A guest column by MLA John Horgan (Juan de Fuca),
Official Opposition Critic for Energy
Most of us spend little time thinking about where our electricity comes from or the policies and politics behind it. We just flick on the switch and the light goes on; we turn on the tap and the water is hot.
British Columbians are fortunate to have an abundance of natural resources, including our access to clean, reliable electricity. Over ninety-three per cent of the province’s electricity comes from hydro, an enviable position in an emerging carbon-constrained economy.
But how much longer will we be able to maintain that position?
Over the last decade the BC Liberal government has undermined much of what made BC Hydro a dominant utility in North America. In doing so they have undermined our province’s competitive advantage of low-cost, low-carbon electricity.
Ratepayers expect decisions involving BC Hydro will be made in the public interest. Unfortunately, BC Liberal energy policy severely restricts BC Hydro from building new generation, forcing the crown agency to purchase power from private for-profit companies at inflated prices. The policy also prohibits BC Hydro from storing water and purchasing electricity on the open market when prices are low.
This already bad directive was made worse by the Liberals’ “Clean Energy Act,” which formalized an artificial “self-sufficiency” requirement defined by a 50-year drought water level, plus a massive insurance requirement of an additional 3000 GWh. With these directions from the Liberal government, BC Hydro signed long-term contracts for this power at locked-in, take-or-pay rates that are many times higher than the spot market price for freshet power.
We saw the ultimate result of these deals last spring, when we lost at least $180 million dollars with BC Hydro buying private power at a cost averaging $68/MWh, when the average open market price averaged $10/MWh. Worse, much of that seasonal power wasn’t even needed to meet demand. At a time when we were spilling water over the top of our publicly owned Peace Canyon dam, we bought private power at almost seven times higher than the market price.
This kind of instability is not good for British Columbians or BC Hydro. More troubling, the Liberal policy centralizes decision-making with politicians in the cabinet and cuts the independent BC Utilities Commission out of the loop.
These Liberal policies have undermined the BC Hydro work force, dramatically increased debt and deferral accounts and has resulted in double-digit rate increases on hydro bills. It’s a lose-lose situation.
BC New Democrats are working on a plan to restore confidence at BC Hydro and ensuring that all British Columbians continue to benefit from a strong public utility.
Four main principles should guide energy policy: Put conservation and environmental protection first; maximize the public benefit by encouraging community-based energy solutions that create jobs, economic development and revenue for social programs; keep a strong BC Hydro at the centre of renewable energy development and generation; and keep rates affordable for both industry and consumers.
BC Hydro has been put in a very precarious position by the constant political meddling and poor decision making that has been the hallmark of BC Liberal energy policy.
Putting our provincial utility back in order will be one of the highest priorities of an Adrian Dix New Democrat government. We will open the books, bring back the oversight role of the BC Utilities commission, and do our best to mitigate the impact of contracts the Liberals signed that are not in the public interest.
We understand the vital role that BC Hydro plays, not just in delivering clean, reasonably-priced energy to BC families, but in promoting industrial development and in making our province an attractive place to invest.
From the very beginning it was clear that the Liberals didn’t understand how vital it is to maintain BC Hydro as a strong public electricity utility.
New Democrat leader Adrian Dix is offering a change for the better, one practical step at a time.
We know government can’t do everything, but it has to get the fundamentals right. That means putting the needs of British Columbians before narrow political interests, and making sure everything we do is aimed at making life better and more affordable for our citizens.
LU258 IBEW thanks MLA Horgan for this Guest Column that appeared in the December 2012 issue of the Hotline.