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Victoria's sloppiness may
import the California syndrome
Editorial
The Vancouver SUN
January 31, 2001
The bad news is that soaring gas prices have caused a lot of consternation in British Columbia The worse news is that electricity costs could well be next. Suppliers simply can't men the huge demand for electricity in North America right now, and energy analysts believe the problem could get worse in the next few years.
British Columbians might not have to worry, about the resulting price increases if - and this is a big if B.C. Hydro has enough water stored behind its dams to meet provincial needs. But it's clear that the utility hasn't planned for a demand crunch by storing a prudently large supply of water for future use. So our public utility, which is supposed to protect us from price fluctuations, may soon have to go either to the spot market to buy electricity at far higher prices than British Columbians are used to paying or else generate a good bit of power from local plants fired by high priced natural gas.
The whole point of a public monopoly is supposed to be to ensure adequate local power at reasonable prices over the long-term. But B.C. Hydro has been hamstrung in this mandate by its masters in Victoria. The New Democrats have been running the Crown corporation as a cash cow, encouraging or allowing it to export huge amounts of power instead of keeping a prudent supply of water in reserve to meet potential demand in the province.
The export arm of the utility Powerex, has under a shroud of secrecy, been exporting electricity to the United States for 12 years. During this time it managed to bring in more than $4 billion in export revenue.
That, in large part, allowed the provincial government to siphon off $2.3 billion in dividend payments from B.C. Hydro over the past decade. As well, the government collected another $3.7 billion in the form of water rental fees and other taxes. And, not satisfied with $6 billion, it also took $50 million from the utility's rate stabilization fund, a rainy-day account that is in place to Help protect consumers from exorbitant price hikes. This means that the company has less money to pay down its $7-billion debt load, to increase local sources of supply or to protect consumers from a price hike.
B.C. Hydro still insists in public statements that it can meet provincial demand without raising prices. But a year ago, in a submission to its regulator, the B.C. Utilities Commission, the company said it won't be able meet our electricity demands without imports from the US.
We don't know which version of the story to believe. Between 1995 and 1999, the utility never made its integrated electricity plan public, so we can't independently verify either of these competing claims: And the picture may not become clear any time soon since Victoria has essentially stopped the Utilities Commission from keeping a close eye on the activities of B.C. Hydro.
But this year, with the snowpack below normal levels and not much more of winter left, we're concerned about B.C. Hydro's ability to generate the electricity we'll need in the next two years. This concern is
well-founded - look at California. There, in the midst of rolling blackouts, consumers are paying sky-high prices, in large part because their utilities have to rely on outside suppliers. If B.C. Hydro is forced to go to the open market to buy electricity, the same thing - possibly even worse could happen here.
To safeguard the interests of all British Colombians, the ratepayers and shareholders of B.C. Hydro, Premier Ujjal Dosanjh should put a damper on willy-nilly exports and make it clear to the utility that provincial needs come first lie should also allow the Utilities Commission to very closely and publicly monitor the company's plans and activities.
Finally, the provincial government should stop taking so much money from the utility, leaving it the resources to pay down its debt, reinvest in new power plants and maintain a reasonable rainy-day fund to protect its customers from future price hikes.
---END---
Letters in response to the Sun's editorial
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Temper power demands
The Jan. 31 editorial, "Electricity price crisis haunts B.C. Hydro," was helpful in alerting consumers to the exposures of our continental energy markets. But it ignored major environmental issuestied directly to these energy challenges, including air pollution and climate change.
The editorial support for more energy supply also neglects the opportunities for efficiency and conservation.
By aggressively developing conservation programs, utilities such as BC Hydro and BC Gas and all levels of government can help us avoid unnecessary environmental conflicts and impacts. At the same time, residential and business consumers can reduce costs by reducing consumption. We would urge much greater focus upon the runaway demand for energy, which drives both the supply-side issues and energy costs.
Continuing the current pattern of unlimited energy use and constantly providing new supply means more air pollution and more climate change impacts, such as the unpredictable precipitation patterns at the root of the editorial concerns. This vicious circle can only be broken when we recognize that there are concrete limits to energy use and production.
GERRY SCOTT
Climate Change Campaign Director
David Suzuki Foundation
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On the money
The Hydro editorial was right on the money (pum intended). There has truly been a shroud of secrecy around Powerex and its actions. This is the trick all governments are doing these days juggling the books - as anyone who heard that vague throne speech from Jean Chretien's Liberals knows. Profits from Hydro go into a different column and Hydro's debts are not reduced.
However, it is worse than that. Powerex has been manipulating the market, which is unfair to the Americans, and we will be paid with our own medicine if we ever have to buy power from them.
COLIN FRAZER
Port Alberni
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Push the pause button on BC Hydro
Compliments to your editors for raising concerns with BC Hydro
("Electricity
price crisis haunts B.C. Hydro", Editorial, Jan
31).
Since the mid '90s, BC Hydro has followed an energy strategy of
meeting most
new demand for electricity by burning natural gas. We became
aware of this
last spring when BC Hydro announced plans to build a pipeline
through Cobble
Hill.
A new power plant in Campbell River is running
now, for which Hydro has
already committed to supply the gas and buy the
electricity, regardless what
happens to gas prices! Another is developing in
Port Alberni; and Duncan
has been mentioned for a third plant. Hence the
need for the Georgia Strait
Crossing (GSX) pipeline. This represents over
$1.2 billion of
infrastructure, in a country with ballistic gas prices, in a
world
threatened with global warming.
The Georgia Strait Crossing
Coalition was formed out of concern with these
apparent inconsistencies. We
recommend a balanced approach to energy. This
includes conservation,
sustainable energy technologies, and better
management of existing
hydroelectric capacity. We can have reliable,
reasonably priced electricity
in BC, but not on the course that BC Hydro is
setting.
Premier Dosanjh
would be wise to push the pause button on Hydro, right now,
and commission an
energy policy review.
Arthur Caldicott, GSX Coalition
Tom Hackney, Sierra Club
Peter Ronald, Georgia Strait Alliance
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