BY JOHN HORGAN, SPECIAL TO TIMES COLONIST DECEMBER 10, 2010
Most of us don't spend much time thinking about where our electricity comes from or the policies and politics behind it. We just flick on the switch and there is light; we turn on the tap and there's hot water. However, in light of the recent announcement that B.C. Hydro plans to raise your rates by 50 per cent over five years, perhaps we should all be taking a closer look.
British Columbians are fortunate to have an abundance of natural resources, including our access to clean, reliable electricity. Ninety-three per cent of the province's electricity comes from hydro, an enviable position in an emerging carbon-constrained economy.
But how much longer will we be able to maintain that position?
Ratepayers expect decisions involving B.C. Hydro will be made in the public interest. Unfortunately, energy legislation forced through last spring without meaningful debate is based on an ideologically driven agenda.
Current energy policy prohibits B.C. Hydro from building new capacity, forcing the Crown agency to purchase power from private for-profit companies at inflated prices. The policy also prohibits B.C. Hydro from relying on the ability to purchase electricity on the open market, yet unrealistically counts on selling power to those same markets at premium rates no one is willing to pay.
Most troubling, the policy centralizes decision-making with politicians in the cabinet and cuts the independent experts at the B.C. Utilities Commission out of the loop.
The release of B.C. Hydro's second quarterly report in November shows some troubling results. For example, purchases from independent power producers shot up 79 per cent over the same quarter last year, demonstrating that the Liberals' private power agenda is being realized.
This trend is troubling, particularly when you look at the cost of purchasing that private power.
B.C. Hydro pegs the average price it pays for private power at $124/MWh, but sells that power for much less. Residential customers pay just $72/MWh; large industrial users pay about $40/MWh; and on the open export market the average peak price during the second quarter was only $38/MWh.
The Joint Industry Electricity Steering Committee, representing B.C. Hydro's largest industrial customers, estimates the Crown corporation is losing $450 million annually in power sales transactions.
Since the legislature closed in June there have been three different energy ministers and Premier Gordon Campbell has resigned. This kind of instability is not good for British Columbians or B.C. Hydro.
My colleagues and I have been calling on the government to regain control of B.C. Hydro's weakening financial position by reviewing the private agreements and ensuring that all British Columbians continue to benefit from a strong public utility.
The government should put a moratorium on new independent power projects, review the contract to privatize back-office support at B.C. Hydro, and make changes to the Clean Energy Act, including restoring the strong, independent role of the B.C. Utilities Commission to ensure the best interests of all British Columbians are served.
Four main principles should guide energy policy: Put conservation and environmental protection first; maximize the public benefit by encouraging community-based energy solutions that create jobs, economic development and revenue for social programs; keep a strong B.C. Hydro at the centre of renewable energy development and generation; and keep rates affordable for both industry and consumers.
The government's policies are on course to run B.C. Hydro into the ground while ratepayers suffer under double-digit rate increases on their hydro bills. It's a lose-lose situation.
John Horgan is the MLA for Juan de Fuca and the New Democrat energy critic.
