This will be a short blog because the point is simple… and devastating.
Mark down August 12, 2011 as the day BC Hydro all but concluded its suicide mission, with the Campbell/Clark government and the Review Panel playing the role of Dr. Jack Kervorkian.
When you sort through the announcement by Rich Coleman and the verbose report itself, you learn that BC Hydro will cut its future costs by 50%, which in practical terms means this: Hydro will be unable to upgrade its facilities and build generators on flood control dams which means they will buy more and more power from more and more private power producers – which is surplus to their needs – buggering up more and more rivers and streams, thus fulfilling the Campbell/Clark government’s ambition to privatize power in BC.
BC Hydro, in taking all this unneeded power from Independent Power Producers (IPPs), must either export it or use it instead of its own vastly cheaper power. This means that BC Hydro will use power at at least double what it can make it for or export it at half to a quarter what they were forced to pay for it. Last year Hydro wasted $600 million buying IPP power it didn’t need – that money was our money, folks.
This comment on the report by former BC Hydro board chair and SFU political scientist Marjorie Griffin-Cohen. She said that the review – which also called for the utility to cut its proposed 50% rate hikes by half – distracts from the utility’s real problem: that the real burden of cost is the government’s policy on private power. “Basically, what they have required to happen in BC is for new power generation to be in the private sector, BC Hydro to buy that and their hope was that this could spur exports of electricity to the United States,” she said.
“It was a very serious miscalculation of what was going on. So what we have now is a lot of private power that is extremely costly.”
Griffin-Cohen said private power projects produce 16 per cent of domestic power, but account for 49 per cent of energy costs. (emphasis added)
The much esteemed SFU professor and energy economist Marvin Shaffer had this to say:
“The real story in the review panel report, although gingerly and cautiously stated, is that it is government itself which bears major responsibility for driving up BC Hydro costs and rates. It was the government that directed BC Hydro to acquire all new sources of energy from Independent Power Producers (IPPs) except in the refurbishment of existing projects or developments like Site C on existing BC Hydro-controlled river systems. (emphasis added)
It was the government that legislated self-sufficiency requirements that have forced BC Hydro to buy more power than it needs to ensure reliable supply. It was the government that imposed debt/equity provisions that exaggerate the cost of BC Hydro financed investments. And it was this government that raised water rentals in a way that directly affected BC Hydro and its customers, but that would not impact private power producers, including Alcan and Teck.”
Anyone who’s run a household budget knows that leads to the poorhouse and bankruptcy.
What this means is that the Campbell/Clark government, as advised by the right wing Fraser Institute, see their dream come true – the end of public power in our province with the ruination of our rivers in ever increasing numbers.
We at The Common Sense Canadian have been saying this for close to two years and as individuals nearly four. I have faced audiences all around the province and have seen disbelief in the faces of the audience saying to me, “No government would do anything so stupid!” Well they have and are about to make it worse.
BC Hydro is the egg that’s become the omelette. The dice were cast and they turned up snake-eyes. The Campbell/Clark government privatized BC Ferries and BC Rail and now it’s moments away from privatizing power by bankrupting our crown jewel – the much coveted BC Hydro and Power Authority..
The story Damien and I and many others including our adviser, economist Erik Andersen, have been telling since 2008, has been difficult to believe.
Well, folks, BELIEVE IT!!!
Postscript – to Vaughn Palmer and Mike Smyth – repeat after me: “The problem with BC Hydro is the massive sweetheart deals made with private power companies where under Hydro must buy ever increasing amounts of power at a huge loss.” Now, having spat it out, PRINT IT!