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NEWS RELEASE · 7th December 2010
BC First
BC Hydro’s plan to seek a 55% increase in domestic hydro electricity rates over the next 3-5 years from the BC Utilities Commission for “badly needed projects” is part of a continuing trend to bankrupt the crown corporation, says BC First party spokesman, Chris Delaney.

Delaney says BC Hydro has been engaging in a plan of reckless and deliberate financial mismanagement that is designed to severely diminish the value of BC’s “crown jewel” in order to sell it off to foreign interest. He says the evidence for this is found in the creation of Independent Power Projects (IPPs) with private companies whereby BC Hydro is tied to contracts that guarantee a rate that is double the market rate – resulting in taxpayers subsidizing corporate giants like General Electric in the United States.

“It is unbelievable. We are actually paying twice to prop up the failed “Run of River” model. First, by guaranteeing an unsustainable rate for power that is twice what the market will pay us. And second, by allowing private, mostly foreign owned companies to produce power at twelve times the cost we can produce it ourselves,” said Delaney.

Delaney says prior to the BC Liberals forming government, BC Hydro generated billions of dollars to the provincial treasury that was used by government to help fund a number of objectives such as health care, education, roads, and infrastructure. He says since the BC Liberals took over with promises to make BC Hydro more efficient, the reverse has happened.

“BC Hydro today has become a net importer of power, resulting in massive cost overruns that must now be paid by consumers. But it is the result of mismanagement, not market forces,” said Delaney.

BC First Economics Advisor Erik Andersen says that since 2006, BC Hydro has embarked on massive infrastructure costs totaling $6 billion, representing a 44% increase. But total domestic consumption of hydroelectric power decreased by 4.2% while rates increased by 18.3%. “This is a result of the creation of a special ‘Regulatory Asset Account’ that allows BC Hydro to spend money now that it anticipates it will receive from future rate increases.”

“They have embarked on a deliberate, systemic plan to spend beyond their ability to pay, which will result in either dramatic increases in rates and/or bankruptcy as consumers refuse or are unable to support the excessive spending,” said Andersen.

Andersen says the argument that BC Hydro’s infrastructure had been inadequately maintained and allowed to reach a critical state of disrepair does not explain the decision to increase expenditures beyond the capacity of the corporation or consumers to support it.

“Only complete fools would engage in such a financial vector, or people forced to act contrary to the best interests of British Columbia by a government that mandated ‘take or pay’ contracts for IPPs. Since the people running BC Hydro are highly educated professionals, only the latter reason stands up under scrutiny,” said Andersen.

Watch a video on the mismanagement of BC Hydro with Erik Anderson HERE.

Delaney says the BC Government is engaged in an extremely dangerous game of chicken designed to force BC consumers into a corner where the only way out will be to sell BC Hydro. “The devaluation of BC Hydro that will result from such incompetent management practices will ensure a ready buyer, most likely a multinational from the United States or Europe.”

BC First is committed to restoring BC Hydro as a fully publicly owned crown corporation, and to expanding its mandate to include the development, management and distribution of new forms of energy.
And again!!!!!
Comment by James Ippel on 14th December 2010
Maybe if the naysayers weren't so damned 0pposed to Site C, BC Hydro wouldn't have to go with IPP Corporations.

Hydro has the capability to supply all of BC's needs thru Site C, but will you agree to them going ahead and developing it without a long drawn out bunch of . . . . . .
BC Hydro
Comment by Andy on 9th December 2010
Shawn, it is not BC Hydro making the rules. It is the Corporate Liberal govt that mandated what Hydro was to pay the IPPs and they also blocked BC Hydro in developing their own competing IPPs even tho Hydro has a pretty good record of producing power in this province. The Liberal Corporations are going to get rich at the citizens expense....sorry....
Nobody is blaming the IPP's
Comment by Helmut Giesbrecht on 9th December 2010
This is about irresponsible financial management of BC Hydro and political interference. How can you blame IPP's who see an opportunity to maximize their profits, and reduce investment risks by fleecing taxpayers. All sanctioned by rules set by BC Hydro and directed by the provincial government. You know the saying. " A fool and his money are soon parted", except this time it is the province fools forcing the partition of the taxpayer from his money.

All setting the stage for the master plan. Read John Calvert's book Liquid Gold.
Don't blame IPPs
Comment by Shawn ksisiiaks on 9th December 2010
I'll put this a simple analogy.

You are entering the workforce. You have been to school and emassed large debt to position yourself. You submit your resume, get offered a contact for the next 40 years. But you have to sign for a fixed wage. How much would you ask for? How much contingency would you need to build into it?

Don't blame IPPs, BC hydro is the one making the rules.
Right on Barry!
Comment by Helmut Giesbrecht on 8th December 2010
BC Hydro is marked for privatization or at the very least, to make it an insignificant force in keeping hydro costs down for BC residents. All these long term contracts with Independent Power Companies (IPP) to purchase their power at inflated costs and then selling it for less are designed to bankrupt BC Hydro and pave the way for a claim that it is debt ridden and a burden on the taxpayer.

The IPP corporations are gleefully counting their profits.

Another BC LIberal government will see the end of BC Hydro as we know it. Of course they will promise not to sell it before the election.
Here we go again
Comment by Barry English on 8th December 2010
This is exactly what happened with BC Rail. The company deliberately made poor financial decisions, and the BC Liberal government deliberately lied to the Legislature and the people of British Columbia saying that it was losing too much money, and had to be sold. BS. BC Rail was sold, for peanuts (tax deductible) and our government spent millions of dollars keeping the facts away from the people.

The same thing is happening with BC Ferries. Prices have been raised to the point that ridership is down severely, and the company is losing money. Of course, because the government has changed the rules so that BC Ferries are no longer accountable to the people we have no way of knowing just how bad things are there, but it will be on the chopping block soon.

BC Hydro is going the same way, and blame for this can be put squarely on the backs of BC Liberal government policies. This government has damaged the province so badly that we may never recover completely. However, maybe a new government can take lessons from Gordon Campbell, and break some of these disastrous contracts. I certainly hope so, and the sooner the better.