Tricked and Treated: The Case of Modern Day Piracy involving British Columbia hydroelectricity and water
© Peter Dimitrov, October 27, 2006/ bcpolitics.ca
Folks, this is an article I would rather not write. Indeed I would rather enjoy Halloween, the trick-n’ treating, attending parties, the joking around, and watching the fireworks that accompanies this time of year. But it is not to be. The story that unfolds herein ought to be sufficient to ‘scare your socks off’, to cause you to demand answers, leap in to action. If you have any concern for the welfare of your children and grandchildren – please read this, pass it around, get very active.
Here then, in short, is the ‘skinny’ on what is happening with our rivers and your electricity!
1. Campbell soup & company (hereinafter the “Pirates”) have split up what was once an integrated BC Hydro company, a company that produced electricity, transported it over its own power transmission lines, and then sold it to us residential, business and industrial consumers at the fairest price in the land.
2. A good part of BC Hydro was sold by the Pirates to Accenture (enough said about that which you can Google yourself), which now operates in British Columbia, although strangely you won’t see their names on the hydro service trucks.
3. The Transmission resources were ‘split away’ from the Crown corporation to form a separate Transmission Company, the BC Transmission Corporation.
4. Under the BC Energy Plan, BC Hydro is no longer permitted to build/construct new hydro-electric generating facilities, it has been compelled to purchase our future electrical supply from “Independent Power Producers” (IPPs)
5. According to the BC Hydro web site there are presently 14 different IPP hydro projects on various river/creek systems in British Columbia, still under construction, some near completion.
6. The price which these IPPs pay government for a “small” water license is $5,000, for a term of 40 years, renewable for another 40 years, but likely renewable in perpetuity. In addition to the water license to have water reserved to produce hydroelectricity, they get some land along the site to build the powerhouse,etc.
7. Once an Energy Purchase agreement is signed between BC Hydro and an IPP, the IPP then waltzes to the bank and with that secure contract is able to negotiate very favourable lending rates from the bank to build the project.
8. Unlike oil & gas, where royalty rates are established relative to the market price of those commodities, the royalty rates to be received by the Province from the water licenses granted are not tied into the potential market price that will be paid to the IPP from the sales of the hydroelectricity.
9. A $5, 000 water license (for a small hydro project) will potentially generate between $10- $15 million/year in revenue for the IPP, and while there are some minor fees to be paid annually ($200/year ) by the IPP, the province will see a return of only 4-5% of the $10-$15 million. For a water license costing $10,000, much larger IPP projects can be built, where the payoff per year for the IPP could be $100 million plus/year, and yet due to low royalty rates the Province will only see 4-5% of that $100 plus million.
10. Up until now, the average price per megawatt (million watts) that BC Hydro pays for electricity is about $1.08 per Megawatt hour, which cost is passed on to you the consumer.
11. BC Hydro has signed ‘energy purchase agreements’ with the IPPs listed on its website, which require BC Hydro to pay them approximately, $16 billion dollars for that electricity. The average cost to BC Hydro for that power will be $87.00 per Megawatt hour. These contracts will kick in during the 2009/2010 and are payable each year to 2051. Guess who will be paying for that? From $1.08/Megawatt hour to $87/Megawatt hour is an astronomical increase –guess who will reap the profits from those energy purchase agreements – if you guess IPP’s and the banks (the pigs at the trough) you guessed right.
12. It gets worse, the scenario exists, that several, if not all of the IPP’s will ‘flip’ their water license and hydro project to a larger energy company, likely American, (the “mega pigs”) and voila, us, lambs for the slaughter will have lost control of our new ‘green’ energy, and the ‘water’ in our rivers/creeks to Uncle Sam forever – under NAFTA.
13. The IPP’s, or their new American owners, will want to export as much as that power to USA, as likely the market price is higher, and if we can’t pony up the cash or refuse to, well we can just sit coldly in the dark like mushrooms.
14. Then there is Bill 30. Once upon a time municipalities, and regional districts in rural BC, had the zoning authority over rivers/creeks in their territory. They had the power to deny an IPPs application to build a hydro project. Well folks that is gone. Witness, the Ashlu Creek IPP project in the Squamish area now being constructed by Ledcor Power Inc.
15. Prior to Bill 30, passed by the Pirates (soup & co.), the duly elected folks up in the Squamish area, which included the mayor of Whistler, twice denied Ledcor Power’s zoning application. What happened next, is speculative, but “words must have gotten back to El Pirates that the ‘lambs for the slaughter’ where acting uppity out in the country and the lambs needed to be herded in, hence – dutifully, we have Bill 30.
16. Indeed, Bill 30 takes away all powers that municipalities and regional districts had to decide zoning matters respecting IPP hydropower products.
There you have it, a true to life Halloween story of how El Pirates ‘treated’ their pigs at the Victoria animal farm, and once again ‘tricked’ the ‘lambs for the slaughter’.
In the meantime Cinderella and her urbane democratic friends were reputedly funning it up quietly at a nice Victoria tea party, ruffling no feathers in case El Pirates and the pigs would notice. As for the journalistas, they seemed too taken up with El Pirates and the dazzling fire works to report these happenings in the propaganda fed to the lambs for the slaughter.
Indeed, it could have been another Halloween. Imagine, BC Hydro, a co-operative owned by the people of BC, building green hydro and wind projects, owned, controlled and for the public benefit of the people of British Columbia. The profits from the sale of that power flow not to the majority shareholders of the IPPs or the banks, but to the people of BC, who democratically decide how to use that money to develop this province, their communities, their regions, so as to reduce inequality, and improve services to the people of this province, and commence the long road to regain our dignity, our sovereignty, indeed, the long road to build a civilized economy, a democratized economy, with new rules.
As for Cinderella, El Pirates, and the pigs, one has to wonder for how long the ‘lambs” will put up with that tea party?