Tag Archives: private river power

BC Liberals Put Massive Great Bear Rainforest Private Power Project Back on Table

June 14, 2012Canada, Politics, WATER, Western CanadaBC Hydro, Christy Clark, ipp, Politics, private river power, Water and EnergyDamien Gillis

Amid the flood of bills the BC Liberals recently pushed through the Legislature in the closing days of the spring session was a quiet amendment to the boundaries of the Great Bear Rainforest – labelled Bill 49. The legislation cleared the way for one of the largest proposed private river power projects in Canadian history, on the Klinaklini River.

Bill 49 reversed then-Liberal Environment Minister Barry Penner’s 2010 decision to reject the redrawing of the conservancy boundary. The recent flip-flop is related to a lawsuit launched in 2010 by project proponent Kleana Power Corporation and its partner, the Da’Naxda’xw First Nation – whose village lies 30 km east of Alert Bay – after their project was waylaid. But did the Liberal Government need to go so far as accommodating the project by changing their own law?

The Klinaklini River, which flows west from the Chilcotin plateau into Knight Inlet on the north end of the Sunshine Coast, is the proposed site of a private river power project of unprecedented proportions. With estimates ranging from 550 to 800 Megawatts (MW) of peak energy production, it would see the mighty river diverted for 17 km through a 10 meter wide tunnel and involve a 10 to 30 meter high dam (euphemistically referred to as a “weir” and “head pond” by the project’s proponents). The dam would flood part of the conservancy; transmission lines and other components of the project would also encroach on the protected lands.

Only Alterra Power’s proposed 17-river Bute Inlet project would cumulatively surpass Kleana Power’s $2.5 billion project in scale. The Kilanklini project even approaches the scale of Site C – a conventional dam proposed for the Peace River – with its 1,100 MW capacity.

The Official Opposition came out swinging last week against the Liberals’ “broken promise” to protect the Klinaklini: “Two years ago we were delighted when the environment minister effectively killed this project by refusing to change the conservancy boundaries,” said North Island MLA Claire Trevena. “So it was extremely disappointing to see the new Liberal environment minister reverse that decision.”

As NDP Deputy Environment Critic Michael Sather asserted to Liberal Environment Minister Terry Lake during the mere 30 minutes of debate allotted by the government for Bill 49, the government has clearly gone well beyond Madam Justice Barbara Fisher’s ruling, which stated it was “not appropriate” for the court to force the government to actually change the conservancy boundary:

…the First Nation asked for the 2010 order that Barry Penner made to be quashed. They got that. They asked for the minister to be directed to recommend to cabinet that the boundaries of the conservancy be changed. They did not get that…Yet Bill 49 changes the boundaries of the conservancy, something the court didn’t grant. Why is the government abandoning its previous attempt to protect the Klinaklini River and going beyond what the judge ordered? (emphasis added)

Sather is correct here – and the reason the court did not order this change to the Great Bear Rainforest boundaries is because courts do not have the power to mandate legislation, only to strike down that which is unconstitutional.

The minister defended the government’s decision, saying, “the court ordered that the Minister of Environment has a legal duty to consult with the First Nation, a proponent in this case, about their request for an amendment — and this is the important part — with a view to considering a reasonable accommodation.” But, as Sather noted, while the judge clearly directed the government properly consult and accommodate the First Nation, she did not go as far as to order it to change the law on the plaintiff’s behalf: “It is rare, however, for the court to become involved in directing a particular form of accommodation…I do not consider this an appropriate case to direct the minister to make the recommendation sought.”

The rekindling of the project is sure to be controversial, as it comes at a highly-charged moment for both private power projects and the Great Bear Rainforest, which has become a focal point for citizens, First Nations and environmental groups battling the proposed Enbridge Northern Gateway pipeline.

Private power projects have been the subject of intense criticism of late, both for revelations of widespread fish kills and weak environmental monitoring and enforcement – slammed by BC’s Auditor General – and for the economics of these deals, discredited by independent economists such as Dr. Marven Shaffer and Erik Andersen.

As The Common Sense Canadian has recently reported, BC Hydro’s new Draft Integrated Resources Plan (p.10) states the crown corporation is still intent on purchasing another 2,000 Gigawatt hours (GWhrs) a year of private power, despite losing hundreds of millions of dollars this year on the deals it already has in place. Yet the proposed Kilnaklini project would likely considerably exceed that 2,000 GWhr total.

That means Hydro’s plan would need to be revised upward to accommodate the project and would leave no room to purchase any other private power contracts – such as the even larger Bute Inlet project proposed by Alterra Power (unless it, say, quadrupled its next “Clean Power Call”). The equally controversial Bute project was also put back on the table last week as the proponent announced a deal with the local Sliammon First Nation to build transmission lines through its territory.

Scott Simpson summarized Kleana Power and the Da’Naxda’xw First Nation’s case in May, 2010, a month after Penner rejected the project:

Da’Naxda’xw First Nation and Kleana Power Corporation allege in a writ of summons filed this week in B.C. Supreme Court that the government failed to honor a 2007 commitment to exclude the project area from the bounds of the Upper Klinaklini conservancy, prior to the settling of the conservancy’s boundaries.

When the conservancy was announced in 2008, the project area was included within its boundaries — contrary to the expectations of the Da’Naxda’xw and Kleana.

The project includes a 10-metre-high weir that would cause water to back up about 5.5 kilometres into the conservancy.

Environment Minister Barry Penner has stated in the legislature that the government will not consider moving park and other protected area boundaries to accommodate electricity projects.

The plaintiffs are seeking a court declaration that would overturn the boundaries of the Upper Klinaklini conservancy, and order the B.C. environment minister to recommend to cabinet an amendment to the conservancy boundary in order to exclude the land and stream bed required to sustain the power project.

In the end, while Madam Justice Fisher’s decision, reached in May of last year, concluded that the nation had not been properly consulted, she stopped far short of telling the government to change the boundary.

The judge’s decision included another interesting conclusion.

Noting that one of the First Nation’s councillors, Fred Glendale, is also a director of Kleana Power Corp., the judge stressed that while the First Nation is entitled to be consulted and accommodated on the conservancy, the company is not: “While it may be obvious, it is important to emphasize that the Crown’s constitutional duty to consult is owed only to a First Nation. In this case, Mr. Glendale is both a councillor of the Da’naxda’xw and a director of Kleana. I have considered his evidence with this in mind, as it is not proper for a corporate entity with First Nation directors (or shareholders) to be the recipient of this constitutional duty.”

As an aside, Fred Glendale is the man who showed up to a 2008 townhall meeting in Campbell River on private power projects – hosted by Save Our Rivers Society and featuring Rafe Mair and myself – in an impressive new pearl-white Cadillac Escalade, before taking his seat next to one Dr. Alexandre Eunall. When Dr. Eunall spoke up against our criticism of the private power industry, Save Our Rivers’ founder Tom Rankin correctly identified him and Mr. Glendale as co-directors of Kleana Power. Dr. Eunall instantly clammed up at that point. Rankin also noted that Eunall has been behind a number of other private power deals where individual First Nations leaders have become personal partners in the corporation created to build the project. Another notable instance involved then-Haisla Chief Councillor Steve Wilson, who also turned up in 2008 as a director of two private power deals near his community of Kitaamat Village, unbeknownst to many of his constituents.

The Da’Naxda’xw First Nation fired back at the NDP this week for its criticism of the project. Spokesperson Dallas Smith told the Campbell River Courier-Islander, “If built, the Kleana project would be one of the most sustainable sources of clean energy in North America.”

By contrast, in a media advisory issued on June 7, Deputy Environment Critic Michael Sather had stated, “The environmental devastation from this project is unthinkable. Five species of wild salmon make the Klinaklini their home. This project would affect them, plus red and blue-listed species and a grizzly bear and moose corridor.” Smith countered, “There will be no net negative impact to eulachon, salmon or grizzly bear by the project…In fact, the project has the potential to deliver a net benefit to fish populations,” (emphais added), though he neglected to elaborate on this surprising contention.

According to the Globe an Mail’s Justine Hunter, reporting in 2010, even the Liberal minister acknowledged the project’s likely environmental impacts: “Kleana’s president said the project could be built with a fraction of the ecological footprint of Site C, but Mr. Penner said it threatened protected wetlands, fish-bearing streams, old-growth forest and grizzly-bear habitat.”

Smith also downplayed the size of the project to 550 MW, though its specs have varied wildly over the years and other private power projects in BC have wound up larger than their proposals initially suggest.

The Da’Naxda’xw may hold title to the territory affected by the project, but they and councillor/Kleana Power corporate director Glendale are asking the people of BC to purchase private power which has been roundly criticized as a sham for the public, driving up hydroelectric bills and contributing to the bankrupting of BC’s most prized crown corporation.

We are presently witnessing the travesty of BC Hydro spilling water (read: power) over its public dams while it’s stuck paying many times the market rate for private “run-of-river” power it doesn’t need. Electricity from our neighbours in Washington State is currently virtually free, as they are in the same situation with their dams (as of this publication, the price for firm, on-peak electricity on the local Mid-Columbia spot market is about $12 – whereas we’re paying up to ten times that much for IPP power in BC!) And yet, we can’t take advantage of this opportunity because of this sham private power we’ve been forced to buy.

The most important take-away here is that having title to a territory does not in any way give a First Nation or its partner corporation the right to hose the people of BC.

Moreover, with the recent exposure of serious environmental problems associated with these projects (and bear in mind this evidence has come from much smaller operations than the proposed Kilinaklini behemoth); and considering the passion demonstrated by many British Columbians in recent years for protecting the Great Bear Rainforest from other industrial impacts, this project is sure to provoke considerable outrage.

Finally, the BC Liberal Government can’t honestly contend Madam Justice Fisher forced their hand. She gave them a nudge; they took a giant leap towards making another of their precious private power projects a reality. The court did not mandate this or any other legislation – courts don’t have the power to do so. In our democracy that power is reserved for the legislature/parliament. So the Liberals should not be let off the hook for this decision to kowtow to private power interests. They’re only too eager to ignore aboriginal title and rights when First Nations oppose a favoured industrial project – i.e., Enbridge, Fish Lake – but if a nation supports a private power project, they apparently bend over backwards to accommodate it.

Whatever the case, the project’s revival would seem to be short-lived, as the NDP have made their position clear. If the Liberals and the project’s proponents can’t ram through environmental approval and a multi-billion dollar purchase contract for the power from the project by May 2013, future Premier Adrian Dix may well kill it once and for all.

BC Hydro’s Exploding Debt – Accident or by Design?

June 8, 2012Canada, Economics, Politics, WATER, Western CanadaBC Hydro, Christy Clark, ipp, Politics, private river power, Water and EnergyErik Andersen

Mysterious foreign corporate interests are directing our provincial energy policy, as BC Hydro prepares to buy yet another round of discredited private power contracts.

Recent articles about some of the wrong-headed thinking by our government that has put BC Hydro in financial harm’s way, suggest that it has just been a matter of over-enthusiasm and nothing more sinister. It is almost a description of our government as a victim that needs our sympathy not our ridicule – or worse.

Ask yourselves if it was prudent of BC Hydro to recently borrow and spend $10 billion, presumably increasing its capacity to do business, knowing that the global economy was in disarray?

Prior to 2008 publicly available indicators showed commercial/economic global affairs were in trouble. It is not unreasonable to expect those who we pay very well to know about these developments and rein in their more bullish instincts. This is called looking after the public interest. Out of the many such “situational indicators” we all have access to, take a moment to look at one – the Baltic Dry Cargo Index, the 5 year chart. The index plummeted by 94% between a record high in May 2008 and December 2008, when it hit its lowest point since 1986. This should have sent a powerful warning to the people forecasting our future energy demand.

BC Hydro’s most current forecast shows they expect the domestic need for electricity will become 64,000 GWhrs by 2017. GWhrs are the units of electricity their forecast uses so just think of them as units of useable electricity for discussion purposes. Now, most people I know, acting in a common sense way, would test this outlook against the best possible evidence of real demand available. Since the financial peak of 2008, BC Hydro’s record of sales shows demand collapsing, both in total and on a per capita basis. This reality has yet to be recognized by the “smartest guys in the room”. So for at least three years our Government and BC Hydro have been in denial of reality.

In fact, even as recently as this week, it emerges that BC Hydro is planning to buy even more private power contracts, through a 2,000 GWhr clean power call (see page 9 of Hydro’s 2012 Draft Integrated Resources Plan); at the same time we learn that Alterra Power intends to take another run at its controversial mega-IPP in Bute Inlet, announcing a deal with the Sliammon First Nation to build transmission lines for the project.

So, over the last six to eight years how much new debt has BC Hydro taken on in your name, as a citizen and owner; do you know or care? Besides the formal amount of $8 billion in new total liabilities it has added $2.2 billion of receivables from the ratepayer’s category. BC’s Auditor General reports that it looks like this category is programmed to balloon even more. These obligations do not take into account the present value of the secret IPP contracts that would probably add another $30-40 billion to total liabilities.

In the face of evidence that no new electricity generation is needed in the foreseeable future, BC Hydro is presenting a story where it sees the need for 14,000 new units by 2017, not that far off. In terms of new borrowing and spending what does this mean? If we use the values associated with the Site C project, each new unit of useable electricity comes with a capital requirement of about $2 million. Your government/public corporation is planning to contract for or directly finance new generation that will produce a new liability of about $30 billion by 2017 and double that by the end of the forecast period.

You may ask, where does this insanity stop? What motive could possibly explain this outrageous mismanagement of our public asset?

Perhaps the explanation lies outside of BC. In 2006, a new corporation came into existence in the US, dubbed the “North American Electric Reliability Corporation” (NERC).

This corporation has the legal mandate to impose its will on all North American electricity producers. This will is a legal right to levy fines of consequence on those producers not obeying instructions. This corporation is not beholden to any elected body, nor does it disclose its beneficial owners. Our federal government has accepted this reality by having the National Energy Board sign a memorandum of understanding with NERC, in the fall of 2006. NERC’s most recent annual report affirms it now has “ENFORCEMENT” powers in Ontario and New Brunswick. NERC has been and is active elsewhere in Canada, furthering its restraint of trade objective which certainly does not look as serving the public interest of BC citizens.

The forgoing is not something both the BC Government and BC Hydro would have been ignorant of, which makes knowing of an act of complicity.

Most people have memories of Enron Corporation that are generally uncomplimentary of the folks in charge of it. Some of the more prominent of these people are still around. It might amuse you to read what is essentially the Enron oath of office. It serves to illustrate the difference between the “talk and the walk” for some people.

The following quotation is taken from the 1998 Annual Report by Enron:

Our Values

RESPECT: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness, and arrogance don’t belong here.

INTEGRITY: We work with customers and prospects openly, honestly, and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.

COMMUNICATION: We have an obligation to communicate. Here, we take the time to talk with one another … and to listen. We believe that information is meant to move and that information moves people.

EXCELLENCE: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.

Don’t for a moment think that juvenile insincerity is limited to the US when the smell of big money is in the air. The time has long passed for being apologists for the folks who are determined to help others get control of our best provincial asset and the business monopoly that is attached.

Marvin Shaffer: BC Hydro Problems Stem from Bad Government Policy

June 7, 2012WATERBC Hydro, ipp, private river power, Water and EnergyDamien Gillis

Read this op-ed by SFU’s Dr. Marvin Shaffer in the Vancouver Sun, putting the blame of skyrocketing hydro rates squarely on the shoulders of the BC Liberal Government as opposed to BC Hydro’s management. (June 7, 2012)

Though presented as part of its effort to protect families, the government’s recently imposed cap on BC Hydro rate increases will not help British Columbians – families or other-wise. The cap on rates does nothing to reduce costs. At best it provides a short-term gain, but sooner or later BC Hydro will have to increase rates to match the increase in its costs.

British Columbians will benefit only when BC Hydro is able to plan and operate its system more efficiently. And as much as the government would like to blame the BC Hydro board and management for rising costs and rates, the fact is that the government’s own policies are largely to blame.

In an unprecedented series of directives, the government forced BC Hydro to acquire more power than it needed to ensure reliable supply, or could otherwise justify. It also dictated that all new customers, including large electric-intensive industrial loads, would pay the same standard rate, even though that rate is less than half the cost of the new supply BC Hydro has to acquire to meet the new customers’ requirements.

Through new legislation the government authorized BC Hydro to make major investments in smart meters, new transmission lines and other projects without any independent assessment of their costs and benefits or business plan. That same legislation also directed BC Hydro to develop plans to buy and export private power, and enabled cabinet to force BC Hydro to do so regardless of the costs of the back-up and other services BC Hydro would have to provide and the market risks it would have to assume.

These measures have already had major impact. In its rate application, BC Hydro reported that by 2014 it will be buying over five million megawatt hours of private power as a result of the government’s policy. This is power that BC Hydro does not yet need, would not otherwise have acquired and the BC Utilities Commission would not have approved. The average price BC Hydro will be paying for this power is well over $100 per megawatt hour and its value, based on BC Hydro’s latest forecasts of its market value, will be less than $50 per megawatt hour. The financial loss to BC Hydro will be well over $250 million in that year alone.

The government cannot reverse the costs and losses it has already imposed on BC Hydro. Rate freezes only mask, they do not undo what has been done. What the government can and should do, however, is to change its policies and rescind the legislation and directives that have prevented BC Hydro from planning and operating its sys-tem more efficiently.

Anton ‘the Inkfish’ Clouds Hydro Losses from Bad IPP Deals

May 29, 2012WATERBC Hydro, ipp, private river power, Water and EnergyRafe Mair

Yesterday morning, listening to Suzanne Anton, one of my co-panellists on Rick Cluff’s Early Edition political panel, avoid the issue of BC Hydro rates rising because of the scandalous sums they are forced to pay private power companies – and government avoidance of the BC Utilities Commission (BCUC) – fill the airwaves with hot air and non sequiturs, I called her an inkfish and was asked through emails to say what this meant.

Well, the inkfish is a species of octopus that has an ink sac, which can be used to expel a cloud of dark ink to confuse predators.

I was not, of course, saying that Ms. Anton’s verbal flatulence was literally an emission of dark ink but that the techniques are the same and clouding of the issues the same result.

The issues are not complicated:

The Campbell/Clark government has forced, and continues to force BC Hydro to buy power from Independent Power Producers (IPPS) on a “take or pay” basis, meaning Hydro is spilling its reservoirs over their dams and paying several times the market value to IPPs. Literally, Hydro is spilling your Hydro rates over the dam in order to meet the “sweetheart” deals the Campbell/Clark government has forced them to sign.
This has forced Hydro to incur huge debts that will be paid for by the only way they can be paid – by us as ratepayers or taxpayers, or both.
Some three years ago, the BCUC determined these IPP deals were not in the interests of British Columbians. BCUC was, for its candour, stripped of its power to review BC Hydro rate increases unless directly asked by the government to do so.
Scheduled BCUC hearings into Hydro’s proposed rate increases in consequence of these IPPs have been cancelled by Minister Rich Coleman, thus public scrutiny of this scandal won’t happen.
The Minister and the Cabinet have rejected BC Hydro’s proposed 30% rate increase over 3 years and cut it to 17%. This is a purely political decision which is supposed to make us feel warm and fuzzy about Premier Clark.
The fact is that BC Hydro’s proposed 30% hike would not, by a long shot, cover their escalating IPP-induced deficits. It is also a fact that you and I will cover these deficits either through increased rates or taxes, or both.
BC Hydro has also set up special deferral accounts. As CTV reported, “the amount of debt that BC Hydro has deferred’ into special accounts is expected to more than double to $4.5 billion in the next two years, the province has acknowledged.” Madam Inkfish would have us believe that this amount represents deferred capital expenditures, but this simply is not so and the Auditor-General has stated that this policy must end.

These deferred accounts are, for the most part, taking Hydro’s losses due to the IPP sweetheart deals, making them into a special account which they then say – because ratepayers now owe this money to BC Hydro – is now a Hydro asset! (By all means, read that again!!! Monty Python lives!)

Marjorie Griffin Cohen, a professor of political economy at Simon Fraser University, told CTV News that the BC Government is to blame for rising hydro costs because of a number of political directives it has handed down during the last decade.

Professor Griffin Cohen said, “The government has required BC Hydro to buy very expensive private electricity at a time when it basically doesn’t need it. It has also introduced the smart meter program, which is very expensive.” (Emphasis added)

Here we have it, once the ink has dissipated. Where BC Hydro once put hundreds of millions of dollars into the Provincial Treasury as a dividend for us the citizens, we are now on the hook for a minimum $4.5 Billion over the next two years by the government’s own admission – this increase being largely the Campbell/Clark “sweetheart” deals with corporate pals.

When Premier Clark and Minister Coleman say they are reducing BC Hydro’s proposed rate increase from 30% to 17%, that is a contemptible distortion of the truth. The fact is that BC Hydro’s deficits are our deficits and whether we pay them off by rate increases or tax increases is a purely political calculation. To say they cut Hydro’s demands is an election ploy which, even for this bunch, is remarkable dissembling.

Why is our healthcare, education funding and the like strapped for cash?

Ask Madam Inkfish and her clients that question.

Vaughn Palmer on BC Liberals’ Hydro Cost Coverup

May 28, 2012Canada, Politics, WATER, Western CanadaBC Hydro, Christy Clark, ipp, Politics, private river power, Water and EnergyDamien Gillis

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.

BC Liberals Disguised Oil and Gas Support with Fake Green Label

May 27, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, WATER, Western CanadaBC Hydro, BC Oil Pipelines and Supertankers, Enbridge, ipp, Oil and gas, Politics, private river power, Water and EnergyKevin Logan

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.

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

May 24, 2012WATERBC Hydro, ipp, private river power, Water and EnergyCommon Sense Canadian

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.”

BC Media and Government Don’t Want Accountability on Environment, Public Interest

May 23, 2012Canada, Politics, WATER, Western Canadaipp, Politics, private river power, rafe mair, Water and EnergyRafe Mair

Well, well – if I had false teeth I would have swallowed them on Monday morning when I saw, on the op-ed page of the Vancouver Sun, an article by Gwen Barlee on sustainability. Here was the page dominated by the Fraser Institute’s own – Fazil Milhar – doing something on the environment that wasn’t an industry screed.

Ms. Barlee is the Policy Director of the Wilderness Committee and a bright, articulate woman who writes very well as you will see if you take a moment and read it in the paper or online. This is an excellent and balanced column as those who know Gwen would expect.

It raises this question. Gwen, because of tax implications for the Wilderness Committee, must be careful of getting into party politics. This rule concerns all advocacy groups who must maintain an even hand politically or lose their tax exempt status. That being said one wonders how the Fraser Institute and the Canadian Taxpayers Federation get away with their partisanship.

But let’s turn that question over to Mr. Milhar. Assuming that the Fraser Institute and the Canadian Taxpayers Federation are not partisan (you may take 30 seconds off for laughing here) why do they get constant access to the op-ed page of the Sun and the Wilderness Committee do not?

Let’s expand that question – recently you’ve had two large legal firms shilling, in the first case for the great impartiality of government Environmental Assessment procedures, and the other on the benefits of the Tory Omnibus Bill that will remove habitat protection; the Omnibus Bill lumps this in with several other initiatives thus all but eliminating any serious debate on the part that eliminates habitat protection rules for large developers.

Over the years, you have given Mary Ellen Walling, shill for the BC Salmon Farmers Association, space any time she has demanded it.

Now then, Mr. Mihlar, how many times have you given op-ed space to Alexandra Morton who, since 1992, has fought against fish farms? Or to Dr. Daniel Pauly of UBC, a world wide name in science who has consistently opposed fish farms. Or to any other opponents of fish farms? Please give us the number.

How many times have you given space to those fighting private power that now has BC Hydro spilling $150 million dollars over the dam because they are forced, by the Campbell/Clark government to buy the power from private companies? I have tried to get an op-ed piece (and I am a professional writer) but you never even answer my letters. Why have you never given space to Erik Andersen, an economist. Or to John Calvert, whose book Liquid Gold tells the entire story. Please provide me, for passing on to others, the times and places you gave op-ed space to anyone opposing the private rivers scheme which has, essentially, driven BC Hydro into bankruptcy – only formally not so because they can visit their losses on to the public through higher rates or government subsidies, or both.

Let’s move on to pipelines and tanker traffic. John Brajcich, a lifelong commercial fisher (as was his father and is his son) can be found on The Common Sense Canadian – his letter tells what will happen with oil tankers full of bitumen going out of Kitimat down Douglas Inlet. How about Rex Weyler? What about Andrew Nikiforuk, whose book Tar Sands gives the full details about the Tar Sands and the consequences of them being piped ands shipped.

Have you permitted any op-ed pieces on the record of Enbridge, who propose the Northern Gateway Pipeline? They have had at least 811 spills since 1998 including one into the Kalamazoo River in Michigan, in July 2010, called a minor spill by the company, which spill has yet to be cleaned up, despite millions being spent, because one cannot clean up bitumen spills.

I challenge you, Fraser Institute Fellow Fazil Mihlar, who has long been in charge of the op-ed page of the Vancouver Sun, to tell me of any op-ed pages offered to environmental groups opposed to fish farms, private power or pipelines and tankers.
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Rich Coleman, who learned about democracy as a cop, has taken away from the BC Utilities Commission the right to review proposed Hydro rates and promises that the government will keep rates down for consumers.

THE ONLY WAY HE CAN REDUCE RATES IS BY SUBSIDIZING BC HYDRO WITH YOUR TAX DOLLARS!

That’s right, folks. Instead of putting several hundreds of millions into the public treasury each year, BC Hydro must cover its losses, taking mandatory private power by financial donations from us, the citizens of BC.

This is not rocket science, folks. As we speak, BC Hydro is spilling millions of dollars over its dams because it is obliged by the Campbell/Clark government to buy power it doesn’t need from private companies at 2+ times the market price. It has been reported that this is costing BCH $150,000,000 this year – it will be much more in the coming years.

The reason Coleman, who since Campbell left has taken over as Pinocchio, wants BCUC out of the setting of rates is because they would look closely at this private power public theft and Coleman can’t allow this to happen.

A COUPLE OF YEARS AGO, THE BCUC DETERMINED THE PRIVATE POWER CONTRACTS WERE NOT IN THE PUBLIC INTEREST – AND THAT’S WHAT THIS DECISION IS ALL ABOUT.
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Lastly, today, I want you to know what you can expect from the Common Sense Canadian re: First Nations’ fight against pipelines and tanker traffic on unceded lands and waters.

We support the position of these First Nations but we would never presume to interfere in any way with their pursuit of these claims – if for no other reason than they clearly don’t need us to tell them how to proceed.

On the other hand, First Nations are also protesting against pipelines and tankers because of the certainty of enormous damage to the province we all share and in that we have a common cause and on that aspect of the issue, First Nations can expect our whole-hearted and active support.

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

May 16, 2012Economics, WATERBC Hydro, ipp, private river power, Water and EnergyErik Andersen

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.

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

May 13, 2012WATERBC Hydro, ipp, private river power, rafe mair, Water and EnergyRafe Mair

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.