Privatizing Power

By RUSS FRANCIS
Monday Magazine
Jun 27 2007

Electricity isn't the only part of Hydro moving to the private sector

Is B.C. electricity being privatized? Since the Liberals moved in 2002 to require virtually all new power sources be run by private contractors, critics have warned that control of electricity is moving out of citizens' hands.

The consequences may be considerable, according to B.C. Citizens for Public Power, a non-profit group aimed at retaining public control of Hydro.

For one thing, it claims, the privatization will lead to higher rates-something that has already started.

For another, it means less money for the provincial government. For the year ended last March 31, BC Hydro was expected to bring Victoria $400 million, up from $266 million the previous year.

Once more of that revenue source is turned over to private owners, that stream will dry up, says the group.

And, as with any kind of contracting out, letting the private sector run things means less accountability and transparency. While BC Hydro, for instance, is covered by B.C.'s information-access law, its contractors are not (though some of that information would normally be available by virtue of the companies' Hydro connections.)

What if things go badly with the private contractors? Surely we can always hand control back to Hydro?

Perhaps not.

The lobby group says that under the North American Free Trade Agreement, privatization may be reversible only at an enormous financial cost: Refunding the private companies the profits they would otherwise have lost.

One of Hydro's more prominent contractors is Vancouver-based Plutonic Power Corporation, which has 29 generation projects under development, intended to eventually produce a total of 4,800 gigawatt-hours of electricity each year.

Hydro has awarded Plutonic generating contracts worth more than $2 billion. But the connections with Plutonic are more than just monetary-and they're growing.

Earlier this year, Plutonic hired BC Hydro engineering vice-president Bruce Ripley as its executive vice president for operations. He started at Plutonic on April 1. BC Hydro has no restrictions on its employees working for contractors after they leave the Crown corporation.

Last year, New Democrat MLA Guy Gentner questioned Plutonic's Hydro contracts because of another connection. Plutonic's corporate affairs director, Bob Poore, was formerly executive assistant to Rick Thorpe when he was competition, science and enterprise minister. Poore joined Plutonic in early 2005.

"It's a little close I think to the time he left the government and moved over, particularly to corporate affairs," Gentner said in an interview last year. "That's a big jump."

At the time, Plutonic president Donald McInnes called Gentner's suggestion "bullshit." McInnes added that he had been friends with Poore for decades.

Also last year, Hydro spokeswoman Elisha Moreno said the Plutonic contracts were decided only on the basis of price, reliability and availability.

Well, guess which Hydro spokeswoman has just gotten a job? And guess which company it's with? Yup, Moreno starts next week as communications director with-Plutonic Power Corporation.

In an interview, Moreno says the new position is the next logical step in her career, offering her the chance to build a communications strategy for a new company.

"They've got a very ambitious business plan over the next few years, and they need someone to be on the ground in the communities where there's going to be development planned, and just to start building those relationships and doing the public education so that people will accept the projects that are going to be proposed."

Moreno, a well-respected official who has worked for Hydro for the last seven years, notes the Crown corporation places no restrictions on where its employees move to. She also says once the decision was made to move to Plutonic, Hydro was careful to make sure she had nothing to do with Hydro's open calls for power or with its "standing offer." The standing offer, released in draft form on June 20, invites proponents of "clean energy" projects to make bids to provide power, using small generating systems.

"We've been really careful internally here," Moreno says. "It wouldn't be appropriate for me to have knowledge of those, going into that position."

But the NDP's Gentner still believes there's a problem.

"The civil service is really becoming an entry-level of inside information for the highest bidder," Gentner says, speaking in an interview this week. "We're losing people, aren't we?"

He adds he is surprised to hear Moreno remained at Hydro, even after she revealed she was moving to Plutonic. "For her to be announced as leaving for Plutonic and still have a relationship [with Hydro] is totally unacceptable," he says.

Gentner says Moreno's role at Hydro was considerable: "She seems to be the main conduit between [Hydro president and chief executive officer Bob] Elton and the public."

Both the public service proper and Crown corporations should have a "cooling off" period for their employees of at least six months before beginning work for a company they dealt with, he adds.

Though Plutonic has yet to earn any revenue, its share price has shot up from less than $2 a year ago. Its shares closed Monday on the TSX Venture Exchange at $7.30.

Last month, GE agreed to invest about $100 million, in exchange for part ownership in the company.

According to Hydro's financial statements, Moreno was paid $114,955 in the year ended March 31, 2006, the last year for which figures are available. In addition, she was paid $9,074 for expenses.

In the same year, Ripley was paid $222,284 in salary, plus another $7,726 for expenses.

While not all of Hydro is being formally privatized, before long there may not be anybody left there.