Tag Archives: ipp

Hydro Chief’s Leaked Comments Trash IPPs – What Will Clark Do Now?

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I have called it the Campbell/Clark government because that’s what it is. Premier Clark was in on the beginning of most policies including the disastrous energy plan that sees private power companies (IPPs) destroying our rivers to produce power for BC Hydro which it doesn’t need and must take anyway, bringing Hydro to the brink of bankruptcy. (In the private sector BC Hydro would be bankrupt, except as a Crown monopoly it can always pass its grief over to us the ratepayers.)

You could have blown me over with a feather when I read in the Weekend Sun excerpts of an internal conference call in which Dave Cobb, president of Hydro, condemns the government’s IPP policy. A recording of the call – which occurred August 12, on the heels of the recent panel report on the utility’s financial situation – was leaked to the paper. Cobb pulled no punches, detailing his concerns with the government’s exaggerated “self-sufficiency” and “insurance” requirements:

“‘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…I think they’re going to make a major change there, which will
significantly reduce the amount of power we will be buying from
independent power producers and anybody else,’ he said. ‘Government has
to make a change.'”

 
I found myself asking why this headline story, so clear about the IPP financial millstone around Hydro’s neck, was not reported after the panel report and why, last week the once intrepid columnist, Vaughn Palmer, dealt with this panel report, noting Hydro’s financial grief at considerable length without even mentioning IPPs.
 
In the Weekend Sun report, much coverage and a picture of Paul Kariya dealt with the responses of his Clean Energy Association of BC and their appallingly shallow concerns. Whatever these industry apologists may say their concerns are, you can be sure that the interests of British Columbia are not amongst them. The Clean Energy Association is the private industry in drag, and refuses to tell us where they get their funding. NB the name – with the clear influence of George Orwell’s 1984 the association calls itself precisely what it is not.
 
It’s hard to believe that Minister Coleman had any advance warning of this conversation – it was, after all, a leaked conversation and at any rate, deliberately leaking a policy change of this unbelievable proportion is not Coleman’s style.

What’s the government going to do now? It can hardly fire Mr. Cobb and deny the truth of what he said for no one would believe that for a moment. Clearly, Mr. Cobb didn’t make this all up but was concerned that his staff would be caught by surprise and wanted to give them a heads up. If Mr. Coleman doesn’t fire Mr. Cobb, he might just as well have made the statements himself.

That this is the government’s unannounced (yet) policy makes political sense, insofar as one can make sense out of the appalling Campbell/Clark energy policy because the policy will kill them in the next election and they know it. It also explains why (I have this on the best authority) the industry big wigs were lower than a snake’s belly when they got the panel report last week and why it was when I met Mr. Kariya coming out of the CBC last Monday morning, he was so defensive and uneasy.

One thing’s for sure – the cat’s out of the bag, and to mix metaphors, the contents of Pandora’s box can never be put back.

The question for the Premier is obvious and simple: What now, madam?
 
The issue is in the public domain and will be a big time political issue.
 
Here’s where Premier can separate herself from the disgraced Gordon Campbell and put her own brand on her government while stealing a march on the NDP.
 
It will take guts to do what is right and Ms. Clark must bite the bullet and announce the end of IPPs and clearly state that it’s for two reasons: the environment and the Energy Plan itself.

She does this in several ways:

  1. She revives the Ministry of Environment, giving true power back to it – naming someone tougher than Barry Penner, who was indeed the longest serving Environment Minister and, sad to say, the worst. The issuance of permits to desecrate the environment must be returned to the Environment Ministry to be dealt with by a minister who has the courage to care about the environment before considering those who want the permit.
  2. She must announce that henceforth the Precautionary Principle, when dealing with those who need permits to encroach upon the environment, will be paramount. This principle states that if an action or policy has a suspected risk of causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those taking the action. No longer must the onus be on the public or environmental organizations or their spokespeople.
  3. She must squarely face the fact that Hydro is in deep trouble and can only be saved by abandoning private power.

This is hardly the full picture because of the Ministry of Transportation running roughshod with highways over wildlife preserves and agricultural lands, and the proposed pipelines and tanker traffic.

The premier’s eminent grise, Patrick Kinsella, will be appalled but Ms. Clark, who has active political antennae, knows that Families and Children will not be the big election issue but that BC Hydro and the environment will be.

Ms. Clark, in order to extract the government from the devastating policy of Campbell must understand and face the hell, fire, brimstone from her corporate backers and lose election funds if she does what I suggest.

The decision will mark clearly whether the premier is just another pretty face or a leader the people of BC and generations to come will mention her name in gratitude… or if she remains a Campbell clone and one can fairly call her administration the CampbellClark government.

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BC Libs, IPPs Can’t Distance Themselves from Hydro’s Woes

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The response of the private power industry (IPPs) to the recently released study on BC Hydro is goofy even against other barmy statements they make.
 
The defence against the charge that their power costs many times what BC Hydro can make it for themselves is that BC Hydro has paid for its facilities long ago so doesn’t have any capital costs whereas IPPs must build new plants.
 
Of course that’s true – AND THAT’S THE WHOLE POINT!!!
 
Why should BC Hydro (that’s us folks) pay huge rates to cover the construction of private dams when they can get the power from their own system at a fraction of the cost? To pay a triple, quadruple bonus to IPPs so they can build power plants that ruin our rivers and supply us with hugely dear power is plain and simply nuts – yet that’s what the Campbell/Clark Government has been doing for 10 years!
 
Repeat after me – Vaughn Palmer and Mike Smyth too please: “We have never needed IPPS, don’t need them now and won’t need them in the foreseeable future.”
 
Independent experts make it clear that with reasonable conservation, upgrade of current facilities, new generators on flood control dams and taking the Columbia River Treaty power back that we currently sell, puts us in a position that no new power will be needed for decades.
 
My Liberal colleague on our Monday morning Political Panel said today, obviously thinking this was in the government’s favour, that the Committee Report is a window into BC Hydro’s inner workings.
 
I replied and say again, “Yes that’s absolutely right and when the experts look into that window they see a screwed up mess of massive proportions all of which happened during the last 11 years the Campbell/ Clark government has been running the show!”
 
There is no escaping this charge because BC Hydro has its policy directed by the government of the day and always has. The orders to bugger up our rivers and streams by IPPs came directly from the Campbell/Clark government. The government has persisted in this policy even though they have been fully informed throughout.
 
This report also, without saying so, is a condemnation of the media which knew all the facts leading up to the report’s criticism of IPPs, but stayed silent. This is disgraceful and there’s no excuse for their silent support for the Campbell/Clark encouragement of IPPs. If Vaughn Palmer had dealt with this issue the way he dealt with the “fast ferries” issue under the NDP, I have no doubt that the outcry from the public would have been such that the government would have been forced to cancel this outrageous policy.
 
As with fish farms, and will be with pipelines and tankers, it’s all there for everyone to see – BC Hydro has been brought to where, if it was in the private sector, it would be in bankruptcy protection.
 
Premier Clark would like to distance herself from the past and considering her role in government and her silence when in radio, one can understand why.
 
She could make a big step towards her goal by ending BC Hydro’s commitment to private power immediately.
 
If Ms. Clark refuses to change, she will deserve to have her name linked with that of Gordon Campbell because her government will continue to be joined at the hip to the 10+ years the Liberals have been destroying BC Hydro and the environment.
 
My Liberal colleague on the CBC is right – the report is indeed a window into BC Hydro’s government-directed follies which have destroyed our rivers, are bent on destroying many others and committing corporate suicide in the bargain. 
 

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Hydro Report: Death Knell for BC’s Public Power?

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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!

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