IPP Power Plants Costing BC Ratepayers Billions / Liberal Party Cronyism!

[Gnarcore]

https://thetyee.ca/Analysis/2019/02/14/BC-Ratepayers-Report-Private-Energy-Rip-Off/

 

 

Quote

 

So that New Report on the Huge Private Energy Rip-off of BC Ratepayers?

It’s all that Rafe Mair and Will McMartin warned here years ago.

 

A new independent report commissioned by B.C.’s energy minister concludes BC Hydro ratepayers will shell out at least $16.2 billion over the next two decades to pay for electricity they don’t need.

That’s because the previous BC Liberal government forced the Crown corporation to sign decades-long contracts guaranteeing it would buy overpriced electricity from independent power producers (IPPs), many owned by BC Liberal donors.

The waste will cost each ratepayer about $4,000 over 20 years, for energy that’s out of sync with when it’s needed, because IPP run-of-river operations surge with power during months B.C. is already flush with energy, and not the peak use times at the heights of summer and winter

 

Somewhere up there Rafe Mair is smacking clouds together to make them thunder: “I told you so!”

ell us he did, here in the pages of The Tyee, many times. Here in 2009, for example. And here and here in 2010.

Excerpted from a piece Mair wrote in September 2013 is this:

“We British Columbians are the ongoing and apparently disinterested victims of a world-class deception and it has gone on since 2002 when Gordon Campbell announced British Columbia’s new Energy Plan.

“Let’s start there because that’s where the decade of incredibly stupid policy regarding BC Hydro began. From that moment on BC Hydro wasn’t permitted to bring on new sources of energy, ‘Site C’ excepted. All new power was to be made by private companies. Which meant:

1. BC Hydro would be forced to contract out all its new power.
2. Each contract was on a “take or pay” basis, meaning that Hydro would have to take the power whether or not it needs it (most of the time it doesn’t), or pay for it anyway.
3. Electricity is in short supply in the months leading up to the “run-off” and thereafter until the next run-off. Because water levels are for the most part too low for independent power producers (IPPs) to produce, this means that virtually all private power is delivered to BC Hydro when they don’t need it!
4. This means that BC Hydro, because the contracts imposed on them say so, must pay IPPs more than double the market price! And up to 10 times what they can produce it for!
5. BC Hydro, under government imposed contracts, must pay IPPs for this power they don’t need.” (Mair put the excess bill at “$50 billion over the next 25 to 30 years, meaning about $2 billion per year, indexed to the cost of living. This assumes that no more IPP contracts are let — yet new ones are being negotiated now.” That’s more than twice what the province’s new report predicts. Then again, the report acknowledges its “estimate is believed to be conservative.”)

 

Mair adds a kicker that isn’t so easily measured in dollars:

“It must be added that the adverse effect of IPP projects on the rivers can be devastating. And yet, for reasons unknown, they are not penalized for breaking the environmental rules there are.”

And then, because he is irascible Rafe: “I pause here to point out that so far as I can find, the Province, the Vancouver Sun and its main political columnists, Mike Smyth and Vaughn Palmer, have said nary a peep critical about all this.”

In releasing the report, written by former B.C. Treasury Board director Ken Davidson, Minister Michelle Mungall said: “This is the type of thing the BC Liberals have done — let their rich friends get away with British Columbians’ dollars, and it’s B.C. that has to pay. If we had not gone into these private power schemes, people would be paying $200 less on their hydro bills right now.”

What was she driving at? Hmmm, let’s return again to Tyee archives. Will McMartin laid it all out in several articles back in 2010.

They connect the dots including:

• The lousy economics of IPPs
• The BC Liberal-connected outfits with little experience or assets getting the contracts
• And how those contracts – licenses to print money, really – made it easy for their recipients to flip them quickly at great profit to energy giants outside B.C.

 

These headlines tell the tale:

Is This Any Way to Finance Clean Energy? BC Hydro borrows capital at 1 per cent, private power firms pay 12 per cent or more. Campbell chose builders sure to make green power far more expensive.

Plutonic Tops List of Power Firms Donating to Libs. Of the 14 successful firms in BC Hydro’s latest call for power, 10 have made contributions to the Liberals totaling nearly $385,000.

BC’s Energy Independence? Don’t Believe It. Minister Lekstrom is wrong. Most new energy projects controlled by big firms outside BC.

Vancouver Law Firm a Big Player in BC Hydro’s Clean Energy Call. Stikeman Elliott partner sits on Hydro board; another a major player in Finavera Renewables.

Edmonton Profits Big from BC Private Power. For trio of independent power plants, net-profit margin is a whopping 26.8 per cent.

Read ’em and weep. 

 

 

 

[Gurn]

And yet some people will believe the Liberal's are good money managers despite:

 

Having to pay hundreds of millions after the Supreme Court smacked them down for violating contracts

convention center over runs.

hundreds of millions for a partially retractable roof on a stadium that both major tenants don't really want to be in.

Selling off BC Rail

Privatizing, sort of,  BC Ferries.

 

And so on.

 

[xereau]

25 minutes ago, gurn said:

And yet some people will believe the Liberal's are good money managers despite:

 

Having to pay hundreds of millions after the Supreme Court smacked them down for violating contracts

convention center over runs.

hundreds of millions for a partially retractable roof on a stadium that both major tenants don't really want to be in.

Selling off BC Rail

Privatizing, sort of,  BC Ferries.

 

And so on.

 

Parties are nothing more than mildly competing money laundering mafias.

 

Run as fast as you can from ANY politician, or party, that tells you that they can spend other peoples' money better than the other guy.

[Tortorella's Rant]

"omg lets vote for a different party this time because things will be different."

[DADDYROCK]

Apparently the Liberal Government hired some of the ex-ENRON folks to be management for b.c. hydro,HOW CORRUPT IS THAT!

 

THE LIBERALS ARE LIKE THE STATES REPUBLICANS,JUST WORKING FOR THE RICH,AND THEIR OWN PARTY.

SCREW THE BUNCH OF THEM.

[Gnarcore]

26 minutes ago, Tortorella's Rant said:

"omg lets vote for a different party this time because things will be different."

Not so much that as hold those scumbags accountable and probe this matter and if kickbacks happened jail them and ban from BC politics for life. 

[Duodenum]

Quite frankly can't see myself voting BC Liberal for the next 20 years at least. Would only consider them if they made wholesale changes. 

[johngould21]

42 minutes ago, xereau said:

Parties are nothing more than mildly competing money laundering mafias.

 

Run as fast as you can from ANY politician, or party, that tells you that they can spend other peoples' money better than the other guy.

Says the folks that voted for the Liberals. If this was done under an NDP government, we'd never hear the end of it. Fast Ferries come to mind. As @gurnsaid above, cronyism was flourishing under Campbell and Clark!

[Warhippy]

I kid you not.  I have watched people of the older demographic flat out comment on this story "oh but do you remember fast ferries, bingo gate, leaky condos" followed by the "anything the NDP can do to make the Liberal party look bad"

 

Without a single iota or cell of intelligence in their head of what really went on with those issues or acceptance of the fact that this has literally screwed taxpayers for decades.  When Site C is finished BC will be able to supply power to almost 2.4 times its current population, but we will be paying some of the highest hydro rates in the country.  While excess power is sold to the people who signed these contracts in the US for far far less than we're paying here in BC having footed the bill for it all

[johngould21]

1 hour ago, Gnarcore said:

https://thetyee.ca/Analysis/2019/02/14/BC-Ratepayers-Report-Private-Energy-Rip-Off/

 

 

 

I remember Rafe going on and on about this back when he was a columnist for the North Shore News. Funny, and sad, how all these I told you so stories are coming out since the Liberals became the opposition. ICBC, Hydro, Money Laundering, Convention center, BC Place, Port Mann Bridge construction, and now this.

[Gnarcore]

2 minutes ago, Warhippy said:

I kid you not.  I have watched people of the older demographic flat out comment on this story "oh but do you remember fast ferries, bingo gate, leaky condos" followed by the "anything the NDP can do to make the Liberal party look bad"

 

Without a single iota or cell of intelligence in their head of what really went on with those issues or acceptance of the fact that this has literally screwed taxpayers for decades.  When Site C is finished BC will be able to supply power to almost 2.4 times its current population, but we will be paying some of the highest hydro rates in the country.  While excess power is sold to the people who signed these contracts in the US for far far less than we're paying here in BC having footed the bill for it all

BC Hydro went from a benefit to a cash grab under the Liberals. I can't post on a public forum what i think should happen to those responsible. 

[Ronaldoescobar]

While I agree that all political parties screw people over in different ways... The Liberals definitely need to pay for this as it is either the worst mismanagement in history or straight corruption plain and simple. 

[xereau]

30 minutes ago, johngould21 said:

Says the folks that voted for the Liberals. If this was done under an NDP government, we'd never hear the end of it. Fast Ferries come to mind. As @gurnsaid above, cronyism was flourishing under Campbell and Clark!

Nope, I am completely outside of the box on this one.  I hate them ALL.  And if you think the NDP have you in their best interest, you are wrong, and lost.

[DADDYROCK]

Both Politicians and Diapers need to be changed often and for the same reason.

 

[Ryan Strome]

2 hours ago, xereau said:

Nope, I am completely outside of the box on this one.  I hate them ALL.  And if you think the NDP have you in their best interest, you are wrong, and lost.

They either tax you to death or flat out steal your money, either way they're taking your money.

[Ryan Strome]

British Columbia's energy minister lambasted the province's former government Thursday over a long-criticized Liberal energy strategy the NDP says has left hydro customers on the hook for billions.

 

 

"The previous government's choices related to BC Hydro and their constant interference with the BCUC resulted in long-term commitments of over $50 billion to private power producers," Michelle Mungall told reporters, adding that "BC Hydro bought too much emergency, the wrong type of energy and paid too much for it."

Mungall's remarks come just a day after the release of a damning report that claims BC Hydro ratepayers will pay more than $16 billion over 20 years because the province's previous government pressured the utility to sign long-term contracts with independent power producers.

Championed by then-premier Gordon Campbell, the privately-owner green energy top-ups have cost each household an extra $4,000 over two decades or $200 a year, according to the report.

 

Mungall's remarks come just a day after the release of a damning report that claims BC Hydro ratepayers will pay more than $16 billion over 20 years because the province's previous government pressured the utility to sign long-term contracts with independent power producers.

Championed by then-premier Gordon Campbell, the privately-owner green energy top-ups have cost each household an extra $4,000 over two decades or $200 a year, according to the report.

 

 

Mungall commissioned the independent report and asked consultant Ken Davidson to examine factors that influenced BC Hydro's purchases from IPPs.

The NDP government released Davidson's findings on Wednesday evening, claiming his report details how the BC Liberals had "manufactured an urgent need for power" and stopped BC Hydro from producing its own – a process that led to the utility having to buy from private companies and, ultimately, raised prices.

"The BC Liberals' IPP scheme was a sweetheart deal for some, but not for British Columbians," Mungall said.

"B.C. didn't benefit. BC Hydro customers didn't benefit. A small number of well-placed independent power producers benefited, and customers were stuck with a 40-year payment plan."
 

Recommendations could lead to smaller rate increase

Despite denouncing the Liberals for actions the government said led to bigger hydro bills for British Columbians, the NDP itself is planning to apply for a rate hike this year.

By adopting some of his recommendations, Mungall said the government will be able to apply for a 1.8-per-cent hydro rate increase in April as opposed to the 2.6 per cent planned under the previous government.

"We are able to do this because we accepted a recommendation from the review into BC Hydro to stop using the rate-smoothing regulatory account and to write off its balance to zero in 2018-19," the minister said.

"This will relieve ratepayers of the burden of paying off $ 1.1 billion in deferred costs over the next five years."

The proposed hike comes after a three-per-cent increase in April 2018 after the B.C. Utilities Commission rejected an application to freeze rates for a year.

According to Mungall, other cost-saving measures include "managing future energy purchases from private producers," as well as immediately ending BC Hydro's Standing Offer Program.

The SOP was meant to encourage new small, clean and renewable energy projects in B.C. was billed as a way to "streamline the process for selling electricity to BC Hydro."
 

BC Liberals fire back

The Opposition was quick to point the finger back at the NDP, saying the province would have a "significant" power shortage with the IPPs helping supply electricity.

The NDP has also approved IPPs, Liberal hydro critic Greg Kyllo said, adding that Wednesday's report is part of a political tactic.

“After introducing a throne speech so devoid of ideas that NDP members had nothing to say, the government is now trying to distract from the fact they are out of gas," he said.

“The NDP promised to freeze hydro rates and have failed to do so. Now they’re looking to blame someone. The never-ending NDP blame game could cost up to 5,000 jobs, many of them First Nations workers.”
 

IIPs part of ongoing controversy

It isn't the first time, however, the Liberals have been criticized for these public-private energy partnerships.

"It's unfair and it's going to bankrupt the Crown utility," warned Melissa Davis of Citizens for Public Power when the so-called sweetheart deals were announced in 2009.

Two years later, observers were already sounding the alarm, saying BC Hydro was paying IPPs 10 times the cost of making its own power.

Western Canada Wilderness Committee's Gwen Barlee said at the time the money was being used "for energy we don't need and we sell at a loss out of the border."

SFU political scientist Majorie Griffin gave another prediction in 2012, saying "at some point, hydro has to pay for these very costly initiatives the government has imposed upon it."

Advocacy group Clean Energy BC, on the other hand, pointed out that those projects helped B.C. become a leader in green power, criticizing Davidson's calculations for using spot prices instead of long-term fixes price arrangements.

"In his report, there is a fundamental error in using an inaccurate and overly simplified proxy for the market price of electricity," the group wrote. "No party that builds new energy projects – BC Independent Power Producers (IPPs), BC Hydro, or IPPs or utilities anywhere – uses a spot price like Mid-C. Projects are based on long-term fixed price arrangements."

Davidson's report marks the end of Phase 1 of a comprehensive review of BC Hydro the government launched last summer.

While acknowledging the importance of developing green energy, Mungall said the current government is pledging to prioritize the bottom line and the impact to taxpayers.

"I would say there are opportunities for wind and solar in British Columbia, but what we want to make sure is that it's also economical," she said.

With files from CTV Vancouver's Penny Daflos and The Canadian Press

 

https://bc.ctvnews.ca/customers-on-the-hook-for-16b-after-liberals-costly-bc-hydro-deals-report-1.4296570

[johngould21]

16 hours ago, xereau said:

Nope, I am completely outside of the box on this one.  I hate them ALL.  And if you think the NDP have you in their best interest, you are wrong, and lost.

But, I hope you vote! If you don't, do not complain.

[JM_]

Clean Energy BC issues response to report conducted by Ken Davidson

February 14, 2019

Clean Energy BC issues response to report conducted by Ken Davidson

February 14, 2019 – Vancouver, British Columbia

For Immediate Release

 

Clean Energy BC (CEBC) is very disappointed with the contents of the “Review of BC Hydro’s Purchase of Power from Independent Power Producers” conducted by Ken Davidson. In his report, there is a fundamental error in using an inaccurate and overly simplified proxy for the market price of electricity. It is stated, “Energy has only one price and that is the price it can be bought or sold at in the market. In the case of BC Hydro, the market value of all energy is the Mid-Columbian (Mid-C) rate.” No party that builds new energy projects – BC Independent Power Producers (IPPs), BC Hydro, or IPPs or utilities anywhere – uses a spot price like Mid-C. Projects are based on long-term fixed price arrangements.

Independent Power Producers have been essential to BC’s green power grid. Historic investments have enabled BC to become an internationally recognized clean power leader, propelling our province to meet the reduction targets in CleanBC and the Paris Agreement. IPPs across the province are proud to have invested in the infrastructure, jobs, and community building of BC.

Furthermore, IPPs have built strong and long-lasting relationships with numerous First Nations in the Province. Our partnership approach supports First Nations’ economic development and reconciliation by providing jobs, equity partnerships, and socio-economic benefits – often in remote areas where there are few other opportunities available. Research has shown that clean energy projects offer the single most powerful First Nations reconciliation tool available for the BC government. Historically, BC Hydro has lacked First Nation inclusion in their process, leaving a gap that IPPs have successfully filled to cultivate equity partnerships.

“When the B.C. NDP government chose to proceed with Site C, they did this knowing that they would deprive First Nations of the opportunity to invest billions of dollars in an industry that is within their values. It is a sad day that this is no longer an option to communities that were developing plans to build more projects.”

— Kekinusuqs, Judith Sayers, President of the Nuu-chah-nulth Tribal Council

The IPP run-of-river hydro, wind, and solar generation has diversified the power mix and brought power to regions and communities previously under-served. The majority of IPP projects have been approved by the BCUC regulatory process. During the period of time referenced in the report, the contract prices that were agreed upon were based on market rates that, even if BC Hydro were to have built the projects, would have been constructed at the same or higher rates. In addition, BC Hydro does not have the capacity or capability to build these types of projects.

IPPs contribute to property tax and water rental revenues collected by Government. In 2018, the total tax contributions made by IPP projects in BC were greater than that of the entire oil sector. If new renewable power projects had not been built, new power capacity requirements would have been met by gas plants with related emissions profiles.

Independent Power Producers negotiate in good faith with government, risking capital, investing in trail-blazing new partnerships with First Nations and utilizing the best market information available. The member companies of Clean Energy BC have historically championed BC’s climate leadership vision and continue to support the Province’s invigorated new CleanBC Plan. We look forward to a long-term relationship with the Province of BC as it endeavours to achieve its international commitments to carbon reduction through electrification.

“Our members are delivering low-cost, affordable, and reliable power throughout the world and in BC,” said Jae Mather, Executive Director of CEBC. “Other nations across the globe are actively accelerating the transition to renewable energy. The clean energy sector is driving the third industrial revolution, investments, and jobs, and BC’s future is locked into the low-carbon world. We look forward to working on the CleanBC plan with the Government of BC so that we may reduce our carbon emissions, grow the economy through investment and jobs, and build resilience with First Nations and communities throughout the province.”

 

https://www.cleanenergybc.org/news/14237

[Gurn]

6 minutes ago, Jimmy McGill said:

Our members are delivering low-cost, affordable, and reliable power throughout the world and in BC,”

Not all that low, if it costs more than Hydro could make, and sell it for.

[JM_]

Just now, gurn said:

Not all that low, if it costs more than Hydro could make, and sell it for.

thats the NDP report spin, many people are challenging that. 

 

There's a lot of NDP spin going on right now, thats worth keeping in mind. Ken Davidson is as orange as they come, he's not "independent." It doesn't mean he hasn't raised any valid points, but the criticisms of the report are worth reading, particularly people in the green energy sector.