Brace for a Hydro Shock

John Calvert | Image: Jeremy Bruneel | Published: October 01, 2007 Big Ideas

While the B.C. government is extensively promoting the benefits of its “green” private power agenda, BC Hydro customers – including businesses across the province – should get ready for a major sticker shock in the coming years. The era of cheap, publicly owned hydro is rapidly coming to an end.

The B.C. government is transforming the province’s electricity system from one owned and controlled by the public through BC Hydro to one shaped by private energy developers and U.S.-based multinational energy corporations. Rejecting all the evidence that W.A.C. Bennett’s legacy of publicly owned electricity has kept prices down, provided energy security for the province and given B.C. a major competitive advantage, the government has arbitrarily banned new investment by BC Hydro in electricity- generating facilities. This policy forces the Crown corporation to buy energy from private interests through long-term contracts at prices almost double those of other options.

While private power developers are cashing in on lucrative energy-supply contracts from BC Hydro, the government is not telling B.C. businesses that they will be providing the revenue stream, through their electricity bills, that is now enriching the private energy industry. Despite the enormous sums of money BC Hydro customers will pay, from now on the public will get no asset ownership, no long-term energy security and no price protection once these expensive contracts expire. Yet despite the magnitude of these changes, there has been virtually no public debate about the government’s energy policy. It is time for a wake-up call.

We have virtually the lowest hydro rates in North America precisely because we are paying prices based on the cost of public investments made during the 1960s and 1970s. But the government is guaranteeing that the future will be quite different. The 2002 BC Energy Plan (revised in spring 2007) is transforming BC Hydro from a generator of publicly owned electricity to a purchaser of energy from private power producers.

To stimulate the growth of private power, the government is claiming the province faces a looming energy crisis. Simultaneously, through the Energy Plan, it has consciously narrowed the options for dealing with this “crisis” so that private developers are virtually the only ones permitted to meet the province’s future energy needs.

Underlying the private-power energy gold rush is the fact that the government is virtually giving away our water and wind resources. The maximum fee for a water-for-power licence is only $10,000, even though it may generate millions or tens of millions of dollars annually. More than 500 private water-for-power licences (or applications for licences) have been registered on a first-come, first-served basis by private power developers, most since 2001 (visit ippwatch.info for details). These include all the most accessible, and most profitable, sites in

B.C. Incredibly, there is no effective restriction on foreign ownership, and, through Bill 40, the government has eliminated restrictions on the export of private energy. The same is true of wind-farm developments, where the government is not only giving huge tracts of land to developers, but has structured the land tenure fees and energy revenues in such a way that the public will get almost no financial benefit for decades into the future.

Does B.C. have better options for the additional energy it may need in the future? The answer is clear: it does. First, the province has 1,200 megawatts of energy (4,300 gigawatt-hours) from the Columbia River Treaty owed to us by the U.S. The government now sells this to the U.S. for far less than what it is paying private power developers in B.C. It should bring this energy back. It could re-power the Burrard natural-gas facility, which provides 950 megawatts of peak power to the Lower Mainland when we need it. It could restrict private energy exports. It could explore whether Site C, with its more than 4,000 megawatts of potential capacity, should be built rather than damming up hundreds of pristine streams. It could lift the ban on BC Hydro building its own new energy facilities – the very approach that currently provides us with such affordable and secure supplies of energy. Finally, it could further expand its Power Smart energy conservation program.

All these options underscore the basic point that a real debate about energy policy is long overdue.

John Calvert is an associate professor at SFU, was a member of the 2005 BC Hydro Provincial Integrated Electricity Planning Committee, and is a director of BC Citizens for Public Power.

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