B.C. Hydro Losing $180 Million To Private Power Contracts This Spring!
B.C. Hydro will purchase 802 GWh in April 2012, 1,018 GWh in May, and 1,087 GWh in June from IPPs at an average cost of about $68/MWh. During the same three-month period, the average price to purchase power on the open market is approximately $10.
VICTORIA – B.C. Liberal energy policies that forced B.C. Hydro to sign lucrative contracts with private-sector power producers will result in losses of $180 million during the spring melt season, says New Democrat energy critic John Horgan.
Horgan highlighted a submission from B.C. Hydro to the B.C. Utilities Commission outlining the cost of independent power production compared to the value of the electricity on the open market.
“These documents lay out in black and white what the opposition and others concerned with the Liberals’ private power agenda have been saying for years. The contracts the Liberals sought with IPPs are expensive, unnecessary, and outrageous,” said Horgan.
The document shows B.C. Hydro will purchase 802 GWh in April 2012, 1,018 GWh in May, and 1,087 GWh in June from IPPs at an average cost of about $68/MWh. During the same three-month period, the average price to purchase power on the open market is approximately $10.
“We’re buying at $68 when the electricity is only worth $10. With the massive volume of electricity we’re buying at those prices, it adds up to about $180 million that B.C. Hydro is overpaying in just a three month period” said Horgan.
Horgan raised the issue in question period Thursday while continuing to draw attention to the fact that on May 9, B.C. Hydro had to spill water over the publicly owned Peace Canyon dam because there was a glut of electricity in the system.
“B.C. Hydro had no choice but to spill more than 800 million cubic feet of water over the dam because they had to fulfill the contracts with private producers.
“This is exactly the situation Adrian Dix and B.C.’s New Democrats have been raising for many years. The Liberals are putting their friends’ business interests ahead of the public interest. The result is rate increases of 36 per cent over five years, with more to come,” said Horgan.
To cover up this mismanagement, the BC Liberals shut down BC Utilities Commission hearings which was supposed to delve into rising rates and deferral accounts which have built up billions in debt.
John Cummins, Leader of British Columbia’s Conservatives, called on the Liberal government to allow the BC Utilities Commission to hold the cancelled hearings into BC Hydro’s operations including the extensive and growing use of deferral accounts.
“Using misleading deferral accounts the Liberals have made it look like BC Hydro has big profits, when the opposite is true,” said Cummins. “They shut down the BCUC hearings before deferral accounts could be examined. BC Hydro racked up nearly $2.2 billion in deferral accounts by hiding expenses – which means they can declare higher profits, and pay the government much higher dividends. BC Hydro is one of our province’s greatest assets and the Liberals are stripping it bare and they are jacking up our rates to pay for it. Liberal mismanagement is running Hydro into the ground.”
This is just the tip of the iceberg – in five years BC Hydro’s deferral accounts are projected to hit $5 billion. The Auditor General has said that “There does not appear to be a plan to reduce the balance of these accounts, let alone halt their growth.” That bill has to be paid sometime, and when it does it will mean higher rates for homeowners and small businesses.”
