B.C. Hydro's privatization plan double first estimate
Public utility is close to signing deal leading to a private firm assuming many of its services
VICTORIA -- B.C. Hydro announced Friday a significant expansion of its privatization plans that could shift more than 2,000 unionized employees to an international management company.
The public utility said it may be as close as six weeks away from signing a major deal leading to the privatization of its customer services, internal computer services, human resources, office services, financial and business department, electrical utility supplies such as lines and poles, and Westech, its information technology subsidiary.
The announcement to employees doubled earlier privatization plans and shocked union members, who had no knowledge their departments were being prepared for privatization.
Although no deal has been signed, B.C. Hydro expects to sign a memorandum of understanding by the end of May with Accenture, a major management and technology service company formerly known as Anderson Consulting.
With its chief executives based in Texas, Accenture has 75,000 employees in 47 countries and had revenues of $11.4 billion last year.
"We want to assure the employees involved in this process that we do have their best interests in mind," Hydro spokesman Elisha Odowichuk said. "This is a good business decision."
Although British Columbians own the public utility, officials at B.C. Hydro would not release any financial details of the proposal or estimate the potential savings.
"We expect it will be a very profitable venture," Odowichuk said.
If the deal goes through, the 2,000 employees would be transferred to Accenture along with their union and contract.
About 1,800 of the workers are members of the Office and Professional Employees' International Union, while the remaining 200 are members of the International Brotherhood of Electrical Workers.
Jerri New, president of OPEIU Local 378, said her members are shocked by plans to sell what she calls the backbone of B.C. Hydro.
"It's outrageous to transfer such an important asset from B.C. Hydro without any public consultation," she said. "There is no positive side for the breakup and privatization of B.C. Hydro for the consumer. We expect to see a price increase in electricity."
If the deal is signed, New said, there are no long-term guarantees for employees.
"They have a lot of questions. What will happen to their pensions? Will they have a job over the longer term? Where will the job be?"
Last fall, B.C. Hydro sought expressions of private-sector interest in taking over customer services, fleet management and Westech. On Friday, the corporation announced to its employees that it is now discussing considerably more services than it originally announced.
Friday's announcement is just the beginning of what is expected to be a major overhaul of B.C. Hydro's operation.
A government panel on energy policy has recommended the corporation be broken up, privatized and electricity rates hiked.
The recommendations, if adopted, could result in electricity price increases of up to 60 per cent for B.C. industries and 30 per cent for homeowners.
Under the plan proposed by the committee, B.C. Hydro's generation, transmission and distribution divisions could be torn apart, established as separate businesses and privatized.
Meanwhile, an Ontario court said Friday that province's government does not have the legal authority to sell its electricity grid.
In the late 1990s, the Ontario government broke up Ontario Hydro into three companies. It was expecting to privatize Hydro One -- the company that owns the transmission towers and the lines that carry power -- for an estimated $5 billion.
jbeatty@direct.ca