NDP wants audit of B.C. Hydro's private-power deals

by Matthew Burrows on December 22nd, 2009 at 4:31 PM

Wilderness Committee national campaign director Joe Foy wants B.C.’s auditor general to investigate the sums of money involved in the long-term power-purchase agreements B.C. Hydro has signed with independent power producers.

“We’ve never needed our auditor general more than right now,” Foy told the Straight earlier this month. “The people of B.C. are at more risk right now than just about any other time I can think of. Our citizens are in dire straits.”

Provincial revenues have plummeted, while Foy estimates B.C. Hydro will owe private power companies “over $30 billion” through “secret contracts” the utility signed with them. He said B.C. Hydro could end up owing independent producers more money than the provincial debt.

“That means that not only is B.C. Hydro at risk of going under, I think we are all going to be at risk of going under,” Foy said.

On the subject of bringing in the auditor general, NDP energy critic John Horgan told the Straight, “I agree with Joe.”

Horgan said that, while the spot-market price for electricity fluctuates, it averages $50 per megawatt hour. The lowest price “quoted with any authority” that B.C. Hydro has agreed to pay to independent producers is $88 per megawatt hour, he added.

“So, we’re not making money; we’re losing money,” Horgan said. “And that has had an impact on Hydro’s ability to provide revenue to the Crown. That strikes me, and it strikes [NDP finance critic] Bruce Ralston—the chair of public accounts—as an issue worthy of investigation. And I believe that he’s going to be writing to the auditor and seeing what he plans to do about it.”

B.C. Hydro spokesperson Susan Danard told the Straight the B.C. Utilities Commission regulates the Crown corporation and requires all power-purchase agreements to be made available on the BCUC Web site.

Danard added that “there are some redactions” if the information is deemed to be of a commercially sensitive nature.

“What’s redacted is [removed] in conjunction with the proponents,” Danard said.

Comments

13 Comments

Camero409

Dec 23, 2009 at 8:04am

Well it seems that Gutless Gordo and the rest of the spinless LIbERalS are on track to force BC hydo to go BROKE and thereby justify privatizing our, the people of BC, asset just like they did with BC Rail. If it were anymore obvious it would be slapping us in the face. Of course GG doesn't want to do it publicly so he secretly tells Hydro to make secret deals with private power companies. GG thinks the people of BC are stupid. He may be right after all. Only 48% of eligible voters actually voted in the last provincial election. Just what the spineless bunch wanted. Voter ignorance is high on their list of preferences. This is of course aided and abetted by the main stream media.

Prominent individuals like Raif Mair, Joe Foy and others are speaking out. Can you hear their voices? Other than the Georgia Straight, The Tyee and independent news sources are the only ones raising the alarm. We must make the LIbERalS see that we are not ignorant. Write them, tell them we know what they're doing and they aren't going to get away with it. Next election, VOTE THEM OUT!

No Kidding!

Dec 23, 2009 at 12:10pm

Good luck with that NDP - these are Gordon Campbell's cronies you are trying to interfere with! I think there are laws against it by now or at least the trials will be indefinitely delayed (BC Rail)...

Seriously, I am grateful we have some people still interested in the good fight. Thanks.

linda

Dec 23, 2009 at 7:58pm

I do not think the people of B.C. know just how bad it will get..and by then the liars and thieves that run this province will be long gone with their golden pensions and fat bank accts. from privatizing B.C.Just wait until Gordon Campbells "Smart Meters" for electricity come in and the "water meters" he wants to see on every house.B.C.Hydro as we know it is gone.People research the smart meters(enough to make one sick).As for auditing the B.C. hydro..were the NDP asleep..should have been requested long ago.

dennis

Dec 23, 2009 at 10:14pm

the goverment is suppose to be the people. In websters dictionary the word treason is the betrayal of the goverment. would this fall under this?
I don't know,but I can't understand why a goverment would want to do this to it's voters unless there was a lot of money to be made for the state and
why should the voters have to pay for something they already own?

keyboardwhiz

Dec 24, 2009 at 7:55am

Regarding the use of the word “redacted”. Unfortunately we are seeing the improper choice and use of words in the English language today. The correct meaning for this word is “ prepared for publication” or maybe the words “edited for publication”.

The court system and government agencies of all sorts have started the improper use and meaning of this word in an attempt to make the meaning of this word to be “material that it cannot be read correctly, because it has been blacked out.”

A more accurate use of language for this type of thing would be “censored”. Now we just can’t have the public obtain the knowledge that we are collectively being “censored” at almost every step of the way. That would be a much too inconvenient truth.

seth

Dec 24, 2009 at 11:11am

It is really quite simple. I don't see why Foy/Hoggan assorted MLA's and you reporter's have so much trouble getting it.

According to BCHydro's 2009 annual report, it purchased in 2009 8374 Gwh for $544M from IPP's versus 7765 Gwh for $481M in 2008.

That works out to 10 cents a kwh (544-481)/(8374-7765) for new IPP contracts coming on line in fiscal 2009.

In the 2009 report BC Hydro admitted to having contracted for 14400 annually Gwh for 2011 service or 6026 more than 2009. Assuming the 10 cents in the 2008/09 the 2011 IPP total will grow to $1147M (.10*(14400-8374)+544). With the 12 cents/kwh in the JISEC report (Google Joint Industry Electrical forestry) that grows to $1267. The 12 cents is the more accurate amount since all IPP contracts have an escalation clause. So by 2011 BCHydro is contracted to pay around $1300 pa for around 40 years a debt commitment of $52B

Now lets add in the 5000 Gwh in contracts that the con's at Canwest/Gordo have said BHydro must now sign. That's another $600M annually adding $24B bringing the total IPP debt commitment to $76B.

If you add in $10 billion in other 3P's we now have $86B in off the books debt compared to the $32B on books debt that you uninformed pundits bring up when discussing BC's financial picture. With slick accounting and compliant reporters the 3P debt shows up as a tiny comment line about future obligations way in the back of the auditor general's report.

In 2009 BChydro total domestic purchases were $1236M
($544M IPP, $692M nonIPP). With Lekstrom's new order assuming no growth in non IPP domestic expenditures that amount will become $2559 ($1267+ $600 IPP, $692 non IPP) requiring BCHydro rates to more than double. 75% of BCHydro's expenditures will be IPP and BCHydro will be largely privatized.

A 2008 report from the big electric buyers group JIESC concludes that the Pirate power buys will result in a total $15B in losses for BCHydro over the 40 years of purchase commitments. Given that BCHydro is buying at 12 cents a kwh and selling into the spot market at 1 to 5 cents a kwh and into a future US nuclear market at .5 to 2 cents a kwh the $15B in losses seems optimistic - almost the entire $85 billion could be lost.

Today's spot price is $.05/kwh peak $.02/Kwh off peak half that during the spring freshette. Just to give you an idea of what the rest of the world might be paying for power in ten years with 30 years to go on the Canwest/Gordo contracts read these

http://www.huffingtonpost.com/steve-kirsch/climate-bill-ignores-our_b_22...
http://www.wired.com/magazine/2009/12/ff_new_nukes/

LFTR's at $500/Kw ($.5B/Gw) with almost no fuel cost works out to less than a half cent a kwh for high value baseload power less than 4% of the Canwest/Gordo commitment for low value intermittent power.

If you look at the recent purchases and plans for high cost IPP power, Canwest/Gordo will have contracted for about 12000 Gwh's annual at around 12 cents a Gwh. Thats about 1.3 Gw baseload equivalent for $76B or $58B/Gw. Ontario recently rejected a quote as too expensive from Areva nuclear for $24B for 60 years of 30000 Gwh annually (3.3 Gw,$2.4B/Gw) in nukes all costs considered which works out to 1.5 cents a kwh . AECL completed reactors in China in 2004 in three years for $2B/Gw. Westinghouse is building reactors in China for 2013 service for $1.5B/Gw (2% Canwest/Gordo) and is predicting mass production at less the $1B/Gw (1% Canwest/Gordo).

Given that the BCHydro has sufficient resources for next several years why not wait until some sort of commitment to eliminating fossil fuels is made and the direction green technology is taking becomes firmly established.

Of course by the time Pirate Power gets in full production, every business that uses electricity will have moved to Alberta and BCHydro will be bankrupt.
seth

BC Mary

Dec 25, 2009 at 10:28am

.
Quoted from Seth's comment: <i>"I don't see why Foy/Hoggan assorted MLA's and you reporters have so much trouble getting it."</i>

True, true, oh so true! these questions are so critical, it's a deep mystery as to how the media AND the BC Opposition haven't carried the warnings to every town, village and street-corner.

I believe the rot became evident when BC Rail slid from our public ownership into private pockets in a deal still partially secret. Every double-cross since then has followed the same pattern, with BC Hydro being the most outrageously, appalling visible and harmful ... so yes, the media and the Opposition have failed in their duties.

Thanks to the Straight for this summary ... and now, will the others stand up and do their part?

Best wishes to British Columbia for all the New Years ahead.

http://bctrialofbasi-virk.blogspot.com/
.

BC Mary

seth

Dec 26, 2009 at 5:29pm

It's worse that that BC Mary

If you try to comment on IPP's in Smyth's column he'll block it. Smyth seems to be the only MSM pundit that allows comments at all.

Very difficult to bring it up on CKNW as you will be cutoff or they will not get to your comment because "others" are always ahead.

It's an MSM conspiracy to keep those IPP stockbrokers raking in the $Billions. I guess our MSM pundits get lots of lucrative speaking engagements in exchange.
seth