it wrong.” In his 2018 retrospective report, government finance expert Ken Davidson concluded that somebody got it wrong but definitely not the independent power producers.
Excepting BC Green Party leader Andrew Weaver, politicians on both sides of BC’s Legislature are reluctant to discuss natural gas policies. This week, the BC NDP raised gas subsidies. That’s unfortunate because climate change is a critical threat to the world we live in and fossil fuels are a prime cause.
Throughout that time, I couldn’t understand why the obvious insanity of costly private power programs didn’t raise the ire of many citizens. For that, I lay a large part of the blame on radio and Press Gallery pundits. Some had personal interests affecting their points of view and some believed that health of the business coalition party ranked above the public interest.
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.
BC Hydro sold less electricity to this province’s residential, commercial and industrial customers in 2018 than in 2005. The total of 50,472 gigawatt hours in 2018 was also a decline from 2017. Despite buying less in 2018 than in 2005, consumers paid BC Hydro 85% more, an extra $2.2 billion.
After the Ken Davidson report to government about BC Hydro’s purchases of private power, David Beers’ wrote, “Somewhere up there Rafe Mair is smacking clouds together to make them thunder: “I told you so!”
In real terms, the BC government’s natural resource revenues in 2018 were 37% of the level in 2001, despite material increases in output.
In the current year, BC Hydro expects to export electricity for a price of C$26.50 per megawatt hour. Compare that to the C$91.40/MWh paid independent power producers in the fiscal year ended March, 2018, an amount 28% higher than five years before. Bank of Canada puts inflation at 7% and the average market price barely changed between FY 2013 and FY 2018.
The analysis by Richard McCandless would be headline material if corporate media were paying attention to the public interest. Burdens imposed on ratepayers measure in the billions and traditional journalists — including the ones who reported for years on far smaller sums lost to fast ferries — report almost no part of the news.
BC Hydro and the energy ministry employ many people paid salaries of hundreds of thousands of dollars each year. But, these people don’t work to save ratepayers’ money but to convince customers that the 80% rate increase between 2007 and and 2018 was appropriate and the huge increases still to come are necessary. We’re paying one load of operatives to remove money from our pockets and another load to convince us that all is well and we as the victims should be happy. Monday, I watched a CTV news report that featured a citizen complaining about 25¢ being added to his monthly electricity bill for the Customer Crisis Fund. The consumer would really be angry if he stopped to think about the real losses he and others suffer through malfeasance and mismanagement.
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…