BC Hydro at mercy of indpendent power producers

Dear editor,

Re: Tom Fletcher’s Aug. 17 column about the report on BC Hydro (formally known as Review of BC Hydro – June 2011)

Dear editor,

Re: Tom Fletcher’s Aug. 17 column about the report on BC Hydro (formally known as Review of BC Hydro – June 2011)

Mr. Fletcher basically repeats the statements that accompanied the government’s release of the report; in short, it sounds like a piece of a propaganda campaign. The tone is sensational and facts are few.

First off, Mr. Fletcher says that BC Hydro is one of the safest investments around. This is true because BC Hydro is in the public domain, and the BC taxpayer is on the hook by way of hydro rates billed to the consumer.

Economist Erik Andersen says that if BC Hydro was a private company, it would be bankrupt due to the contracts with the independent power producers (IPPs) it was forced to sign by the Liberal government.

The Review Panel — three senior bureaucrats who authored the Review of BC Hydro – June 2011 — are two deputy ministers and one assistant deputy minister – employees of the provincial government.

These three employees had to be careful of what and how they reported their findings; thus the review could not be critical of government policy to the degree that is warranted, or three bureaucrats would be down the road.

The columnist complains about a 41-per-cent staff increase from 2006 to 2010. He leaves out that BC Hydro hired 650 engineers for transmission and generating projects and another 400 employees were added to BC Hydro’s staff list when BC Transmission Co, by legislation in the Clean Energy Act, had to remerge with BC Hydro.

Mr. Fletcher suggests by his careful construction of sentences, that the “luxuries” of lavish management bonuses and union overtime pay do not exist “in private companies that have to compete in today’s ruthless marketplace.” He should visit an oil company’s head office in Calgary.

The reader is led to believe, again by wording, that only union members are paid overtime pay. By legislation, all workers in B.C. below management level are entitled to overtime pay when overtime is worked.

The columnist notes that engineering innovations are encouraged in the private sector and prevented in the public sector: many engineers go from the private to public sector (and vice-versa), and it is doubtful they park their initiative at the public sector’s door. Does not this complaint show that it is the government’s structure and culture that is different, if not faulty?

Mr. Fletcher ignores mentioning that BC Hydro must buy power from IPPs other than to bash something called the NDP’s union-approved talking points.

He did not mention that BC Hydro loses money on its electricity purchases it has to buy from the IPPs. In addition, BC Hydro also had to sell IPP power on the open market at prices below its purchase price.

Much of this IPP power is produced during the spring runoffs, a time when BC Hydro also has high generating capacity, as its reservoirs are full. So BC Hydro is forced, by legislation, to buy this power from the IPPs and sell it at lower rates on the spot market.

And the way it is set up, this loss on purchases from IPPs will worsen: BC Hydro’s current standing offer program’s call for power is set at 12.4 cents per kilowatt hour. This is the huge factor that is forcing BC Hydro to want to raise their rates to us.

The Liberals say they understand business. Business people and people who understand business do not intentionally sign contracts where they will lose money, unless they are under duress, very stupid, or there is an ulterior motive.

Dennis Flynn,


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