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BC’s Utilities Commission Blocks Climate Goals, Say Enviro Groups

June 28, 2021

BC’s Utilities Commission Blocks Climate Goals, Say Enviro Groups

The regulator of BC Hydro needs a new ‘energy justice’ mandate, province told.

GeorgeHeyman.jpg
Environment and Climate Change Strategy Minister George Heyman received a letter from seven organizations focused on energy, equity and the climate crisis urging a reset for BC’s utilities regulator, which they call a ‘barrier’ to needed change. Photo: BC government Flickr.

Advocacy groups are encouraging the British Columbia government to overhaul the commission that regulates BC Hydro and other utilities so that it can better support a transition to cleaner energy and other provincial goals.

With processes coming early next year that will determine energy policy for years into the future, widening the B.C. Utilities Commission’s mandate needs to happen soon, the seven groups say.

“The BCUC now makes its decisions in largely the same way it has since its inception,” said Dylan Heerema, the policy and research lead on community energy for one of the groups, Ecotrust Canada. “It tries to keep rates as low as possible and tries to maximize the economic efficiency of the utilities’ operations across all of the ratepayers.”

That mandate made sense 50 years ago amid concerns that utilities would take advantage of their monopolies to make rates unfairly high, he said, but now that economic lens has become a “significant barrier” to needed change.

Ecotrust and the other groups sent a June 17 letter to B.C. Energy, Mines and Low Carbon Innovation Minister Bruce Ralston and Environment and Climate Change Strategy Minister George Heyman. In it they argued changes need to be made before 2022 when the BCUC will consider BC Hydro’s Integrated Resource Plan as well as the utility’s Rate Design Application.

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BC Hydro Bets on Interest Rates — and Loses $1 Billion

October 8, 2020

BC Hydro Bets on Interest Rates — and Loses $1 Billion

A hedging program was supposed to protect the corporation from rising rates. Instead, it’s creating major liabilities.

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The Peace River was dammed and sent through these diversion tunnels this week to allow work on Site C to continue in the dry riverbed. Photo via BC Hydro.

Critics are calling it another BC Hydro scandal. The Crown corporation, already beset by burgeoning costs and geotechnical difficulties at the controversial Site C dam, has racked up $1 billion of liabilities betting on interest rates.

BC Hydro revealed the losses in its first-quarter report, released in June.

Marc Eliesen, former CEO of BC Hydro and Ontario Hydro, said the corporation’s gamble that it could predict future interest rates has backfired. “BC Hydro took a trip to the casino and played roulette and lost big time,” he said.

The interest rate hedging program began in 2016 with the goal of protecting ratepayers from higher future borrowing costs if rates rose.

Under the program, BC Hydro bought investment vehicles that would increase in value if interest rates rose. The corporation’s managers believed the profits could be used to offset higher borrowing costs if, as they predicted, interest rates went up.

“They thought they would make money on interest rate hedges and put it in a default account which would help offset borrowing costs in the future,” explained Richard McCandless, a former civil servant who wrote about the loss on his blog.

Instead, interest rates fell, and BC Hydro has lost money on the hedging program.

“It is a scandal,” said McCandless. “They took a gamble and lost.”

BC Hydro, which carries $23.3 billion in debt, anticipates the need to borrow another $10 billion between 2017 and 2024, partly to pay for the over-budget Site C dam and about $2 billion a year in other capital projects.

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The Quake Threat to Dams Posed by Fracking Was Long Warned

January 11, 2020

The Quake Threat to Dams Posed by Fracking Was Long Warned

A new trove of internal exchanges shaken loose by Ben Parfitt amplifies decades of safety urgings.

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A ‘shake map’ shows a magnitude 4.5 earthquake that hit northern BC late in 2018, likely caused by fluid injection. The map was created by Gail Atkinson, an expert who called for ‘no frack zones’ around dams. Illustration created by Gail Atkinson. Additional labels by The Tyee.

“Why is this so difficult?” a BC Hydro dam safety engineer plaintively asked his superiors seven years ago.

He’d been stymied again in proposing that because the risks of earthquakes caused by fracking were clear, preventing disaster required creating “no frack” zones around dams.

His sense of urgency runs through a long thread of discussions within BC Hydro and the Oil and Gas Commission surfaced by investigative researcher Ben Parfitt.

For years now the two crown agencies have been reluctant to publicly talk about the risks earthquakes triggered by the oil and gas industry pose to critical dam infrastructure throughout northeastern B.C.

But a freedom of information request by Parfitt at the Canadian Centre for Policy Alternatives has shed new light on what has been a long and often acrimonious internal debate.

Hundreds of emails, letters, memos and meeting notes released by the utility in response to Parfitt’s request and his just published investigationmake the following important revelations:

Officials at BC Hydro have been concerned about the shale gas industry since 2007 when coal bed methane extraction resulted in seismic activity at the Peace Canyon Dam near Hudson Hope. 

The Peace Canyon Dam, which provides six per cent of the province’s electricity, is built on fragile shale rock and wasn’t built to withstand even modest earthquakes.

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Premier Clark on ‘Historic Debt Binge,’ Says Conservative Leader

September 24, 2016

Premier Clark on ‘Historic Debt Binge,’ Says Conservative Leader

‘Debt-free BC’ 2013 campaign promise called unrealistic, simplistic.

Premier Christy Clark
Clark promised LNG revenue would mean ‘debt-free BC.’ Instead, debt up 45 per cent during her tenure. David P. Ball

Premier Christy Clark won the provincial election in 2013 promising a “Debt-Free BC,” but an opponent now accuses her of overseeing a “historic debt binge” since coming to office.

Dan Brooks, who won back the BC Conservative Party leadership on Sept. 17 after stepping down earlier this year, said in a press release that last week’s first quarterly report shows the province’s total debt has grown by 45 per cent — $20.1 billion — under Clark.

Total provincial debt was around $45.2 billion when Clark took office in 2011 and has swollen to $65.3 billion, according to the quarterly report. It is projected to hit $71.9 billion in 2019.

The total debt includes accumulated operating deficits from past years as well as borrowing for any number of purposes, including building schools, hospitals, social housing and public transit. It also includes “self-supported debt” such as that carried by Crown corporations including BC Hydro.

Finance Minister Mike de Jong, commenting on the quarterly report, highlighted the operating surpluses that mean the province has stopped adding to the operating debt. He also pointed out that taxpayer-supported debt has been dropping when expressed as a percentage of the province’s Gross Domestic Product and is lower than in most provinces.

Brooks was unavailable Tuesday, but in the press release said: “From the moment she first took office in 2011, Christy Clark has been spending taxpayers’ dollars in a misguided, reckless manner… If somehow she is able to secure another four-year mandate in 2017, there can be little doubt that the BC Liberals will perceive it as permission to leave an even larger legacy of debt for future generations.”

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Gov’t Using Misleading Accounting at BC Hydro, Charges Dix

April 20, 2016

Gov’t Using Misleading Accounting at BC Hydro, Charges Dix

Minister counters that ‘rate-smoothing’ accounts make sense due to 10-year plan for rate increases.

Mt Seymour powerlines

BC Hydro transmission tower on Mt. Seymour. Photo by agaumont from Your BC: The Tyee’s Photo Pool.

The British Columbia government has chosen to use misleading accounting at BC Hydro to fudge the province’s finances ahead of the 2017 election, charges NDP energy critic Adrian Dix.

“They misled people about the state of B.C.’s finances, and they misled people about the state of BC Hydro’s finances,” said Dix, the MLA for Vancouver-Kingsway, in an interview. “This will affect every single person in the province.”

In particular, he said, the government is using “rate smoothing” or “rate stabilization” accounts to move up about $1 billion in revenue that the Crown utility won’t actually receive from ratepayers until after 2021 so that it is included as income for earlier years.

The accounting trick lets the government continue to take money out of the utility to help balance its own books, Dix said.

“We’re borrowing against nothing here,” he said. “This is a pure attempt to mislead people about the state of the province’s finances.”

A table from a March 30 BC Hydro presentation shows the practice peaks in 2017, which happens to be the same year as the next provincial election.

That year, BC Hydro will draw down $250 million from a rate-smoothing account, money that it doesn’t plan to finish repaying until 2024.

For context, the provincial government has budgeted an overall surplus of $287 million in 2017-2018, which in part depends on receiving $706 million from BC Hydro.

The rate-smoothing money is therefore more than one-third of the amount the government plans to take from the utility in the election year.

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As Hydro Rates Climb, an Idea to Reduce Bills for Low-income Folks

February 27, 2016

As Hydro Rates Climb, an Idea to Reduce Bills for Low-income Folks 

Advocates pitch affordability program, but minister insists rates are modest.

Fist-Paper

‘Most other jurisdictions in North America have bill affordability programs. We don’t.’ Bill photo via Shutterstock.

With electricity rates continuing to spiral upwards, an advocacy organization is pushing to have BC Hydro adopt measures to make bills more affordable for people surviving on low incomes.

“Most other jurisdictions in North America have bill affordability programs,” said Sarah Khan, a lawyer with the British Columbia Public Interest Advocacy Centre. “We don’t.”

Confirmation of the latest BC Hydro rate hike came Friday when president and CEO Jessica McDonald said the Crown utility is seeking to raise rates by four per cent on April 1, consistent with a 10-year plan set out in 2013.

BC Hydro rates have gone up by 50 per cent over the past 10 years and they are scheduled to go up another 11 per cent over the next three years, Khan said.

They’ll rise even further when the $10-billion Site C dam is completed on the Peace River and customers start paying for it, she said.

Meanwhile, the provincial minimum wage and welfare rates haven’t kept up while the cost of living has become more expensive, leaving many struggling to pay their bills, Khan said.

The advocacy centre has a proposal to make bills more affordable for some 170,000 families in B.C. who live below the low-income cut-offs set by Statistics Canada, around $32,000 a year for a family of four depending on what size community they live in.

On behalf of seven anti-poverty and seniors’ groups, the centre plans to submit the proposal in April as part of BC Hydro’s ongoing rate design review in front of the B.C. Utilities Commission. Launched by the provincial government, the review’s mandate includes evaluating the current rate structures to ensure they are fair.

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Site C Is a Climate-Change Disaster, Says Suzuki

February 24, 2016

Site C Is a Climate-Change Disaster, Says Suzuki

‘We have to rethink everything’ says noted environmentalist. A Tyee Q&A.

David Suzuki at Site C announcement

David Suzuki and Grand Chief Stewart Phillip at a media scrum outside the B.C. Superior Court Monday morning. Photo by Mychaylo Prystupa.

Flooding valuable farmland to build the Site C dam undermines Canada’s commitment to meet international climate-change targets, environmentalist David Suzuki said outside a B.C. courtroom this week.

The farmland is needed to reduce B.C.’s dependence on imported foods, Suzuki said, and eliminate the huge amounts of carbon fuels needed to bring those foods here.

“It seems to me crazy to put farmland in the north underwater,” he said. “We live in a food chain now in which food grows on average 3,000 kilometres from where it’s consumed. The transport of all that food is dependent on fossil fuels.

“Food has got to be grown much closer to where it’s going to be consumed,” he said.

Instead of building dams and pipelines, Canada should “massively encourage” wind, solar and geothermal energy projects and put a stiff price on carbon emissions, he said.

Suzuki joined Grand Chief Stewart Phillip, head of the Union of B.C. Indian Chiefs, at a news conference on the steps of B.C. Supreme Court just before the latest battle over the Site C hydroelectric project began inside.

BC Hydro is seeking an injunction to prevent protesters at the Rocky Mountain Fort camp from “physically interfering” with the construction of Site C. The B.C. government approved the $8.3-billion dam in late 2014.

If completed, Site C would flood about 83 kilometres of the Peace River valley near Hudson’s Hope, much of it fertile land, and generate enough electricity to power 450,000 homes.

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As Site C Breaks Ground, Linked Union Declares Opposition

August 1, 2015

As Site C Breaks Ground, Linked Union Declares Opposition

BCGEU cites First Nation infringement and loss of habitat in motion against controversial dam.

The union representing many British Columbia government workers has taken a position against building the Site C dam, a project some of its members are working on and that other unions support.

“This was a membership driven motion,” said Stephanie Smith, the president of the B.C. Government and Service Employees’ Union. “We have 68,000 members and there is a diversity of interests.”

Smith said the motion was brought forward by the union’s environment committee and passed unanimously. There was no debate even though Smith invited discussion, she said.

A statement from the union said it opposes building the dam because it is not needed, it will cause a loss of habitat, it infringes First Nations’ hunting and fishing rights, productive agricultural lands will be lost and it fails the economic test of “providing a lasting net benefit to British Columbians.”

First proposed some 30 years ago, Site C is to be the third of a series of dams on the Peace River and will flood an 83-kilometre long stretch of the river to generate 1,100 megawatt hours of electricity, enough to power 450,000 homes per year.

The provincial government approved the $8.8-billion BC Hydro project in Dec. 2014 and announced it intended to start construction this summer.

BC Hydro spokesperson Kevin Aquino confirmed project construction has begun, and will ramp up over the summer. ”Security has mobilized to [the] site and some initial clearing activities on the north bank of the dam site area are underway,” he said, adding gates and signage have been installed.

Several First Nations and local landowners have filed lawsuits trying to stop BC Hydro from building the dam.

Publicly owned asset

BCGEU members have been involved in the planning and approval of the project. Within B.C.’s energy and mines ministry, about half a dozen members are currently working on the Site C file, a ministry spokesperson confirmed.

 

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