Tag Archives: Water and Energy

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

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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.”

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

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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.

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

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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

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Vancouver City Councillor and Former Hydro Engineer George Chow Questions “Smart” Meters

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Read this story form the Georgia Straight on Vancouver City Councillor and former BC Hydro engineer George Chow’s criticism of the Province’s “smart” meter program.

“The two-term Vision Vancouver councillor suggests that the installation
of these wireless digital devices may result in consumers being charged
more when they use energy during peak hours…’I mean, you come home from work, you have to cook, you get up in the
morning, you have to cook, so the demand side of this so-called
management in order to save energy, I think, is quite questionable,’
Chow told the Georgia Straight in a phone interview. (Sept 2, 2011)

http://www.straight.com/article-444131/vancouver/chow-questions-hydro-smartmeter-program

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NDP Energy Critic John Horgan on Hydro Report, IPPs

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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)

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

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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.

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Rafe & Damien on EVOTV (Part 2)

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Watch part 2 of Rafe and Damien’s discussion on Shaw’s EVOTV, with host Irma Arkus. In this episode, the pair talk wild salmon and aquaculture, private power and environmental politics in BC. Damien Gillis: “This isn’t free enterprise – it’s piracy. It’s a bunch of people looking out for their pals – global corporations that have taken over our whole system of governance; and it’s about whether we’re going to get back to common sense, public-oriented policy.” (30 min – taped in late July) Watch Part 1

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

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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

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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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