Tag Archives: ipp

Dr. Marvin Shaffer on BC Govt’s Energy “Self-Sufficiency” Myth

Share

Read this op-ed on Rabble.ca by one of BC’s leading independent energy experts, SFU economist Dr. Marvin Shaffer, refuting the BC Liberals’ wrong-headed “self-sufficiency” policy – which has driven the purchase of billions of dollars in private power contracts.

“The government’s self-sufficiency policy requires BC Hydro to guard
against the risk of drought by entering into long-term firm power
purchase contracts with British Columbia IPPs — power that in many
years it will not need and be forced to sell at a loss. It precludes BC
Hydro from even considering more cost-effective and in many ways less
environmentally damaging options — in particular relying on the spot
market for electricity in those years that its own hydro production is
limited by drought.” (Sept. 9, 2011)

http://rabble.ca/blogs/bloggers/mgregus/2011/09/self-sufficiency-energy-policy-so-where-science

Share

Gwen Barlee Guest Column in Province: End Failed BC Private Energy Plan

Share

Read this recent guest column in the Province by the Wilderness Committee’s Gwen Barlee on why the Clark Government should cancel its failed private power program.

“It is possible we have turned a corner. The B.C. government’s panel
recommendation to redefine “selfsufficiency” is a step in the right
direction. But much more needs to be done if Victoria is serious about
protecting our wallets and rivers from private-power developments. The
provincial government needs to implement an immediate ban on
run-of-river projects. At the moment there are scores of unneeded
projects that have contracts with B.C. Hydro but have yet to be built
that would cost untold billions of dollars. These projects need to be
stopped. Existing power contracts also need to be opened up and examined
to see if they are in the public good. The Clean Energy Act, which
hobbles B.C. Hydro, must be revisited.” (Sept 9, 2011)

Share
One of two proposed loacations for Site C Dam (Damien Gillis photo)

Site C Dam: A Bad Deal for British Columbians

Share

EDITOR’S NOTE: This letter was originally published in the Prince George Citizen, in response to a previous article on Site C Dam.

I live in the Peace Valley, upstream of the proposed Site C dam.  That has led to a lifetime interest in electricity policy.  I read with interest the recent article entitled, “Site C update: more power, more cost.” (July 27) which states, “BC ratepayers will be forking over the estimated $7.9 billion to build the Site C hydro-electric dam on the Peace River…”

Hydro customers do guarantee the corporation’s debt although very few of us give that much thought.  There’s been no need so long as the debt remained stable, was prudently managed, and publicly available.  But things have changed.  After many years of remaining stable, the debt load in the past three years has steadily climbed and those figures do not include the longterm contractual obligations for supply from BC independent power producers, which the province requires Hydro to use.  The public is refused access to those contracts.  How willing should ratepayers be to guarantee an additional $7.9 billion without having the right to scrutinize what they are already on the hook for?

The article says we need Site C because provincial demand is expected to rise 40% in 20 years.  In the past, Hydro ratepayers could – and did – use BC Utilities Commission (BCUC) hearings to hold Hydro and its government handlers to account for their claims.  But last year, the Energy Act removed Site C and ten other projects from BCUC oversight.  Now ratepayers are told they’ll pay the costs but are denied a forum to check the need for and suitability of those costs.

Last year’s Energy Act requires BC to be ‘self-sufficient’ in electricity.  All generation must occur within the province.  Hydro must be able to meet the province’s future need under “the most adverse sequence of stream flows within historical record.”  So self-sufficiency is to protect our electricity supply in times of drought.  Why, then, would we build another dam and reservoir that would be subject to the same drought we’re trying to protect ourselves from?  Surely it would make more sense to diversify our source of supply so that when droughts do occur, we have other sources (natural gas, geothermal, wind, solar) available.   

According to the article, Site C is “extremely cost-effective” at $87-95 per megawatt.  The comparable cited is $125/Megawatt for the green energy call – a most expensive source.  I’m told that firm power with delivery in 2012 was recently quoted at $27-35 on the Pacific Northwest wholesale market.  Longterm predictions are chancy but the projected $81-85 for 2030 doesn’t make Site C look shiny either.  It appears that Site C can only be called “extremely cost-effective” if cheaper sources are somehow eliminated.  The self-sufficiency requirement has created artificially expensive electricity in BC.

Ratepayers have every right to call “Foul!” when they are taken for granted in the manner we are seeing.  Every avenue they might use to protect their interests is blocked.  They are expected to swallow the rate increases and guarantee the risk, all while having no control over the policy.  That’s wrong.

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. 


Share

Mike Smyth: Some First Nations Worried Clark Pulling Plug on IPP Deals Without Consultation

Share

Read this Province editorial from Michael Smyth on the growing sense that Premier Christy Clark is about to dump the Campbell private power program.

“B.C’s private-power gold rush was always Gordon Campbell’s baby. But
the new Clark regime seems intent to slam the brakes on private power,
rather than slam consumers with big electricity rate hikes in the run-up
to an election. But now, B.C.’s First Nations are raisng the stakes behind the scenes. I
obtained a letter from the province’s largest aboriginal groups – the
B.C. Assembly of First Nations, the First Nations Summit and the Union
of B.C. Indian Chiefs – pleading with the government to talk to them
before cancelling dozens of projects.”

Share

The Financial Pain Produced by Campbell/Clark’s Energy Policies

Share

The Government of British Columbia, has for the past 8 years, directed BC Hydro to increase provincial power generation (contracting with IPPs) and transmission capacity to serve a yet-to-materialize provincial demand. The official forecast by BC Hydro in 2006 indicated domestic demand would be almost 25% greater in 2010/11 than is actually the case. A resolve to stick with this exaggeration continues to this day despite multi-year evidence of a gross over-supply condition throughout the Pacific Northwest. Because BC Hydro did follow orders, the generation and transmission capacity in BC has been and will continue to have large financial consequences for ratepayers and citizens, the guarantors of the BC Hydro’s debt. 
 
In the Fiscal year 2006 BC Hydro generated and delivered 52,002 GWhrs of electricity which was what its BC customers required. BC Hydro used $9.610 billion of fixed assets (property, plant and equipment) to do this work. It also used over $1 billion more in total liabilities.
 
By Fiscal 2011 the demand for electricity from BC customers had decreased to 50,607 GWhrs.

Next is the worrying part. BC Hydro had by this time increased its investment in fixed assets to $15.211 billion and taken total liabilities to $16.599 billion. In the course of this period BC Hydro managed to invest and borrow 60% more money to get a smaller amount of product output and delivery than in 2006. This change is a breathtaking example of loss of productivity of capital.

Just to reiterate, BC Hydro’s “Fixed Assets”(real) total is now surpassed by “Total Liabilities” by nearly $1.4 billion. This real asset shortfall is covered by fictional assets such as “Goodwill” and the “Regulatory Asset Account” (receivables from ratepayers from pending rate increases).

So how is this reckless use of capital showing up as pain? For a natural monopoly it always is translated into what we all are forced to pay. To ensure independence the data that follows is taken from an annual report prepared by Quebec Hydro carrying the title “Comparison of Electricity Prices in Major North American Cities”. This report covers 22 major cities and is prepared in the 4th quarter annually. The values are as at April 1st in each year and do not include “rate-rider” amounts nor taxes.

For Vancouver:             Residential (1,000 Kwhs)    Small Power (10,000)   Medium (up to 400,000)   Large (above)                                           
(CDA cents per KWhr)

 
2006                                6.41                                      7.02                                 4.92                                   3.53
 
2007                                6.65                                      7.27                                 5.10                                   3.65
 
2008                                6.98                                      7.63                                 5.35                                   3.84
 
2009                                7.13                                      8.02                                 5.62                                   4.03
 
2010                                7.79                                      8.76                                 6.15                                   4.40

The data above shows that over the 5 years rates have risen by between 21% and 24%. According to the latest BC Hydro Annual Report they are seeking rate increases of 9.73% in each of the years 2012, 2013 and 2014. If BCUC and the Government accommodate this request then residential rates in 2014 would be over 10.1 cents or nearly 60% above those in 2006.
 
These rates also show small businesses in BC are penalized just for being small. As to “Large” (industrial) customers, they enjoy rates that are about a third or less what BC Hydro is currently proposing to pay new IPPs and less than half what is estimated for Site C costs of production.

This summary provides evidence that our Government has pursued policies that sabotaged the energy competitiveness we used to enjoy. BC had an energy “edge” that has been and is being lost because of policy mistakes. Command economics, as practiced in BC, will never bring financial and social optimization just because this approach is always designed to serve narrow self-interests ahead of all others.

Share

IPP Champion Tzeporah Berman Returns to Vancouver – Read her Fluff Piece in the Vancouver Observer

Share

Read this fluff piece by chief private power greenwasher Tzeporah Berman in the Vancouver Observer, marking her return to the city after a year in Amsterdam.Of course, no mention is made of the controversy her support for GE and private power projects stirred up within the environmental community before jetting off to Europe.

“For the past year I’ve been dreaming of Vancouver. Specifically I have
been aching for the beaches, wishing I could wake up and see the fresh
snow on the mountains and imagining walking through the endowment lands.
Yesterday as I stood in a friends apartment with a gorgeous view of the
city and the sun setting over the mountains I felt a place in my heart
open up that had been dormant for too long and for a minute I couldn’t
catch my breath. I knew this would happen. I love this place. I have
since I arrived for visit almost twenty years ago and realized that for
the first time since I was a child I felt like I was really home.” (Sept. 4, 2011)

http://www.vancouverobserver.com/5-minutes-with/2011/09/04/tzeporah-berman-coming-home-vancouver#comment-37918

Share

NDP Energy Critic John Horgan on Hydro Report, IPPs

Share

Read this op-ed in the Vancouver Sun by BC NDP Energy Critic John Horgan on IPPs and the recent panel report on BC Hydro.

“The Liberals imposed a policy on BC Hydro that forced the utility to
only buy new electricity supply from private providers here in B.C. This
“independent power” purchase plan costs ratepayers as much as four
times the market rate for electricity and will see at least $45 billion
in unfunded liabilities over the next 30 years. They also introduced
unnecessary requirements to be electricity self-sufficient, boosting the
need for such purchases. With the damage done, BC Hydro was forced to
request rate hikes of more than 50 per cent over five years. The
Liberals called for a review of BC Hydro, prepared by a panel of deputy
ministers and released earlier this month.” (Aug, 24, 2011)

Share

Cobb Fallout: Coleman, Clark Say No New IPPs but Refuse to Kill Policy

Share

The admission by Dave Cobb, President of BC Hydro, that Hydro is spending 100s of millions for energy they don’t need came as a shock, except for Damien Gillis and me and others, notably the Wilderness Committee, who have been saying this for three years without a peep out of the government. It’s too bad that Mr. Cobb didn’t stand up and be counted by way of a press conference – instead his remarks were leaked. It could still cost him his job, although if he were fired, he would get a pretty penny in severance, to be paid by us of course.

The response by Energy Minister Rich Coleman is what I would expect from a member of this appalling government, though I did harbour hope, in vain, that the minister is made of sterner stuff. He simply replied that they had no plans for any more private power at this time, but they’d be sticking with the underlying policies that justified IPPs – criticized by both Cobb and the recent panel report on Hydro.

Coleman knows, or ought to know, that there will be no new private power, period. The political fall-out from Mr. Cobb’s statement has been enormous but if Bute Inlet, Glacier-Howser or other projects are approved, this government will never be allowed to get away with it. Without any doubt, such a happening would be ugly.

Let’s not overlook another problem: the environment. This is what got many of us involved in the first place. The environmental consequences of these plants is enormous and that alone would have kept any government of decent, caring people away from private power in the first place.

The issue of private power being both wrong economically and environmentally was raised by Dr. John Calvert in Liquid Gold, a book that every one should read. When Damien, Tom Rankin, I and others started raising the economic argument, it was greeted by silence, making me think of the famous Sherlock Holmes story about the dog that didn’t bark. Roughly, in the solving of the case, Holmes said that he solved it because of the dog. When it was pointed out to him that the dog hadn’t barked Holmes said, “Precisely.” We were, up until last week, faced by public dogs that wouldn’t bark, which confirmed we were right.
 
It wasn’t easy dealing with this matter, for the government insisted on the negotiations and the contracts remaining secret. Reflect on that for a moment – Billions of dollars of taxpayer’s money, given away in secret deals!

We had to fly blind with no help whatever from the mainstream media. Dr. Calvert’s book was published 4 years ago and the media remained silent. Op-ed pieces by industry and apologists for it were as regular as ones supporting fish farms but nary a discouraging word. The “hardnosed” columnists, Vaughn Palmer and Mike Smyth said nothing. Indeed the Province, the day after the Sun finally printed the statement of Mr. Cobb – and blockbuster story it was – was silent on the subject. Frankly, it’s been lonely as hell.
 
Now comes the issue of what next?
 
I can only tell you what an honest government would do. The minister would state that the policy had turned out to be too pricey for the shareholders (us) and it was hereby abandoned and would not be revived, Finis.
 
But this is not an honest government. It has been a corrupt gang from the start and Christy Clark was part of it, an integral part, as deputy premier. During her time in radio, she raised not a whisper about the Energy Plan – indeed she abstained from any criticism of the government. The hallmark of this bunch is one falsehood after another. They make the last NDP government look like paragons of virtue with brilliant economic policies.

When, in 2001, then attorney-general Geoff Plant introduced the legislation for fixed election dates in the legislature, he called it “an important tool for moving some of the power out of the premier’s office and restoring public trust in the political system.”

“When people are suspicious of the timing of an election, they become suspicious of the work their politicians do,” he said.

Deputy Premier Clark vociferously supported the move then, but somehow 10 years later – when a premier wants to exercise that very power we all assumed had been taken away – she recants. This is quite in tune with the insincerity and dishonesty of this government.

The revelation by Mr. Cobb could not come at a worse time. Premier Clark had hoped that the blue ribbon committee set up by Rich Coleman would fuzzy over the scandalous issue of costly and useless private power but, try as they might to be nice to the government, they disappointed the premier, who thought she could run an election with BC Hydro an issue for environmental kooks only.

It fortifies an old and cynical rule that governments should never appoint commissions unless they know what their answer will be or don’t care. Ms. Clark cares about this answer, that’s for sure!

Whether there’s an election in the fall or on its proper day in 2013, Premier Clark will have to tell us why she supports a policy which gives private power a monopoly to create new power which BC Hydro doesn’t need but is compelled to buy at a huge loss – while the IPPs ravish the environment.

I sense that no matter when she calls an election, Premier Clark will learn that being a photo-op is not enough.

Share

Hydro CEO Cobb Predicts End to Govt’s “Self-Sufficiency” Policy

Share

Read this blockbuster story from the Vancouver Sun revealing an internal conference call on August 12 in which Hydro CEO Dave Cobb criticizes the government’s IPP policy and predicts an end to its artificial “self-sufficiency” and “insurance” requirements that have helped justify the program.

“If it doesn’t change, it would be hundreds of millions of dollars per
year that we would be spending of our ratepayers’ money with no value in
return,” said Cobb. “The way the self-sufficiency policy is defined now
… would require us to buy far more long-term power than we need.” (Aug 20, 2011)

http://www.vancouversun.com/news/Hydro+head+predicts+energy+self+sufficiency/5283019/story.html

Share