Electricity rates could soar

By BRIAN LEWIS
The Province, Jan 27, 2001

 While the election-bound NDP government in Victoria is puffing out its chest over the fact that windfall profits from B.C. Hydro electricity exports to California are placing it into a budget surplus, it would do well to remember that "pride goeth before a fall."

And B.C. electricity users may be heading for a great fall of Humpty-Dumpty proportions.

There's a growing concern among B.C. energy experts that domestic ratepayers could be held up for ransom within the next few years. They could be forced to pay very high prices for electricity that will need to be imported, or will be produced domestically from generation plants fed by highly priced natural gas -- or both.

In other words, we may quickly change from being windfall sellers of electricity to pay-through-the-nose buyers of electricity. You've already taken a massive hit on rising natural gas prices -- now imagine if your electricity bill increases by a similar magnitude.

The scenario isn't far-fetched.

First of all, demand for electricity in North America is increasing at an unprecedented rate and it's being driven by "new economy" computers and other fancy high-technology equipment.

As B.C. Gas chief executive John Reid noted recently, a typical Internet web-hosting centre uses the electricity equivalent of eight 40-story office buildings!

"A personal computer and its peripherals typically boost home power consumption by about five per cent and a Palm Pilot connected to the web can add as much new electric load as a refrigerator in the (Internet) servers, routers and digital transmission systems that feed it," he said in a recent speech.

So, where is the added electricity supply going to come from and what will it cost?

The fear in B.C.'s energy sector is that a "gold rush" mentality has become entrenched within the B.C. government which, of course, runs B.C. Hydro. The Crown corporation is the desperate Dosanjh government's most-prized cash cow, with export markets bringing in about $1 billion this year.

But like an 1890s gold rush, where miners built only the quickest and cheapest shanty towns in order to spend as much time as possible on extracting the wealth, the concern now is that Hydro is cashing in on today's export markets with not nearly enough regard for the longer-term well-being of ratepayers.

In fact, we may already be over-selling exports to the point where domestically we're approaching a power deficit. One indicator here is the fact that the 900-megawatt gas-fired Burrard Thermal plant in Port Moody has been running at full output levels recently.

The suspicion is that Burrard is being used for export -- either directly or indirectly -- but Hydro will never admit that. In fact, it's very easy for Hydro to use Burrard for domestic purposes thus saving water in its massive reservoirs which can then be used to generate export power.

More worrisome is the snowpack. It's well below normal levels and there's not much winter left to build it up.

A dry year, or several dry years in a row, will have a massive impact on Hydro's hydroelectric generation and if that happens we'll be forced to buy electricity on the open market -- with the same results we're now feeling from natural gas being market-priced. Even using Burrard, some experts argue, is driving up natural gas prices locally.

The problem in dealing with all this is that there are too many unknowns and the biggest unknown is B.C. Hydro itself. The publicly-owned Crown corporation is being run by the NDP behind closed doors.

"There hasn't been a full public review of Hydro since the mid-1990s -- effectively, B.C. Hydro is now an unregulated monopoly," says B.C. Public Advocacy Centre's Dick Gathercole, a well-qualified and experienced Hydro watchdog.

He should know, because Gathercole and others fought a losing battle a few years ago as former premier Glen Clark virtually stripped the B.C. Utilities Commission of its watchdog powers over the utility.

In fact, if B.C. Hydro were a publicly-listed company on the Toronto Stock Exchange, you as a shareholder would have access to much more vital information. You would have current data on such things as export costs and profits, detailed business plans, alternatives to meet growing electricity demand, the state of existing plants, etc. and -- most importantly -- the right to ask questions at the annual shareholders meeting.

As it stands now, Hydro and the provincial government make energy-related decisions that will have a profound impact on your quality of life, but you don't have the basic rights of a public company shareholder.

I think it's time for B.C. Hydro shareholders to insist on those rights -- from both the NDP and the Liberal-government-in-waiting.

This article is from The Province newspaper in Vancouver BC, one of Canada's most popular dailies. Its website is at http://www.vancouverprovince.com.

---END---