December 17, 2001

Hydro Privatization is Another Broken Promise

Recommendations contained in the interim report of the Task Force on Energy Policy flow from nothing more than the dictate "let the market rule".

Now we know why the report was held for release until the week before Christmas when most of the usual media commentators are off on holiday.

Immediate news coverage focuses on the astounding recommendations that electricity prices be allowed to rise by 30% or more, that the controversial issue of massive gas storage in the Fraser Valley be pursued, and that BC Hydro be broken into three separate companies. Buried in the subtleties of the report's language is provision for two of those three companies to be privatized.

The report doesn't call for a public debate on whether international (read U.S.) market pricing should determine electricity prices in BC. It simply invites further submissions on whether that change should take place over 5 years, 10 years or some longer period (see page 25).

In today's dollars the price increase would take an estimated $1 billion per year from BC Hydro's customers. What would happen with that $1 billion per year? The report observes "The province has a significant financial investment in the assets of BC Hydro and must receive an appropriate market-related return." Having created a structural deficit with reckless tax cuts, it now looks like the province is reaching into taxpayers other pocket to retrieve $1 billion per year in profits earned by the dams. With the Premier's Deputy Minister, Brenda Eaton, participating on the panel, no one should think that the recommendations are far removed from the power and direction of the Premier's Office.

In opposition, and during the election campaign, Premier Campbell repeatedly attacked the NDP government for freezing BC Hydro rates. He left the clear impression that he would see lower prices. That was then and this is now when the question turns to when would you like your 30% increase!

There is a very important difference in how the report describes its recommendation for each of the three companies it would see made out of BC Hydro (see page 24). When talking about the dams, the report says "The generation company should be a separate entity of the Crown …" It goes on to say that this entity of the Crown could consist of multiple companies. When talking about distribution, meaning how the power gets to your home from the big transmission lines, the report says "At least in the interim, the distribution entity should be a separate entity of the Crown …" When talking about transmission, the report simply says "In order to attract new players into the electricity sector, it is necessary to establish a separate and independent transmission component."

The report goes from definite Crown entities, to interim Crown entities, to NO MENTION of a role for the Crown in a new transmission company! It looks like Premier Campbell's commitment not to privatize BC Hydro is about as strong as his past statements on lower BC Hydro rates.

If that reversal of positions isn't shocking enough, the report turns to natural gas storage and says (p. 32):

For those who don't remember the strong reaction of Fraser Valley residents to the issue of natural gas storage, but do recall the recent Sumas protests, let us just say you haven't seen anything yet! This time round we have the issue of natural gas storage coming forward at the same time as an interim report on drinking water that clearly says protection of the source of our water supply should take precedence over any competition for land uses. This issue alone should make for some interesting debate. Just where will those Fraser Valley MLAs come down?

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December 3, 2001

Openness and Passing Timelines
The "selected" and the "not selected"

In the early days of the Campbell government numerous ambitious projects were begun with precise timelines. One of the many such important projects is the Energy Policy Task Force. Its timetable is shown here. The background section on the task force's website can be said to make public at least some of the information gathered in the first step by September 30, 2001. The second step calls for drafting an Energy Policy Report by November 30, 2001. It is now time for the government that claims to be open to share that Report not just with "selected parties", but also with unselected parties, the general public.

According to the terms of reference for the task force, the policy that emerges will determine "appropriate means of regulating, using and distributing" the "entitlement" British Columbians own as the result of low-cost electricity that is the product of W.A.C. Bennett's vision. That decision alone, not even considering decisions affecting future generation and distribution, will affect British Columbia no less than the original decision to build a network of hydro-electric dams. That is all the more reason the draft report ought to be shared now with all the public, not just amongst "selected parties".