Tag Archives: BC Hydro

Vaughn Palmer on BC Liberals’ Hydro Cost Coverup

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Read this editorial from Vaughn Palmer in the Vancouver Sun on the BC Liberals’ move to strip the public energy watchdog, the BCUC, of its oversight of Hydro rates. (May 23, 2012)

VICTORIA – As the B.C. Utilities Commission moved this spring to hold public hearings on the B.C. Liberals’ controversial electricity plans, the government mounted a rearguard action to drag the process back behind closed doors.

The key move came March 13, when BC Hydro, at Liberal urging, applied to the regulatory commission for a negotiated settlement process on its application for electricity rate increases of 17 per cent over three years.

The process is the formal name for what is essentially a backroom deal, brokered by the regulator with Hydro and the industry and consumer groups that make up the bulk of the players at any public hearing.

Had the commission gone along, the public hearings, set for a minimum three weeks starting June 18, would likely have been cancelled. Much to the relief of the Liberals, who — I’m told — lobbied hard to make sure they never happened.

Instead the commission balked. In a written decision issued March 30, it explained why public hearings would be very much in the public interest.

“Decisions made in negotiated settlement processes tend to be in the nature of trade-offs among the parties, each of which has its own particular interest,” wrote commissioner Alison Rhodes on behalf of a three-member regulatory panel. “However, there is no broad representation of the existing ratepayers. Further, there is no representation of potentially affected future ratepayers. The panel considers this a public interest issue and one that is of significant concern.”

She noted how the June hearings would mark the first time in four years that Hydro’s proposed rate increases were subject to public scrutiny in front of the independent regulator.

“The panel is of the opinion that given the seriousness of the issues in the [rate application], four years is too long a time period to go before such issues are canvassed by way of a full, open transparent regulatory process.”

Since the last outing, before the 2009 election, the Liberals have embarked on a massively ambitious energy plan and doubling of the Hydro debt, accompanied by a burgeoning use of deferral accounts to put off to tomorrow billions of dollars in costs that would otherwise have to be paid today — all having an effect on rates.

The deferrals in particular raised alarm bells with Auditor-General John Doyle, who warned about “intergenerational inequity” — costs that are incurred today and left for future ratepayers to pay off.

On which point the regulator agreed. “A key issue in this hearing is that of deferred expenses and the consideration of intergenerational inequity to which these deferrals can give rise,” wrote commissioner Rhodes. “Further, given the current size and projected growth rates of the deferral and regulatory accounts, this is not a routine issue. In the panel’s view, this underlines the need for robust representation for future ratepayers.”

The Liberals have boosted the number of accounts from one when they took office to 27 today. The amounts deferred have grown from the tens of millions of dollars to $2.2 billion currently, headed for $5 billion by later this decade.

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Gordon Campbell receives an award for his

BC Liberals Disguised Oil and Gas Support with Fake Green Label

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In my last piece, “The myth of BC Liberal ‘nuetrality’ on Enbridge”, we established that not only are the BC Liberals far from neutral, but rather have been and continue to be complicit in a complex web of legal, administrative and political strategies designed to forward a multi-billion dollar infrastructure development program to enrich the largest most profitable companies on earth at the expense of our Province’s autonomy, economy and environment.
 
Since revealing some of the details that support these claims, issues have been unfolding rapidly on a number of fronts.
 
The NDP has established a “legal team” to look into some of the issues I specifically raised in the piece. This undertaking should fully explore and divulge the many maneuvers the BC Liberals have undertaken over the span of both Gordon Campbell’s and Christy Clark’s time in office which support the largest, most aggressive oil and gas agenda Canadians have ever experienced. As the issues come to the fore from this process I will continue to explore the history of the BC Liberals’ complicity in the oil and gas agenda.
 
Specifically, BC NDP Leader Adrian Dix singled out one pressing issue – the Equivalency Agreement (EA) I and others have worked to bring attention to. This is an action item. Part of the Liberal ‘missing in action’ strategy, defined by the Official Opposition as Government gone “AWOL”, is to let the EA stand despite recent changes by the Harper government which have fatally jeopardized its legitimacy. In legal terms, if BC continues to accept that they have no role or influence while letting the political and jurisdictional wrangling continue unabated, our ability to shape the future of these developments will be further eroded.
 
While there was significant foreshadowing of the BC Liberal desire to streamline approval processes, it was done under the guise of a clean energy strategy. In the 2010 Speech from the Throne, the BC Liberals included their desire to establish Equivalency Agreements in order to overcome “Byzantine” bureaucratic bungling that thwarted the much lauded Climate Change Strategy. Never mind that longstanding bureaucrats responsible for administering these processes see no need for such changes, as duplication was long ago eliminated and further streamlining is hardly required in functional terms.
 
2010 also saw the implementation of the Clean Energy Act and much to do about the green legacy Campbell was establishing; little known to us then was the fact that the augmented approval processes where going to be applied to infrastructure projects to export Alberta’s Dilbit, hardly clean and far from green. In fact, it appears the BC Liberals used their Climate Change Strategy roll-out to couch the required notice needed for the Equivalency Agreement that is now being applied to the Enbridge Pipeline Project, which may explain why no input from stakeholders ever occurred in the 60 days thereafter – a requirement laid out in the act in order to enable these agreements.
 
At the time, it was difficult to see through the puff and pageantry that surrounded the Climate Change Strategy and Clean Energy developments. There was a great deal of very public support for what amounted to a privatized power agenda for some of the largest companies on earth – and a mere two years later we are seeing the that the Clean, Green Energy strategy has served privatized power well.
 
In the next three months, British Columbians will be forking over 180 million dollars to private power producers, paying between $68-100 per Megawatt hour, meanwhile spot markets are hovering around 8 dollars per MWh. Hence, BC Hydro (read you) will be footing the bill for a mark-up of at least 700%! The Campbell “Green” strategy clearly becomes more about cold hard cash for private energy corporations than anything remotely environmentally related.
 
Meanwhile the environment Minister remains “Mum” on the current Joint Review Panel for the propsed Enbridge Northern Gateway pipelines. This despite having revealed his efforts to grease the skids of the project and the uncovering of his government’s coy ‘duck and cover’ media manipulation with respect to Northern Gateway. As a recent letter writer in the Burnaby Now enunciates, “BC Must Take a Stand Now” – in order to pull out of the EA process which affects four major oil and gas developments. However, he closes the piece saying he does not expect the government to do it.
 
And nor do I, which is why I went to great lengths to point out how the EA was established and how we might simply render it null and void.
 
Need further proof that this government will once again sit on its hands and look the other way while our sovereignty continues to erode? Then simply read this excerpt from the Premier’s response to Robyn Allan, whose open letter called for the revoking of the EA:
 
We appreciate the time that you have taken to share your views and insight with us and have forwarded your correspondence to the Honourable Terry Lake, Minister of Environment, for his review and consideration as well. You can be assured that the specific points you have raised in your letter will be included in related discussions between Minister Lake, members of his senior staff and officials in the Provincial Environmental Assessment Office.
 
A diplomatic PFO if I ever saw one. Ms. Allan had to follow up and re-request an actual response from the parties responsible for signing away our right to properly assess, participate and influence the single most pivotal development agenda in the Province’s history. Here is an excerpt of that re-request:
 
I am following up with you as the reply indicates that you will review and consider the letter and discuss the points with your officials.  However, it does not confirm that you will address my comments in a reply to me.
 
Robyn Allan has an impressive breadth of hands-on experience and professional training which dictates her belief that if we do not move now to revoke the EA we will have lost one of our final opportunities to restore our decision-making capacity. This is of great importance and I look forward to hearing exactly what the newly established legal team Dix has appointed does in order to ensure this opportunity is not missed.
 
Everyday British Columbians can act now and pressure those in political office to move on this and if the BC Liberals do not revoke the agreement we can shine the light on how it was established outside the norm – as I did in my last piece – which may work to render it null and void.

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Rich Coleman and BC Liberals Pull the Plug on Independent Oversight of Hydro Rates

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Read this story from the Globe and Mail on the BC Liberal Government’s decision to strip the BC Utilities Commission – the public’s independent energy watchdog – of its duties to review proposed BC Hydro rate increases. (May 22, 2012)

The B.C. government has cancelled public hearings into BC Hydro’s rates one month before the review was set to begin, instead imposing its preferred fee structure to ensure a near-freeze of rates that would kick in on the eve of next spring’s provincial election.

Energy Minister Rich Coleman said the public review by BC Hydro’s regulator, the B.C. Utilities Commission, is not needed because the government has determined what the rates should be.

“Rather than put the public and ratepayers into another multimillion-dollar process, we felt it was necessary to just give them a special direction now.”

BC Hydro had initially proposed rate increases of almost 30 per cent over three years, prompting a government review of its operations last year. The government concluded that the Crown utility could cut costs and keep the rates down to 17 per cent over three years. BC Hydro then re-submitted its rate application based on those marching orders.

In the meantime, rates continued to rise on an interim basis, climbing by 15 per cent over the past two years. That means next year’s rate increase on April 1 will be only 1.4 per cent, according to Mr. Coleman’s new directive.

“The Premier made a commitment to keep rates down for families,” Mr. Coleman told reporters in a telephone interview on Tuesday. “We found the savings, we cut the costs, we think we should be able to pass that on to the consumer and not have unnecessary rate increases.”

The BCUC review would have given major stakeholders a chance to query the reasons for rate increases, and the impact those increases would have on the Crown’s operations and its debt. The stakeholders include the B.C. Old Age Pensioners’ Organization, the union representing BC Hydro workers, and the Commercial Energy Consumers Association of B.C.

John Horgan, the B.C. NDP energy critic, said cancelling the review allows the government to hide the implications of its years of intervention in BC Hydro operations. “It’s a disguise to thwart a public hearing into the activities of BC Hydro,” he told reporters in Victoria.

“They keep papering things over, avoiding the inevitable discussion about just what it is we are going to do going into the next decade to try to salvage something of BC Hydro after 10 years of disastrous rule by the B.C. Liberals,” Mr. Horgan said. “If Mr. Coleman is so confident in his numbers, let the experts look at them.”

Richard Stout, executive director of the Association of Major Power Customers of B.C., said he is concerned that the government is taking over the role of the independent regulator. “There is a huge loss of transparency. By the time we get to the bottom of some of these costs, it’ll be too late,” he said. “There should be a rate review, not just of industrial rates, but that’s why you have the Utilities Commission, that’s what they are supposed to do.”

Read more: http://www.theglobeandmail.com/news/national/british-columbia/bc-politics/provincial-government-cancels-public-hearings-into-bc-hydro-rates/article2440323/

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NERC, a US-based private entity, has stealthily obtained control of the North American power grid, including provincial electric utilities like BC Hydro

Obscure US Corporation May Be Behind BC Hydro’s Exaggerated Power Demand, Ruinous IPP Contracts

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Why has BC Hydro gone so Big?
 
Over the past few years a number of us have puzzled over this question. The Crown Corporation, in most people’s minds, was given its natural monopoly status in the belief that the Board and Officers will prudently manage Hydro’s assets so as to deliver adequate electricity to British Columbians at the lowest rates possible. For decades this seemed to be what happened, making BC the place in North America with the lowest electricity rates. It was held to be an achievement to celebrate and certainly gave our province an energy edge when it came to attracting new businesses. This is fast becoming no longer the case.
 
Let’s take a look at the record. In 2000 total assets were $11.596 billion; by 2011, assets had ballooned to $19.479 billion. In 2000, total liabilities were $9.320 billion; by 2011 they too had ballooned to $16.599 billion. If one were to add the yet-to-be-collected amounts held in the “Regulatory Assets” accounts (money we owe as ratepayers) that BC‘s Auditor General discovered, BC Hydro would be negative equity, more liabilities than assets.

Had there been a matching increase in demand it would make some sense but in the chart below you can see that has never been so. For several years the unanswered question has been: How could financially literate people steer our crown corporation on such a perilous course? The enormity of this financial fiasco places the prized assets of BC citizens directly in harm’s way with no credible explanation as to why.
 
Through the decades BC Hydro has consistently shown a passion to have more generation and transmission capacity than was ever necessary to fulfill its real purpose of satisfying its BC customers. In support of this assertion please consider the Chart below (credit: Sandra Hoffman, PhD.).
 

 
The forecasts for all businesses are corporate manifestations of a course to be navigated. Forecasts drive investment planning and by extension, borrowing.
 
In his 1999 book, White Gold: Hydroelectric Power in Canada, Karl Froschauer , writing about BC Hydro, stated “By the early 1980s, the ‘unplanned surplus’- the equivalent of the entire capacity of the $2 billion Revelstoke dam (1,843 MW)- became evident, and BC Hydro was called to account for its planning decisions. The statement of Robert Bonner, BC Hydro chairman at the time, was reported as follows: ‘ Hydro was merely responding to what its corporate customers thought they would need. He said those industries could not have forecast plant closings and the general slump in the economy that resulted in a drop in the demand of electricity.’”

It is worth borrowing a military concept at this point. The best commanders are those displaying “situational awareness”. It is part of the art of valuable leadership. Chairman Bonner was simply excusing himself and his management team from their dearth of “situational awareness”. There are numerous indicators to call upon plus more than a hundred years of formal economic literature that would provide “situational awareness” for those wishing to avoid making “stranded investments” – those investment that no longer can produce revenues but still must be paid for.
 
Mr. Froschauer goes on to write that “There is no evidence that these companies were held responsible for not purchasing the electricity for which they had made firm inquiries…Upon revising and reconfirming the inquiries made by potential industrial customers, BC Hydro found that its estimates were now less than half of the original forecast.”
 
BC Hydro forecasts have consistently being far too optimistic because the corporate leadership and Governments have sought to turn electricity into an export product, forgetting along the way to ask the ratepayers in BC if that is a good idea and at what cost. The most recent forecast is no different than what Mr. Froschauer critiqued.

Demand for electricity in BC is from three categories: residential, business and large industrial. According to BC Hydro’s forecasting manager, the first two categories are driven by population and economic forecasts obtained from provincial sources. It is the third category where the trouble arises, much as described above. BC Hydro’s corporate development officer, Warren Bell, is tasked with taking expressions of need from would be new customers. He has demand growth for this group increasing from 15,722 GWhrs in 2010 to 22,271 GWhrs by 2017. In this group would be the Northern Gateway Pipeline, which has yet to clear environmental hurdles and get the support of the Provincial Government. Mr. Bell is tasking the corporation to be ready to provide electricity to what history tells us are the most fickle people BC Hydro could want as customers.
 
So does an unblemished record of demand exaggeration and an explosion in new investing/borrowing bring one closer to understanding why? I doubt it. So what else is there?
 
The answer may be found in another location. Most readers will not have heard or read of a private US corporation, the “North American Electric Reliability Corporation” (NERC). This private enterprise came into existence in 2006 and has the stated intent:
 
a. to promote the reliable planning and operation of the electric bulk power systems of North America;
b. to act as the electric reliability organization for the United States as certified by the Federal Energy Regulatory Commission and for Canada and Mexico as recognized by applicable government and regulatory authorities in such countries, all pursuant to law;
c. to develop, implement, and enforce, consistent with executed agreements with regional entities and approvals by applicable regulatory authorities, standards that provide for reliable planning and operation of the electric bulk power systems of North America; and
d. to conduct such other lawful business and activities, not otherwise inconsistent with specific purposes set forth herein, in which a corporation subject to the New Jersey Nonprofit Corporation Act may engage.
 
Since 2006 our Federal Government has caused the National Energy Board to complete a memorandum of understanding with NERC. In its 2010 Annual Report NERC states that its “standards are mandatory and enforceable in Ontario and New Brunswick as a matter of Provincial law. NERC has an agreement with Manitoba Hydro, making reliability standards mandatory for that entity.” MOUs also existed with Nova Scotia, Quebec, Saskatchewan and Alberta. Learn about the nature of BC Hydro’s obligations to NERC in this report.
 
So what has been taking place is the rearrangement of control of bulk electricity production in North America by a private US entity. NERC has the power to enforce its will on producers and looks to have the legal authority to by-pass local utility commissions. It is this development that might be the key to the understanding of why BC Hydro has indulged in its aggressive contracting with Independent Power Producers in BC when domestic demand increases are non-existant.

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Hydro’s Overflowing Dams, Huge Losses Due to Private Power

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This is neither a complicated nor a long story – but it’s a tragic vindication for a hell of a lot of people who have been telling the story, ignored at best, more often vilified.
 
Look at page 1 of the story in the Vancouver Sun, May 11 under the heading “HYDRO AWASH IN PRIVATE POWER”, where you’ll see that BC Hydro is spilling water over its dams and missing a chance to make a huge profit and is, instead, sustaining a crippling loss all by reason of corrupt bargains it’s been forced to make with private companies.
 
Ask yourself how Hydro could lose money in one of the wettest years in history, when their reservoirs are chock-a-block full?
 
It’s because of the gross negligence of the Campbell/Clark government – supported by the mainstream media (which has refused to do its job and investigate the private power plan – a plan which compels Hydro to buy private power at double+ the market price.)
 
Yes, folks, the chickens I’ve been writing about for years have indeed come home to roost – BC Hydro is buying private power while spilling its own water over the dams. Your power company, instead of using the water in its reservoirs to make power for British Columbians, lets it spill away, unused, while it pours money into grasping private hands at immense profits to them and immense losses to us.
 
Moreover, BC Hydro – such is the surplus of power in the US – could be buying Bonneville Dam power for a song and flipping it into a neat profit.
 
The exposure of the evils of the so-called “run of river” scheme was first published by Dr. John Calvert in his book, Liquid Gold, which exposure has been re-emphasized by too many power experts to mention – though one must point out the work of our resident economist Erik Andersen, who has been putting the price of these corporate rip-offs in language we can all understand.
 
We at the Common Sense Canadian have had super back-up from our contributors. It’s dangerous to list some for fear of offending others but as the official spokesperson for the Common Sense Canadian I must give special thanks to John Calvert, Marvin Rosenau, Larry Dill, Joe Foy, Otto Langer, Rex Weyler and so many others who weren’t afraid to stick their heads above the parapet.
 
Do Damien and I feel vindicated?
 
You’re damned right we do, though it leaves a very bitter taste. For nearly three years we’ve traveled this province from meeting to meeting, trailed by power company stooges putting out the bullshit that we weren’t telling the truth while having no “facts” of their own to put forward. We’ve seen local media reporters have their reports of our meetings spiked by editors told from above to make no mention of our evidence. We’ve searched and waited in vain for just one major media editor to back up the simple truths we were disseminating.
 
The momentary pleasure that comes with vindication is massively overwhelmed when one tots up the damage including the destruction of 75 rivers and streams and the ecologies they sustain, with hundreds more to come; the destruction of salmon runs and resident Rainbows, Cutthroat, Dolly Varden and Bull Trout; clear-cuts for utterly unnecessary roads and transmission lines; the incalculable loss of wildlife; and last but scarcely least, the bankruptcy of BC Hydro (the only reason it isn’t officially bankrupt is that it can always raise money by raising rates and obtaining grants from the government – this means that British Columbia, its citizens and industries are bankrolling slick, greedy corporations as they cheerfully comply with the secret sweetheart deals the Campbell/Clark government has forced BC Hydro to give them. Yes, the profits from these corrupt deals are, for the most part, sailing out of the province directly out of your pockets and mine..
 
British Columbia has the right to have this whole sordid mess investigated – we are also entitled to a media that delves into this grossly negligent government action and lays the facts out before us.
 
I cannot leave without making special mention of Tom Rankin, who spent a fortune in his Save Our Rivers Society bringing the truth to the people. Damien and I are both much in his debt and the Common Sense Canadian was, in large part, inspired by Tom’s sacrifices.
 
There it is, folks, the truth is out and, in all likelihood, they’ll all get away with it.

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BC Hydro Forced to Pay Exhorbitant Prices for IPPs, Passing Over Cheap Power as Reservoirs Overflow

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Read this story from Scott Simpson in the Vancouver Sun, reporting on the glut of cheap hydroelectric power in BC and Washington State due to overflowing reservoirs from a big Spring runoff; despite this, BC Hydro is forced to pay top dollar for private power, unable to avail itself of more affordable alternatives. (May 12, 2012)

After a bumper year for precipitation in the Pacific Northwest, BC Hydro stations around British Columbia are sitting idle while independent power producers run flat out.

There’s so much water available for hydroelectric power that a Washington-Oregon utility, which runs full-time to protect salmon and trout, is paying other utilities to take electricity off its hands.

That means bargain-priced import electricity is available to BC Hydro from the Bonneville Power Authority, but it’s a bittersweet opportunity.

It’s difficult for BC Hydro to tap into the cheap power because of contractual obligations to purchase power from about 75 independent power producers (IPPs). Hydro is forced to buy from IPP operators, including big industrial ones such as Rio Tinto Alcan and Teck Resources, even as its own generation stations wait on standby. For example, at Peace Canyon generating station downstream of W.A.C. Bennett Dam on the Peace River, the primary source of hydroelectricity for all of B.C., the turbines are sitting idle for the first time in a decade.

Prices paid to IPPs vary by season, from an average winter high of $100 to a springtime low of about $60. By contrast, the Bonneville price in recent weeks has averaged less than $20 US.

Overall, according to Hydro’s 2011-12 annual report, IPPs earned $676 million from Hydro in the 12-month period ending March 31 ­— at a price per megawatt of power that was more than twice the cost of imported electricity during the same period of time

The water is pouring in just as warmer spring temperatures push down electricity demand. Data this week from the U.S. Energy Information Agency shows Oregon with 172 per cent of its long-term average precipitation supply, and B.C. with 131 per cent.

Meanwhile, a continuing U.S. economic recession is curtailing industrial power requirements south of the border.

That means there’s no market for B.C. electricity exports to the U.S. Nor do B.C. residents need Hydro to crank up domestic production.

B.C.’s IPP community includes wind, large industrial hydro and gas-fired generation — but most operations are small-scale run of river hydroelectric installations.

The textbook case is the watershed of the Squamish River system.

Hydro is taking a pass on all the water running into its Daisy Lake reservoir near Whistler. Instead of diverting the water from Daisy via pipeline to a BC Hydro generating station on the Squamish, the Crown corporation is allowing the water to flow directly downstream into the Cheakamus River.

Meanwhile, on two other Squamish River tributaries, the Ashlu and the Mamquam, Hydro is paying IPPs to generate power for the British Columbia electricity grid.

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Times-Colonist: Hydro Execs Paid Bonuses for Fake Profits

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Read this story from the Victoria Times-Colonist on more revelations from the BC Auditor General on Hydro’s shady accounting practices – this time involving hundreds of thousands in executive bonuses paid on non-existent profits.

“B.C. Hydro executives have taken home hundreds of thousands of
dollars in bonuses based on profits the province’s auditor general says
didn’t really exist. Senior Hydro officials have their performance bonuses determined in part by the corporation’s ability to turn a profit. But
auditor general John Doyle’s scathing report on the Crown corporation’s
finances, released Friday, showed Hydro actually lost money recently,
and managed to show a profit only by deferring hundreds of millions of
dollars in expenses to the future using debatable accounting methods. Nonetheless, the corporation paid out sizable incentive-plan bonuses to its CEO, vice-presidents and chief financial officer.” (Nov. 1, 2011)

Read article: http://www.timescolonist.com/business/Hydro+paid+bonuses+existent+profit/5635771/story.html

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BC Auditor General John Doyle recently caught Hydro covering up $2.2 Billion in liabilities, with no plan to pay it back except jacking up your power bills

Kicking the Can Down the Road, BC Hydro Style – Billions in Bogus Accounting Revealed

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This month (October 2011) The Auditor General of British Columbia presented his report to Government titled “BC Hydro: The Effects of Rate-Regulated Accounting”. For most folks this is not be a gripping story they will want to master. That of course is exactly what your Government is counting on.
 
To get everyone’s attention here are in his words the financial dimensions of the issue. “As of March 31, 2011, a net total of $2.2 billion in expenses had been deferred and, by government’s own estimate, the balance is predicted to grow to nearly $5 billion by 2017”. Since this is a total of deferred expenses one could add current total liabilities and get per capita liability for everyone in BC in 2017 of $4,600 at a minimum. That is for BC Hydro liabilities alone.
 
The Auditor General’s Report describes what the “Regulatory Asset Account” is about. Theoretically it is about smoothing large incomes and expenses across several years. As used by BC Hydro it has been about exaggerated use of credit to fund questionable expenditures.
 
Perhaps a personal analogy might help. Let’s say that in 2006 your house was assessed at $124,840 and you were carrying a mortgage of $65,420 plus credit card/overdraft debt of $42,350. Your real job produced $27,270 before income tax and HST. Your creditors knew that your dad was a good credit risk and in fact had co-signed your mortgage and credit lines.

Now fast forward to 2011. Your house has an assessed value of $194,790 and you have used your new equity and your dad’s credit standing to re-mortgage to $106,320 plus you now have $59,000 of short term debt. In that 5 years you have managed increase your income from your day job to $34,380. Over the five years you have also managed to run up extra expenses of $22,000 which your dad is on the hook for and you have to tell him the amount will increase for certain by $30,000 more 5 years out. Your creditors are okay with this because you have convinced them that the $22,000 and extra $30,000 of future income will materialize because you own a business that is in fact a monopoly.
 
The above values are taken from BC Hydro’s Annual Reports, only the decimals are moved. The guarantor (AKA dad) in BC Hydro’s case is every citizen of BC.
 
Since 2005 when the “Regulatory Asset Account” was zero, about $4.4 billion of expenses have been designated as accounts receivable from rate payers in BC. As the Auditor General mentioned about $2.2 billion remains today. Brace yourselves for higher rates needed to pay this off and more.
 
Erik Andersen; Economist
 

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BC Auditor General Blows Whistle on Hydro’s $2.2 Billion in Voodoo Accounting

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Read this story from the Vancouver Sun on Auditor General John Doyle’s new report, which slams BC Hydro’s bad accounting practices – which will add enormous upward pressure to Hydro’s already skyrocketing power rates.

“Questionable bookkeeping methods by BC Hydro have put ratepayers on
the hook for $2.2 billion in public debt — with no apparent plan in
place to recover the money, Auditor General John Doyle warned in an
audit report on Wednesday. Doyle said that if BC Hydro
stays with the practice of deferring large debts rather than paying them
back and balancing their books each year, the total debt will swell to
$5 billion by 2017.

At $2.2 billion, BC Hydro would need a
one-year rate increase of 60 per cent to pay off the debt. At $5
billion, the increase would be 150 per cent.” (October 27, 2011)

Read full article: http://www.canada.com/news/Hydro%20bookkeeping%20creates%20billion%20risk%20ratepayers%20auditor%20general%20warns/5619234/story.html?mid=51435

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Dr. Marvin Shaffer in Vancouver Sun: BC Will Lose Millions on LNG

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Read this essential op-ed from SFU’s Marvin Shaffer in the Vancouver Sun, exposing the real cost to British Columbians of a heavily subsidized liquid natural gas boom on BC North Coast.

“A striking feature of the government’s jobs strategy is the number of
very electric-intensive projects it entails. The strategy calls for the
development of new mines and liquefied natural gas (LNG) facilities,
all of which will require very large amounts of electricity.

The
first phase of the proposed LNG plant at Kitimat in itself will
reportedly consume some 1.5 million megawatt hours of electricity per
year, or roughly one-third of the entire output of the proposed Site C
dam project.

Media commentators have questioned whether BC Hydro
will be able to supply these large new requirements for electricity.
Some worry that it will not be able to do so because of the capital
spending and other constraints that were recommended in the government’s
recent review of BC Hydro’s rapidly rising costs and rates.

However,
the real issue here is not whether BC Hydro can supply the electricity
these projects will need. It no doubt could by acquiring or developing
new sources of electricity supply. The issue is whether, or at least
under what circumstances, it should.

One thing is certain. It will
be very bad for BC Hydro and consequently all of its existing customers
if it does supply electricity to the new mines and LNG facilities at
its standard industrial rate. Under that rate, which averages less than
$40 per megawatt hour, the amount BC Hydro would receive would be less
than half the costs it would incur for the new sources of supply it
would have to acquire.” (October 205, 2011)

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