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Saturday, October 28, 2006

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?

16 comments:

lynn said...

Excellent, extremely informative piece, Peter. I have printed it off to pass around to our friends.

Sadly, such a dark fairy tale, it has become...with a sleeping Cinderella et al.

Sound like we are being tricked out of the BC Hydro-powered Golden Coach in exchange for a rotten pumpkin.

Hope there's still time for a happy ending.

lynn said...

I would like to add one more thing...there is nothing in these IPP contracts that I have read at least that addresses issues of expansion...how a small power project may become bigger and bigger..eventually taking over our rivers and streams completely.

Also, after the term of the contracts are up (2051), there is always the question as Peter suggests as to who these by then largely foreign companies will decide to sell or export power to. There is no info or details that protect our future rights (those of our children and grandchildren)in this regard. Under NAFTA, as Peter writes we in BC will be completely out of luck... and out of power.

To stand here and take this is absolutely crazy.


The Opposition should be camping out and protesting en masse on the lawns of the legislature, lit candles in hand...until the power literally and metaphorically is put back in the hands of the people of BC.

Peter Dimitrov said...

Hi Lynn & Coyote, thank you for posting the article Coyote, and your kind comments Lynn. It sure was a lot of writing this up...I've tried my best to get the info out. It is now also up at www.bcpolitics.ca --along with a url to a CCPA article by Dr. John Calvert on these matters.

As for your statement Lynn:

The Opposition should be camping out and protesting en masse on the lawns of the legislature, lit candles in hand...until the power literally and metaphorically is put back in the hands of the people of BC.

Indeed true, but more so, we the people are the opposition, and the proposition ...I believe it is we, individually and collectively that must do something ...because I sincerely believe once US energy companies get a hold of those IPPs -and why would they not...we will indeed freeze in the dark like mushrooms. Imagine another British Columbia...we can, you know...i see you & Coyote, and G'West and others doing that.

Peter Dimitrov said...

An excellent power point presentation on the problem with El Pirates and the IPPs is at:

http://www.bcpolitics.ca/urgentappeals.htm

Larry Gambone said...

I feel sick reading this. They are really pushing us up against the wall aren't they? If the people of BC don't do something about this our the only hope left will be the global situation, that is the decline of the US empire and Peak Oil. But I for one do not want to wait around for that...

lynn said...

I agree, larry, hard to escape a sick sinking feeling when you read all this. Absolutely right, Peter, we, the people must be the ultimate Opposition.

It triggered my memory of that Citizen's for Public Power class action lawsuit against the provincial government that I remembered signing a few years back...I wondered what had happened to it so I googled it and have provided the link to the update here.

Apparently, the ever-cunning BC Lib government brought in legislation to hamstring the court action... now whether this was Bill 30 or some other piece of legislation, I am not sure.

Anyway, according to this update as of (June 2006) they have decided to fight this in the court of public opinion, rather than in the law courts:


http://www.citizensforpublicpower.ca/temp/lawsuit/index.shtml


I think this forum (or perhaps the other one would be better) would be a good place to discuss and brainstorm for some original, imaginative, and effective action rather than the usual and "expected" petition route, lawns of the ledg. protest etc. ( though they certainly could be part of the strategy).

g west said...

You may be right - about where we ought to be discussing this - at least until we've found an approach or a strategy we can use and follow - there is some sense that some of these things need to be - at least in the early and planning stages - done behind a curtain of privacy.

Maybe Free Columbians, or another group which we could create specifically for that purpose, would be a good idea.

Some of what I may be able to contribute just can't be done in the open.

Suggestions and thoughts?

Excellent piece Peter, by the way. These kleptocrats are convinced they can get away with selling this province to the highest bidder and they must be stopped - or at the very least exposed so that this kind of thing stops and can be (hopefully) reversed.

Peter Dimitrov said...

both Lynn and G'West alluded to :

You may be right - about where we ought to be discussing this - at least until we've found an approach or a strategy we can use and follow - there is some sense that some of these things need to be - at least in the early and planning stages - done behind a curtain of privacy.

...where is that place/time...

lynn said...

It seems a few of us here at least think the other site may be more appropriate for discussion in this regard. (Peter, that would be the first site that Coyote would have notified you about..if you're unclear about where that is... I'm sure Coyote would help you get there).

Would be great if others weighed in as well regarding suggestions as to how to proceed from here.

Anonymous said...

I think the attention that is (probably increasingly) focused on the way this government does (has done) business relative to BC Rail/Roberts Bank/CN/Omni trax deals (as revealed in the BASI/VIRK/BASI affair) is going to provide a unique opportunity to begin to shine some light on the Hydro sellout.

Would anyone be surprised if the same players/methods had been used?

The Opposition seems paralyzed so the research and planning is going to have to go ahead irrespective of what (if anything) they ever decide to say.

Obviously, information from the inside is vital to this. If anyone out there has contacts within the bureaucracy or in Hydro itself that would be a place to start.


And, someone has to take a leadership role and set up a method and location where this information can be collected, analyzed and developed into a strategy.

kootcoot said...

"The Opposition seems paralyzed so the research and planning is going to have to go ahead irrespective of what (if anything) they ever decide to say."

There is an Opposition? That's news to me.

This is absolutely disgusting, but not surprising. I live in the Kootenays and as soon as the billing was shifted to Accenture (let's not forget that they are actually Andersen Accounting of Enron fame, under a new name, for obvious reasons), people in my area started having billing disputes and power arbitrily cut off, with no one to even speak to within 100s of kms. You're not necessarily in good standing unless you're paid up well in advance, by their estimate of your usage. The meter reader virtually looks ashamed to come by once every few months.

Mexico was too smart to sign on to some of the really exploitive parts of NAFTA regarding energy, like the inability of Canada to reduce energy exports without reducing domestic usage. As the Irish Minister of Trade pointed out to a Canadian at the time - "You guys will be freezing in the dark so they can run blow dryers in Arizona."

In my part of the world when will it become "economical" to flood whole towns again, but larger towns than Nakusp, to increase the size of say - Kootenay Lake - dam the whole damn valley where they put in the Diversion a few years back. After all the Americans are powerful thirsty and their hair is damp.

kootcoot said...

btw, you've all probably heard about the BCLiarbral convention at Penticton this weekend. Gordo the (un)Great is setting his sights at outdoing WAC's term in office. BC would look like Afghanistan after 20 years of this criminal organization.

BC Mary said...

Platonic Power Corporation ... anybody understand how the heck they happened along, starting to give away our rivers?

kootcoot said...

"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/gigawatt hour to $87/gigwatt 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."

Megawatt or GigaWatt, there is a substantial difference and there is obviously a mistake in the above. Such mistakes need to be corrected or they cast doubt on the facts of the situation. I don't know which it is, but Peter or Coyote, look into it and please rectify! $1.08 to $87.00 per same unit is a massive increase. $1.08 per megawatt to $87.00 per gigawatt is actually a price reduction. Let's decide on the correct unit and stay with the same unit.

Peter Dimitrov said...

Correction:
NOTICE OF CORRECTION;

From $1.08/gigawatt hour to $87/gigwatt hour ...should read :

From $1.08/megawatt hour to $87/megawatt hour

So it is an huge increase that BC Hydro will be paying for power from IPP's ..which cost will be passed on to consumers.

Coyote said...

Thank you folks, for pointing out the errors in this article to me. I believe they have all been corrected.

Doh!