How about a bit of totally nonsensical speculation of the order of “Hitler is alive and well living in Argentina”. Something utterly absurd. I bring to this speculation a very unique history – I’m the only person in captivity who’s been fired twice by Jimmy Pattison.
 
I rather like Jimmy – going out for dinner with Mary and him on his yacht, Nova Spirit, tells you a lot about the way Jimmy’s mind works, for the guests are from different genres and, as often as not, don’t speak with one another. It’s clear that Jimmy enjoys watching the way they interrelate or don’t interrelate at all. Certainly a big man in accomplishments, Jimmy carries with him, dare I mention it in this age of politically correctness, the usual symptoms of, shall we say, height challenge, which accounts for his need to be the big guy at all times, even as he is over 80, to succeed.

Stories about employees abound – the late Bill Sleeman, to whom he gave a new Rolls Royce on his retirement. Long term employees like Enzo (sorry, Enzo I’ve forgotten your surname), Bud Eberhart and Maureen Chant, to name a few, feel or felt a great loyalty to Jimmy who, when concentrating on his car company, routinely fired the month’s lowest salesman saying, “I do them no favour keeping them in a job they can’t succeed in” was his theory.
 
You know the saying, “When a husband sends his wife flowers for no reason, there’s a reason.” Enter Dave Cobb, retiring from BC Hydro after 17 months as CEO; I have no trouble understanding why Cobb would leave. You will remember Cobb’s leaked conference call to employees, in which he slammed independent power projects (IPPs); his predecessor Bob Elton evidently bit the dust on the same subject.
 
In assessing this unfolding story we must know that the BC government is bankrupting BC Hydro, and in fact have already done so. As economist Erik Andersen has explained, if  BC Hydro was in the private sector it would be in bankruptcy protection now! The reason they are not is that they can keep raising their rates.
 
From the outset, the government’s IPP policy has been to force Hydro to buy power it doesn’t need thus must either sell it at half to a quarter the price they paid for it or use it instead of their own power at a huge loss.
 
Why would a government do so silly a thing?
 
There are only two reasons: The Campbell/Clark government wants to bankrupt BC Hydro because of The Fraser Institute’s embedded “values” in the right wing unassailable tenet that there should only be private corporations because they are better business people; or, I suppose, they’re dumb as a sack full of hammers and don’t know what the hell they’re doing (I suppose we must admit of the possibility of both being true!).
 
This is the point I take leave of my senses. Jimmy Pattison has bought the services of Dave Cobb, for whom he must be paying a pretty penny – I mean this guy’s in the million a year range. What reason is there for this? (NDP leader Adrian Dix got off a good one saying that perhaps Cobb has found a Premier Clark he can work with!)
 
What if Pattison has an eye on BC Hydro? Yes, that’s what I asked – what if Jimmy Pattison, an acquisitor par excellence, buys out the jewel of the BC Crown!
 
If Jimmy were planning that, he would need someone close to home that knew where the bodies were hidden and Cobb squarely meets that criterion.
 
In the first place, Cobb is the only man in Hydro today who has admitted that these IPPs are going to wipe out Hydro’s assets. Knowing this and being the sort who can see the writing on the wall, saying, “Get the hell out before you’re tossed out”, he decided to do that.
 
Taking over Hydro is not a money-winner – at least not now – and won’t be as long as it has liabilities like $50 billion for money-losing (big time) IPPs. But what if Pattison could buy Hydro’s hardware and longstanding customers only, leaving the IPPs in the lurch with no legal rights against the government (the IPP deals were, after all, made by Hydro), nor the new BC Hydro which has no legal connection to the original one.
 
I’m admittedly groping in the dark here – I’ve never seen these private contracts. But what if the government said, “We’re expropriating your companies. Here’s the deal – take it or leave it, thanks a lot and good-by”?
 
Who better than Dave Cobb to help the lawyers and bankers to sort all this out?
 
Probably simply fantasy, idiotic conjecture. Certainly it’s just guesswork. But there have been worse conjectures…I think!
 
This for the closer – Jimmy Pattison has never winced from taking on an unusual proposition.
 
And what was that about the husband and the flowers?
 
 

This article was originally published in the Alaska Highway News.

Dave Cobb is president and CEO of BC Hydro. In August, he confirmed what Hydro watchers have been saying for some time: that provincial energy policy is forcing Hydro to buy electricity it doesn’t need at prices higher than it needs to pay. Mr. Cobb said that if the government’s policy doesn’t change, BC Hydro would be “spending hundreds of millions of dollars per year of ratepayers’ money with no value in return” and that Hydro would be required “to buy far more long-term power than we need.”

That means that without changes, your BC Hydro bill will be going up – a lot – when it doesn’t need to.

Cobb was talking about restrictions imposed on BC Hydro by the province’s policies, especially electricity self-sufficiency. Legislation passed last year requires that Hydro hold enough electricity by 2016 to meet all BC needs. By 2020 it must hold 3000 gigawatt hours extra. It must be able to do that in the lowest water year on record. That means BC will have surplus electricity in all years except the very worst one, which might occur once every fifty or more years.

The theory, apparently, was that all the surplus power could be sold to the United States and Alberta. But abundant low-cost natural gas has allowed them to develop their own gas-fired generation, so the export market isn’t as large as anticipated and what market there is won’t command the prices that Hydro needs to cover off the cost of what it’s committed to buy.     

Besides having to acquire more electricity than needed, Hydro is also required to buy that electricity from private independent power producers (IPP’s) operating in BC. Hydro could buy it cheaper on the open market both now and in the foreseeable future.  

Purchases are classified as non-firm, meaning electricity that isn’t available all the time such as wind or run-of-river; and firm, meaning electricity that’s always available.  

Bids from IPP’s to supply electricity to BC Hydro recently came in at an average of $100 per megawatt hour for non-firm and $124 for firm.  Recent spot market prices ranged from a low of  $4.34 for non-firm to a high of $52.43 for firm. Firm power with delivery in 2012 was recently listed at $27-35 on the Pacific Northwest wholesale market. The further into the future you go, the less reliable the price predictions. Keeping that in mind, the 2030 price is suggested to be in the range of  $81-85 per megawatt hour. So relying on the best information available, it seems BC Hydro is being forced to pay artificially high prices for electricity.  

Buying high and selling low doesn’t work for long. So who will pick up the shortfall between what Hydro is paying and what it can sell the electricity for?  

Well, that would be you, BC Hydro customers.

That Energy Act requires that the electricity rates be high enough that Hydro can recover the costs of that electricity it is required to buy.  So your rates go up to cover “spending hundreds of millions of dollars per year of ratepayers money for no value…”

Although rate-payers are on the hook for the costs, they have been noticeably absent from creating the policy that’s pushing up Hydro rates. If there’s to be a change in provincial electricity policy, then rate-payers will have to stand up and insist that seeing as they’re footing the bill, they want their interests to be protected.  

Gwen Johansson has served on numerous energy-related endeavours. She co-chaired the Northeast Energy & Mines Advisory Committee; served on  BC Hydro’s Integrated Electricity Planning Committee; is a former BC Hydro Director and a former member of the BC Energy Council. She lives in the Peace Valley near Hudson’s Hope.