IPPs the ruination of BC Hydro

[Smurf]

Yes but anyone with half a brain knew away back then they were bad regardless of the economy and for that matter the need. Some of us were arguing against them then and our predictions were sadly proven true. I believe it will only get worse.

[maple leaf]

And they dig us deeper and deeper into the hole,and I think they might be on to something with the bait and switch.





BC Liberals Still Stuck on Sham Private Power - Forcing Hydro to Buy More IPPs Featured
Written by Rafe Mair Monday, 11 June 2012 11:56

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After more than a week of some ailment where solid foods were a problem (not liquids, however) I should be at my rest, book in hand to help me snooze…but I find myself so *bleep* angry I’m here spouting venom.

Why?

I’ve just read our economist Erik Andersen’s blog in the Common Sense Canadian and can’t believe my eyes…please take the time to read this blog.

The story is simple – which is what makes it so hard to understand. In short, under BC’s Vladimir Putin, Cop Supreme Rich Coleman, this government is about to ruin several more BC rivers to get more private power. Puzzle this one for a moment. As we sit and digest this, BC Hydro is spilling water over its dams while buying private power at egregiously inflated sums under deals this rotten government has forced upon them! And there will be more!

More of our rivers shattered by bulldozers so uncaring corporations can provide BC Hydro with power they don’t need any time but are now buying at hugely inflated prices while they *bleep* away their power over the top of their dams!

The reason for this ongoing insanity is clearly that the Liberal Government just doesn’t know how it can get unstuck from the tar baby Bre’r Rabbit Gordon Campbell left them stuck to. The chickens have come home to roost – the companies given these sweetheart deals are producing power and BC Hydro is forced to buy at a huge premium even though its own reservoirs are full to brimming.

Coleman sees the only way is to brazen it through, scattering wildly inaccurate power needs as he goes.

Why has Premier Clark said nothing? She was around at the beginning of these Independent Power Project (IPP) approvals – why has she not said “enough” and put a stop to the program?

I’m afraid it’s emerging that she simply is not too bright. Her handlers knew, for example, that the Tar Sands would be high on the agenda at the Western Premier’s Conference, that Clark would be forced to deal with it and just couldn’t handle it, so they conjured up a cock and bull story about her being needed in the Legislature.

The insiders know that Premier Clark is no good on issues – she simply cannot understand them well enough to deal with them so she must be confined to what she does best: warm fuzzy issues like Family Day holidays and photo-ops. Coleman is now running the show.

The IPP issue is not complicated. IPPs have contracts to make private power, destroying the river and its ecology, and BC Hydro, under the sweetheart deal, must buy that power at a hugely inflated cost, even though they don’t need it. The only complicated part is the obvious question: why would any sane government get into this sort of sweetheart deal? This is followed by another obvious question: how the hell do we get out of this mess?

I have a partial answer to that – Adrian Dix makes it clear that no more of these licenses will be granted and all of the present deals will be put to the “smell test”. To those who cry “sanctity of contract”, I pose this in reply: suppose a mayor was elected to clean-up city hall – do you suppose he’d honour the sweetheart long-term and viciously inflated contracts that the previous mayor made with his brother-in-law and other cronies?

Briefly, on another matter we’ll be addressing comes the brilliant blog by Captain Edward Wray in the Sunday Province which I emailed out and put up on facebook.

Capt Wray smells a “bait and switch”. The federal and provincial governments will, at the right moment, admit that Kitimat is the wrong port and Douglas Channel the wrong channel and will announce this the new port will be Prince Rupert. Having done that, they will authorize the Enbridge pipeline to the latter port and, like Little Jack Horner, say, “Oh, what a good boy am I.”

It’s reminiscent of what the late Robert Strachan said about W.A.C. Bennett: “He puts a stone in your shoe and just when it becomes unbearable, takes it out and you’re so grateful, you forget how it got there in the first place!”

More on that in the days to some.

http://thecanadian.org/item/1541-bc-lib ... -rafe-mair

@@@@@@@@@@@
And he is not the only one who thinks Coleman is really running things for our incompetent Premier .



What Christy Clark Hath Cobbled Together Let No Rich Coleman Tear Asunder…Or Something Like That, Right? RIGHT?!
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http://alexgtsakumis.com/2012/06/11/wha ... ght-right/

[steven lloyd]

The story is simple – which is what makes it so hard to understand. In short, under BC’s Vladimir Putin, Cop Supreme Rich Coleman, this government is about to ruin several more BC rivers to get more private power. Puzzle this one for a moment. As we sit and digest this, BC Hydro is spilling water over its dams while buying private power at egregiously inflated sums under deals this rotten government has forced upon them! And there will be more!

More of our rivers shattered by bulldozers so uncaring corporations can provide BC Hydro with power they don’t need any time but are now buying at hugely inflated prices while they *bleep* away their power over the top of their dams!

The reason for this ongoing insanity is clearly that the Liberal Government just doesn’t know how it can get unstuck from the tar baby Bre’r Rabbit Gordon Campbell left them stuck to. The chickens have come home to roost – the companies given these sweetheart deals are producing power and BC Hydro is forced to buy at a huge premium even though its own reservoirs are full to brimming.

We can only hope that whoever becomes Premier next spring has the balls to pull a Campbell and rip up the contracts.

Oh wait - wouldn't that be illegal ?

[flamingfingers]

Illegal? Isn't that a sick bird? Seriously tho SL, I do not think it would be terribly difficult to show that these IPP agreements were NOT made in the best interests of the taxpayers of BC and thus, perhaps the legality of the contracts could be disputed?

What would that be classed as? Malfeasance? Fraud even?

[steven lloyd]

What would that be classed as? Malfeasance? Fraud even?

Collusion is another word. You have to keep things in perspective flaming. Granted, the taxpayers of this province are on the hook for billions over the next six decades to pay off the private interests of "friends" of the Liberals, and we don't know yet how much we're getting shafted on the sale of our public assets to cover this government's fiscal ineptitude (as all documents provided to date under the FOIPA have been heavily redacted), and certainly $6,000,000 in taxpayers money isn’t a lot when we can bring Court proceedings to a quick close (like, before any damning evidence can be given), but look at it this way –

- it’s not like Campbell tried to get on the Skytrain without paying for his ticket.

(oh yeah - he has a chauffer now)

[Smurf]

Wouldn't it have been nice if some recalls had worked and we could possibly have had a minority government for this last couple of years. At the very least they would have had to at least debate this foolishness. In the end we'll probably find out that the only way for these contracts to be cancelled is if BC Hydro is sold and the new buyer doesn't have to honour them or possibly if it is sold somehow to the IPP providers. I still believe that somehow the Liberals are setting Hydro up to be sold off.

[Smurf]

Looking at the problems at BC Ferries makes me wonder how long it will be before BC Hydro runs into the same problem. With the almost guaranteed increases in rates due to the expense of the IPP's looming in our future will BC Hydro also be forced to price itself out of the market. Will they be forced by this governments forcing them into expensive totally unnecessary contracts to follow the same path as the ferries. People can as is being proven by the ferries scenerio change their habits and stop business dead in their tracks.

Just a couple of days ago I had a short conversation with a friend who has recently built a new house and went very green. Solar, geothermal, you name it. They are very happy they did, but she also said their solar system cost them about $4.00 a kilowatt whereas today it would only be about $1.00 a kilowatt. Will things like this come into play. If Hydro gets too expensive will there be a sudden change to demand and Hydro will be left with a huge expensive system they can't maintain. It's already starting due to the IPP's. Only time will tell. Hopefully they don't privatize it and we end up again subsidizing a for profit business.

[twobits]

Just a couple of days ago I had a short conversation with a friend who has recently built a new house and went very green. Solar, geothermal, you name it. They are very happy they did, but she also said their solar system cost them about $4.00 a kilowatt whereas today it would only be about $1.00 a kilowatt. Will things like this come into play. If Hydro gets too expensive will there be a sudden change to demand and Hydro will be left with a huge expensive system they can't maintain. It's already starting due to the IPP's. Only time will tell. Hopefully they don't privatize it and we end up again subsidizing a for profit business.

Your reference to cost comparison of a kilowatt makes no sense to me. You need cost of kilowatt/hr to do a comparison. Since the cost of a kilowatt hour is about a dime off the grid, I'm not sure what you are trying to say.

[Smurf]

I am taking about the cost to set up a sloar system and how fast it is dropping. At the time they set their system up it cost approximately $4.00 to set up a system capable of producing 1 KW. Currently it would cost $1.00 to set up the same system.
It is getting more and more affordable to drop off the grid or at least like her become self substaining. Meaning that under the current circumstances and possibly huge increases in cost from BC Hydro more and more people might do it, helping to drop consumption putting even more of a squeeze on Hydro to be able to pay for the expensive unnecessary IPP's for the next 5 or 6 decades. On top of that she sells power to the grid all day long while they are at work and recovers some of her expenses. I am not privy to any of the exact figures, but she says it is working out well.



EDIT TO ADD:

Basically what she was saying was that the system they have would now cost 1/4 of what it did just a couple of years ago.

[twobits]

I am taking about the cost to set up a sloar system and how fast it is dropping. At the time they set their system up it cost approximately $4.00 to set up a system capable of producing 1 KW. Currently it would cost $1.00 to set up the same system.
It is getting more and more affordable to drop off the grid or at least like her become self substaining. Meaning that under the current circumstances and possibly huge increases in cost from BC Hydro more and more people might do it, helping to drop consumption putting even more of a squeeze on Hydro to be able to pay for the expensive unnecessary IPP's for the next 5 or 6 decades. On top of that she sells power to the grid all day long while they are at work and recovers some of her expenses. I am not privy to any of the exact figures, but she says it is working out well.



EDIT TO ADD:

Basically what she was saying was that the system they have would now cost 1/4 of what it did just a couple of years ago.

So it now takes a dollar in solar investment to generate 1 KW. But how long does it take to generate that KW. An hour? A day? A year?

[NAB]

"Bizarre" is too mild a word for this idiocy, and we cannot afford higher rates! What to do..???

Nab

July 7, 2012.

""Energy Minister Rich Coleman may have pushed the furor over B.C. Hydro's finances into the background with his decision earlier this year to cap electricity rate increases, but the bill for ratepayers hasn't stopped growing.

However, it is indicative of the tension involved in keeping electricity rates low for consumers while paying for B.C. Hydro's biggest infrastructure renewal since 1961 when W.A.C. Bennet's government nationalized the B.C. Electric Co. and transformed it into a powerhouse Crown utility.

Hydro plans to spend about $2 billion a year through 2016, with the money going to revamp B.C.'s electricity system.

Projects include its $930 million smart-meter program, an $880 million refurbishment of Ruskin Dam near Mission and a $1.3 billion upgrade to John Hart Dam near Campbell River.

Through 2015, Hydro plans 14 projects with pricetags exceeding $50 million each, including the $7.9-billion Site C dam on the Peace River.

Along the way, Hydro's debt, which ratepayers will eventually have to pay, is set to keep growing to $13.3 billion compared with $7.5 billion in 2006 and $18 billion by 2015.

Meanwhile, electricity rates are failing to reflect the true cost of its business. Hydro has projected that rates need to go up about 10 per cent per year for the indefinite future to keep up with the cost of system expansion and other debts on its books.

But that's not happening. This year, a proposed 9.73 per cent rate hike was whittled down to 3.91 per cent by the province, and in 2013 rates go up 1.44 per cent ostensibly to buffer families from the impact of higher rates, according to a statement by Minister Rich Coleman.

Critics noted that the government's action, which included cancellation of a rate hearing before the B.C. Utilities Commission, also had the effect of buffering Hydro from scrutiny by a number of stakeholder groups that planned to use the hearing to inquire more deeply into Hydro's bookkeeping methods.

The commission wants Hydro to prove that the Power Smart program is paying its way with lower electricity consumption, to explain how long new digital electricity meters in the smart meter program will last, and to definitively state how much rates need to go up in order to pay off all the debt on its books in a reasonable time frame. It will be up to the next provincial government to decide whether to accept those recommendations.

Apart from its infrastructure investments, Hydro also needs to pay off an entire subcategory of debts that have been piling up for seven years so-called "deferral accounts" that grew to $2.2 billion in 2012 and are projected to reach $5 billion by 2017.

For example, even though all of Hydro's customers will be onto the Crown corporation's smart meter system by the end of 2012, they won't start paying for the $930 million cost of that system until at least 2014. In the interim, that debt has been moved into a deferral account.

In March, B.C. Auditor General John Doyle accepted the use of deferral accounts to smooth out electricity rates. But Doyle noted that only a fraction of the money in the accounts is used to avoid abrupt changes to electricity rates. Instead, it appears to be a general method of avoiding rate increases arising from other parts of Hydro's business.


Doyle noted that the provincial government is collecting an annual dividend from Hydro based on the notion that the utility should be generating a return to the taxpayers of B.C.

This fiscal year's dividend payment to the province is projected to be $556 million, rising to $599 million in 2013.

Meanwhile, Hydro expects to pay $487 million in interest to service its debt growing to $631 million by 2015.

"You've got to be running like hell just to stay put," said Jim Quail, legal counsel for Canadian Office and Professional Employees 378, a Hydro union. He said the situation is like failing to make the minimum monthly interest payment on a credit card.

NDP energy critic John Horgan said, "The whole [Hydro] file in my mind is a complete disaster."

A wet spring has Hydro's reservoirs overflowing. But instead of exporting power at a profit, many of Hydro's biggest dams have been idle while independent power producers with long-term contracts sell onto the Hydro grid at prices many times higher than the selling price of electricity on the trading market B.C. shares with Washington, Oregon and Northern California.

Horgan said he has learned that Hydro's biggest generating system, on the Peace River, will be idled for several weeks. Meanwhile, electricity trade data from trading grid operators suggests that Hydro has been selling at a loss into the western grid to dispose of the power that private operators keep feeding into it.

"They are selling into a negative market. It's absolutely bizarre. In this instance, it's just nature converging to highlight the errors in B.C. Liberal energy policy," Horgan said."

http://www.timescolonist.com/business/A ... story.html

[steven lloyd]

A wet spring has Hydro's reservoirs overflowing. But instead of exporting power at a profit, many of Hydro's biggest dams have been idle while independent power producers with long-term contracts sell onto the Hydro grid at prices many times higher than the selling price of electricity on the trading market B.C. shares with Washington, Oregon and Northern California.

I wonder how much the potential revenue lost combined with debt incurred will be just over the next ten months. We cannot get rid of this government soon enough. No - no other government could be worse. It will be decades before this province recovers from the governance of these corrupt clowns – if it ever can. What a sad state of affairs they have brought us to.

[Madtaxi]

So it now takes a dollar in solar investment to generate 1 KW. But how long does it take to generate that KW. An hour? A day? A year?[/quote]


Try Google

[Smurf]

twobits wrote:

So it now takes a dollar in solar investment to generate 1 KW. But how long does it take to generate that KW. An hour? A day? A year?

Sorry twobits, I believe that question was aimed at me. I went away for a few weeks and missed it. That is a good question. In looking back at it now it seems away too cheap. I got caught up in the fact it has dropped 75% in cost and didn't look at the whole thing. I just wanted to point out how fast it was getting cheaper to produce our own and that possibly more people will start to do it. I cannot discuss it further with her as although we were good friends when we were in business and dealing with her on a regular basis we seldom see her any more. I know she now lives outside of Edmonton somewhere and calls us about once a year for a coffee when she is in town. I do believe the $ figures are possibly off, but the drop in cost is still interesting. Maybe Nab knows the current cost as I believe he is involved with producing his own power.

It gets complicated but a KW should basically be instant. If you want to light 10 hundred watt bulbs, you want to do it now, not over an hour or whatever. If you have a 5KW generator it will cover the demand on it instantly from zero to 5KW's. KWH is one KW produced steady for one hour. However when Hydro is billing it they could bill for one KWH if you used 100 watts for 10 hours. I hope you get what I mean.

Sorry if I confused everyone.

[Homeownertoo]

Playing devil's advocate: in the early 2000s, the government believed that substantial additional power generation would be required in the future. Unable/unwilling to build additional power facilities themselves, RFPs were issued and projects granted.

The only way any private company will spend money on an infrastructure system such as a power plant is to have some form of guarantee on selling power. The government didn't anticipate the ongoing recession that significantly impacted power demand, and also has to plan for low-water years.

I held off commenting on the IPP controversy till now for the simple reason that I was not living in BC when provincial policy was changed back in 2002 to emphasize clean energy and independent power producers. Still, the postings I've been reading often did not have the ring of truth to them. Rather, they had the ring of politics and disinformation.

So now I have done some investigation, and found that while the Campbell government were poor crystal ball gazers, they were not the corporate toadies they have been portrayed as on this file. Much of the criticisms I've read here and elsewhere boil down to:

1. Harping on the fact that the economic downturn of the past few years has yielded low-priced energy available from the US;
2. Low current spot market prices due to heavy rainfall in recent months;
3. Lots of water behind BC dams that is not being used to produce energy due to commitments to buy from IPPs.
4. Under-utilization of gas-powered plants at a time when gas prices are at the bottom of the barrel.
5. The usual moronic apples to oranges comparison of energy prices from heritage sites vs. actual energy prices that prevail from new power generation.

Note, now, that none of the situations 1 to 4 above was predictable back in 2002. On the contrary, all predictions were of a drier climate (remember global warming), less power from BC dams, and little or no surplus US power available for import, especially at the cheap prices currently prevailing.

The question that should be asked -- but which is not reflected in much of the criticisms -- is whether the IPPs are producing new power at less cost than BC Hydro projected it could have done back in 2002. Because that was the choice then. The facts that cheap surplus power is available today on spot markets, and that BC is contracted to buy power from IPPs at a higher price, and that gas prices are so low today, are irrelevant. They are irrelevant because the Campbell government determined, and rightly so it seemed at the time, that BC should be self-sufficient in power generation at a time when power prices were expected to rise dramatically in coming years.

Over the short-term, it was obviously a bad bet. The longer term is, obviously, unknown so we don't know whether it really is a bad bet. What we do know is that BC will, as a result of that 2002 decision, be self-sufficient in relatively clean power, for better or for worse. What I have learned is that much of the opposition, with its overblown numbers of what BC is paying for power from IPPs, is largely an exercise in political disinformation.