Editorial in the Vancouver Sun. “B.C. consumers will soon pay more -much more -if the province follows the lead of Ontario where power prices are soaring, not just as a result of higher generation or transmission costs, but because of ill-conceived energy policies.” Read article
Remember the “Fast Ferries” fiasco, friends?
That cost $460 million and more than any other issue brought the NDP down in 2001. What wastrels! cried the Campbell opposition. “A disgrace!” “Think of all the social programs that suffered!”
Can you imagine what the business community would have said if it had been 10x that, say, $4.6 Billion?
There would have been cries to send Premier Clark to jail! Maybe bring back capital punishment! I can imagine Phil Hochstein, the ever quotable spokesperson for and president of the Independent Contractors and Businesses Association. Phil can always be counted upon for a spirited speech in favour of capitalism at a hint of the NDP as a potential government. He would not only be speechless at $4.6 billion, he might well, poor chap, die of apoplexy!
What if the NDP had done 10x10x$460,000,000? Or even worse, say $50 billion and rising? I can’t imagine what poor Phil would do. At the very least he surely would have demanded that all members and suspected members of the NDP – and fellow travelers, of course – be banished into permanent exile! Are there no stocks in the public square? What’s happened to the prison hulks? Where’s Botany Bay when we really need it?
(Let me say here that I know and like Phil – it’s just that he has become such an eloquent spokesperson for the blessings of capitalism and, dare I say it, a sneering enemy of the left. He’s obviously the industry’s bulls-eye to shoot at if you care at all about the monstrous “rivers policy” of Pinocchio and his pals.)
$50 Billion is a conservative estimate of the amount BC Hydro must pay private power producers (IPPs) for power they cannot use – on a take or pay basis – and must sell at ½ price at best. These sweetheart deals are scarcely with little mom-and pop operations as we’re assured by Pinocchio, but huge out of Province corporations like Ledcor and General Electric; nor are they, as Finance Minister Colin Hansen assures us, harmless little old mills. almost invisible, spinning away, and lighting up all our homes.
These IPP plants, as anyone can see by just going up past Squamish to the Ashlu River, are environmental nightmares; they destroy the fish, thus the ecologies dependent upon the river, and require massive clear cuts to make way for roads and transmission lines.
Many of the larger projects – Bute Inlet, Klinaklini, Upper Pitt, Glacier/Howser – are on hold for indefinite periods because it’s occurred to the companies and the government that the public of BC won’t put up with them, with massive civil disobedience the obvious consequence. Stroll through this website and see Damien Gillis’s filming right around the province and see for yourself what these little Mom and Pop, unobtrusive plants look like when they’re in operation.
The companies and the Campbell government peddled these environmental and fiscal horror stories as “green” projects! In fact, in April 2009, when the NDP put out their platform condemning these projects for what they are, here’s what Phil Hochstein had to say:
“There can be no more damning evidence that the NDP has all but abandoned its green and youth voters in favour of the labour agenda than its opposition to green energy projects. Heralded by President Obama, and embraced throughout Europe, the development of a renewable energy industry is clearly the social, economic, and environmental opportunity of our generation. Yet, James and the NDP have come out staunchly in opposition to green energy projects. And why? Because the public unions don’t want any energy, green or otherwise, developed in B.C. unless it is under their control.”
Somehow Phil’s research missed the point that these projects, far from being green, were brown and that the use of that word is just what George Orwell told us would happen in his great book, 1984. It’s “newspeak” on the theory that saying that brown is green often enough the unwary public will accept it.
Free enterprisers like Phil didn’t notice, evidently, that BC Hydro, being forced to buy this “green” power from private power producers, on a “take or pay” basis for power they didn’t need – nor that BC Hydro was forced to buy this private power at double or more what it could sell it for, a sure prescription for bankruptcy.
This isn’t Phil’s fault – I only pick on him because he has so clearly articulated, for the business community, the bullshit the government was peddling.
Folks, it gets worse.
The principal market for this half price sale BC Hydro is forced to put on is California. Remember the beaming Premier looking lovingly into the eyes of Governor Terminator of California, aka Arnold Schwarzenegger, as they pledged their troth? Capitalist eyes wept in happiness at all that ½ price BC electricity heating swimming pools in California.
For this I’m indebted to Jim Quail, Executive Director of the Public Interest Advocacy Centre. Referring to Campbell’s policy he says:
“This strategy has hit a roadblock, created by California’s environmental standards. They classify any run-of-river project rated above 30 Megawatts as non-green. That captures all of the hydroelectricity BC Hydro is buying from IPPs. Spot prices for this stuff are projected in the $35-40 range per MWh over the coming few years, but we will be paying IPPs as much as $120 per MWh. We’ll have to dump the surplus on the spot market for a huge loss. (My emphasis)
Premier Campbell has been lobbying hard to get California to raise its 30 MW limit for premium power, without success so far.Things could get even worse. There is a proposition on the California ballot for November which would suspend that state’s clean energy laws until unemployment drops below 5.5%. That could be several years. If this passes, our surplus IPP power will have no chance of gaining a premium price. There will be no market in California for high-priced ‘clean’ power.”
Even if California changes its mind, BC Hydro is faced with selling power it has been forced to buy at 50 cents on the dollar, tops!
Here’s the score, folks, in the fiscal f#@k-up department: On our left, wearing the pink undies, the NDP gave us Fast Cat ferries that didn’t work, at a loss of $462 million dollars.
On our right, in the blue bloomers, Gordon “Pinocchio” Campbell and his “green power” at $50 Billion, gives us power we can’t use and which must be exported to a market that isn’t there. (Always remembering, of course, that if they don’t go bust first, they might get up to ½ back, except that at Pinocchio’s insistence BC Hydro continues to enter new contracts!)
Over to you, Phil…
There are rumours abroad in this province that Gordon Pinocchio Campbell is losing interest in private power projects and moving over to Site “C”. The apparent reason is that California refuses to consider the power green or clean – something the Common Sense Canadian has been saying for a long time. Whether this rumour is true or not, nothing is changed with respect those licenses now granted or those approved in principle awaiting the ersatz Environmental Assessment fiasco. What any new government would be obliged to do is open sill the existing contracts to the public – remember, these contracts were forced upon BC Hydro, our company – and if unfair, cancel them.
Carole James said in the last election that she would honour existing contracts and that simply doesn’t make sense. If she were running for mayor of a city on a pledge to clean up the corruptness of its previous leaders, and, upon winning, found that the contracts signed by them were all long-term, sweetheart deals with political pals, would she then honour the contracts? If so, what was the point of electing her?
We hear it said that if those contracts are tampered with, new business wouldn’t come and existing business would flee the province. That’s nonsense. If there are good business opportunities, businesses will come.
I believe that Ms. James and the NDP must put together criteria for examining these deals which would include seeing if the province of BC will benefit. If, as the truth unfolds, we find that these were long-term deals for government’s friends and donors; if we find out that most of the power produced by private power projects must be exported because they can’t make the power when BC Hydro can use it; if we see that the environmental damage is huge and irreparable; if we learn that BC Hydro is hurting badly and will soon be decapitated if it must continue to buy private power power at double what Hydro can sell it for and is thus on a clear path to ruin – under these circumstances the contracts have to be canceled, which can be done by an act of the Legislature. Too bad for the companies but they knew the contracts were theft, and thieves, whether corporate or not, deserve no sympathy.
Site “C” raises new issues. Damien Gillis and I both oppose this development and, no, we’re not against everything. British Columbia, contrary to government lies by Campbell and Colin Hansen, is not a net importer of power. BC Hydro is sometimes but BC Hydro isn’t the only power maker; when you count the others – Fortis, Alcan, and Teck-Cominco – BC is typically a net exporter.
The fact is that no power system can produce all the provincial needs under extreme difficulties. To maintain such a system would be horrendously expensive and wasteful. That’s why Burrard Thermal is needed and, as the BC Utilities Commission noted a year ago, ought to be expanded as our need grows.
But here is the point: Burrard Thermal must only be used when there is a serious shortage, which happens a few days a year – in the dead of winter when are needs are greatest and supply at its lowest.
Burrard Thermal, thanks to the Campbell government, has had a bad press. It’s not a pollution-belching plant at all. It uses natural gas which, after hydro power, is the next best producer.
Look at it this way: when a hospital is suddenly deprived of power, a backup system kicks in to cover off the (usually) short blackout. Some of my neighbours have back-up generators for the black-outs we get when hydro lines are down.
The public of BC have been very badly served by this government which has not been up front and honest about the power challenges in BC but has plainly lied through their teeth.
Site “C” is a debate the public – a well informed public – must have. Can we afford it? Most importantly, who are the target customers?
It’s said that even if it mostly exports power, there’s nothing wrong with that. This raises the critical question: is BC prepared to inflict serious and permanent environmental damage and ruin vital agricultural land in order to export the power produced? What if it’s designated for the Tar Sands and other egregiously bad environmental nightmares?
What Carole James and he NDP must do is come up with a policy and that policy must be to eliminate the secrecy and permit citizens to be heard not after the approval in principle has been given, but before. I realize that consulting the people is a shocking thought but not, I can tell you, to the people! Municipalities must be given back their right to zone power plants by repealing Bill 30. It strikes me as odd that people get to say their piece if the issue is a new building or a shopping centre or even it the proposed development is a store they don’t like, such as Walmart – but have no say when a private power producer wants to bugger up a river and the ecosystem it supports.
Governments generally, but especially this one, are scared of people participation in policy that directly gets in the way of government plans.
The public ate not to be trusted, says Mr Campbell – we know best!
A government that operates secretly and tries to shut out the public is begging for serious civil disobedience.
Finance Minister Colin Hansen has, faintly, apologized for his handling of the HST.
Let’s get this straight minister – you didn’t make a mistake, you lied. You had two briefing papers, one written at your request, that 2 months before the election, gave you the skinny on an HST policy for BC. The question of HST was one of the most controversial finance issues in the country. You and the Premier knew that and your ministry and the Premier’s office had been in touch with Ontario and federal issues. To the long list list of the premier’s serial falsehoods – your 1:51 statement on private power, found by googling Hansen/private power, contains 5 statements each of which is false.
I bring this up for www.thecanadian.org because our talented filmmaker Damien Gillis and I will be starting a tour of BC in October and those whom we address ought to know that your credibility and that of your colleague Gordon (Pinocchio) Campbell will be severely challenged.
The purpose of our tour is, of course, not only to deal with your government’s lie-based Energy Policy, but to demonstrate what we can do in the area of self-sufficiency for BC power needs without ever damming so much as a tiddler’s creek.
The opening question will run like thus: if you, Mr, Mrs, and Ms British Columbian, wanted to have BC energy self-sufficient for the foreseeable future, what would you do?
We will then lay out our plan and compare it to that of your government. In dealing with this matter we will point out the credibility shortcomings of you, the premier and your government. High on the list will be your five statements alluded to above; we will deal with each of them, and ask the public whether they believe you. But we will also lay before the public the relatively simple route we can take – the route your government should have followed.
We will demonstrate that not only have you denied the public a right to be heard – you have forbidden local governments to zone power projects according to the needs and desires of the local population.
Your difficulty, Mr. Hansen, and through you to the premier, is that no one believes you any more. During the time the public, very much including me, was asleep at the switch, no one was challenging you. We trusted and believed you. We saw your energy plan as having no environmental impacts and necessary for our energy needs because that’s what you told us.
As you know, minister, I’ve been there. And I know that even the most of unpopular programs will be accepted, even grudgingly, if the truth and the whole truth is told to the public. When the Bill Bennett government came into office in 1975 we found a public government car insurance company, founded about 18 months before, that had managed to lose nearly $200 million with a monopoly! We immediately raised premiums so as to make the company viable and all hell broke loose, amongst our supporters as well as the general public. We had, however, told the entire story to the public and they came to accept if not like our policy. The message from my experience, minister, is don’t ever lie to the public. I’m afraid that my advice is too late for you.
Here is what we will be doing: I give you this in the hopes that you will send a MLA – or either or both of you and the premier for that matter – so we can let the public decide who is telling the truth.
With the help of Damien’s great camera work we will show the people just what these “little run of the river” projects really look like.
We will debunk the nonsense that these weirs (the Independent Power people don’t like to call them dams, which they are) are being built by little people, Mom and Pop operations, as the expression goes.
We will show the enormous damage done by roads and transmission lines to and from the “weir”.
We will outline the true cost of these “little ol’ weirs” in terms of destruction of ecologies these rivers support.
We will go right to the root of the matter and demonstrate beyond doubt that whatever our power needs may be now or in the future, they cannot be met by Independent Power Producers (IPPs).
We will demonstrate how your government has forced BC Hydro to pay, on a “take or pay” basis, 2-3 times what it can sell that power for.
We will demonstrate why IPP power is of virtually no use to BC Hydro and its shareholders (us) because it mainly comes at high run-off time when BC Hydro doesn’t need it and thus must sell it at a loss or, if it chooses to use that power, must pay to the IPPs about 8 times what it can produce it for itself.
We will show how your policies are bankrupting BC Hydro and – are you ready for this? – how BC Hydro will no longer be able to pay its handsome annual dividend to the government unless it raises the rates to consumers to get the money!
The public will understand well the calamity that your energy policy is because we are telling the truth, backed up by independent experts, while the Campbell government relies upon one falsehood after another; because on this and most other issues, your government has practiced gross deceit and the public knows it.
You and your government, Mr Hansen, have done enormous permanent damage and it cannot all be undone. But the jig is up. And though the forfeit is piddling compared ti what it should be, you and your colleagues will be expunged from your seats of power by a population that knows it’s been lied to.
POSTSCRIPT: I do not say that Campbell and Hansen are liars – just that on the occasions referred to they were lying.
Article by Erik Andersen in the North Shore News. “All indices that have not been politically contaminated continue to reflect a weakening economy in B.C. and, by extension, a lessening of the demand for electrical energy. My invitations to other experts to explain or justify Hydro’s massive increase in borrowing, spending and productivity on the basis of domestic “need” have gone unanswered.” Read article
The third Common Sense cartoon from Gerry Hummel!
Article by Rafe Mair in The Tyee. “The picture (Erik Andersen) paints is of a once rock solid Crown corporation placed on the road to fiscal ruin by the Campbell government.” Read article
Republished from BC Citizens for Public Power
The B.C. Energy Plan, portrayed by the Liberal government in 2002 as “clean energy leadership,” now appears as a thinly disguised campaign to privatize our public utility, B.C. Hydro. Backed by powerful international financing, our own government converted public assets into private hands for private profit, while raising our domestic electricity rates to pay for the swindle.
In 2001, Gordon Campbell and the B.C. Liberals made two election promises regarding our public energy utility. They promised to “Protect BC Hydro and all of its core assets, including dams, reservoirs and power lines under public ownership.” And they promised to “Restore an independent BC Utilities Commission” to regulate our electricity rates.
Once elected, they immediately broke both promises. The B.C. Energy Plan systematically dismantled, privatized, encumbered, and disempowered BC Hydro. The plan attacks our public power utility with a hundred small cuts. In the first stroke, they privatized BC Hydro operations, power transmission, and access to BC’s rivers. The plan forbids our public utility from increasing its power capacity and allows only private companies to generate new sources of electricity in the province. Finally, the plan creates a financial burden on BC Hydro, forcing it to buy unfairly priced power, which has caused BC Hydro – once a profitable public company – to lose millions of dollars, a recipe for the bankruptcy of public power.
In a recent study, economist Erik Andersen outlined how our own Government set out to bankrupt B.C. Hydro. The public utility has historically been profitable, returning income to help pay for B.C. schools, hospitals, and other services. For the year ending March 31, 2007, B.C. Hydro contributed $379 million dollars to the provincial treasury. Those days appear to be over.
In 2008 B.C. Hydro lost $72 million, and the year ending March 2010 indicates a net loss of $249 million. This is a reversal of $628 million in net income over four years. You might think the government would be horrified, but this has been their strategy all along. To hide this news from the public, the government drew money from the provincial “regulatory account,” and inflated intangible assets like “goodwill” on the balance sheet, accounting maneuvers used to hide the losses.
Meanwhile, the government has been increasing B.C. Hydro’s debt to pay for expensive power from private companies. This shows up in the debt-to-equity ratio, a measure of a company’s health. A company, like a family household, is more stable with low debt and high equity. Traditionally, BC Hydro’s debt/equity ratio has been about 70/30. By 2009 the debt had risen to an 81/19 ratio. If we exclude withdrawals from B.C.’s Regulatory Account, the 2010 ratio is 89/11. Any business person would tell you, this is a recipe for bankruptcy.
This destruction of B.C. Hydro is a tactic in the privatization of energy. Since the government has forbidden your energy utility from developing energy, we now buy about 16% of our energy from private corporations through 89 “Electricity Purchase Agreements,” contracts that force B.C. Hydro to buy power at 3-4-times the historic cost. We now pay $80 to $125 per megawatt-hour for energy that BC Hydro can generate for $20-$30 per megawatt-hour.
To subsidize this expensive power, the citizens of B.C. pay in two ways. First, energy rate hikes have added about 10% to our household energy bills, with another 6% increase planned. Secondly, the cost of energy is reflected in the financial losses of our public utility.
When the Liberal government began to privatize B.C. Hydro services, they hired Accenture, formed by refugees from the Arthur Anderson consulting firm associated with the Enron scandal. Accenture took over certain B.C. Hydro services, such as billing and administration. Energy Minister Richard Neufeld promised that B.C. Hydro would save $250 million in operating expenses over ten years. Under questioning from the opposition, Neufeld had to admit that he had not even read the Accenture contract. Now, six years into the privatization scheme, B.C. Hydro expenses have increased, not decreased.
The government has kept financial records with Accenture secret, so the public cannot see what is going on, but Will McMartin at the Tyee dug into the records to find out how we are doing.
Over the first six years of the contract with Accenture, the government budgeted to pay the private company $832.9 million dollars. In actual fact, the government has paid Accenture $1.168 billion, about $335 million over budget for six years. At this rate, through the ten year contract, the government will be over budget by about $560 million. So, instead of $250 million in savings for B.C. Hydro, these figures suggest there will be a $310 million increase in expenses. That means that Neufeld’s prediction was wrong by half a billion dollars! And who pays for this? You do.
Meanwhile Accenture executives such as Peter Leighton and John Icke, who helped write the deal, have jumped onto the privatization gravy-train. Last March, the government awarded their company, Finavera Renewables, four Electricity Purchase Agreements.
Meanwhile, demand for electricity has not grown as the government claimed it would, and in fact has declined. In B.C., the demand for electricity has been falling since 2008, declining by 3.8% in the year ending March 2010. Demand for BC Energy by foreign customers has collapsed, which leaves B.C. Hydro and B.C. citizens stuck with expensive purchase agreements that are unnecessary.
Our government has privatized the profits and stuck the people with the losses. We need to restore BC Hydro, once one of our province’s strongest public companies and a competitive advantage for our economy. B.C. Hydro was a secure, public, long-term energy utility that could manage complex social, ecological, and energy values for our public benefit. Private power promotes consumption, while public power can conserve and operate at an optimum scale. Private power has a single goal: profit for a few insiders. Public power, operated by BC Hydro, can serve our complex public objectives, including conservation, job creation, and fair energy rates.
Article by Don Butler in the Ottawa Citizen.
“(Tom) Adams (of Energy Probe) assigned much of the blame for the rise in electricity rates to Ontario’s Green Energy Act, which promotes the use of solar, wind and other alternative power sources.
“The Feed-in Tariff (FIT) program, which locks in generous payments for 20 years for large green energy projects, is ‘just outrageous,’ Adams said.”
A vector gives information as to direction and the magnitude of a changing position. A series of financial statements can also provide vector information about the financial health or otherwise of corporations.
Now what to make of this all? First off it was clear as long ago as 2006 that the growth in domestic demand for electricity was slowing and reversing. With this evidence it is hard to understand why the management and Board at BC Hydro embarked on the increased spending and aggressive contracting for energy from IPPs. From the 2010 Report it is manifestly clear that sales to outside of BC customers have collapsed. That leaves only the captive domestic customers to carry the growing financial burden.
As the evidence of need for more electricity in BC is not apparent, the aggressive borrowing/investing/contracting with IPPs is plain wrong. It is improbable that the BC Hydro team are “financial illiterates” so there must be some other explanation; hence the word “sinister”.