Liberal Private Hydro Plan Threatens Rate Hikes, Loss of Control

Despite refusing to admit it’s selling off BC Hydro, the BC Liberal government is preparing to sell off power transmission systems and turn of over power supply control to an integrated private grid with the United States.

That has labour and consumer groups predicating substantial rate hikes and a decline in power security and access, and this is especially galling in the wake of the massive power blackout in central Canada and the US east coast that left millions of people without electricity.

“If implemented, the BC Government's Energy Plan will result in BC Hydro ceding control of our transmission system to a private sector consortium of U.S. utilities. In the process, British Columbians will lose the ability to plan the system to meet the needs of BC businesses and citizens as a first priority,” says John Young, of the BC Citizens for Public Power, a large ad hoc coalition of BC residents and organizations formed to block the Liberal regime’s sell-off the public power utility.  “By needlessly making our transmission system subservient to U.S. interests, the Government is, once again, making an enormous public policy mistake as a result of blind ideology.”

 

He points to the Liberal government’s termination of the Hydro rate freeze, implemented by the NDP government in 1996, and the first step in the process of taking BC’s power generation and transmission systems out of public hands and turning them over to corporate control.

 

Despite it’s announced plans, and recent privatization a move, the government still maintains it isn’t privatizing BC Hydro, and no power hikes are planned.

 

“The province's new energy plan is designed to increase investment in the energy sector and maintain low-cost electricity and public ownership of BC Hydro,” says the government statement of its recently released provincial energy plan. “The plan encourages investment in energy development, including oil, gas, coal, coalbed methane, and "clean" (alternative) energy sources; retains public ownership of BC Hydro's reservoirs, wires and dams…”

 

However, that same plan, contrary to its introduction statement, admits that the electricity delivery systems, supposedly to remain in public hands, are being carved off and place under the jurisdiction of a separate corporation, called the as Regional Transmission Organization that is not regulated by BC Hydro and which critics charge is already being considered for privatization.

 

“RTO West is being created as an unhappy compromise in a badly organized and unreliable system of private utilities in the western U.S. Recognizing that their patchwork system was ineffective, the utilities reluctantly adopted a management model to try to overcome some of the problems resulting from the status quo,” Young says. “By agreeing to become subservient to this strange collection of private interests, the BC Government is gambling unnecessarily with the security and stability of BC's energy future.”

 

Despite the government’s insistence that rate hikes are not on the agenda, its own power plan may indicate it is a serious option.

“The current rate freeze (ended) on March 31, 2003 and will not be extended. Rates will again be regulated to cover the projected demand, transmission congestion, competitive supply costs, and market developments in the United States.”

That spells rate hike, say observers, since the market development in the US, which are mainly influenced by privatization and deregulation of energy services, have meant huge price increases for consumers, accompanied by large-scale service disruptions.

Malcolm Metcalfe, a consulting engineer with SEMPA Consulting, a BC based firm, says BC Hydro as a public utility, is a highly efficient energy producer and distributor, which has remained highly profitable by being able to sell large quantities of power to the US for modest rates, while simultaneously offering among the lowest energy rates in North America to BC residents and businesses.

He adds the Liberals’ energy plan completely negates these successes, since clearly private for-profit energy firms simply have failed to provide similar energy supplies in as cost effective and secure a manner.

"BC Hydro has always provided a secure, stable supply of power for all British Columbians. That's because our electricity system is maintained with great rigour and expertise built over forty years,” Metcalfe said. “As an engineer and former employee of BC Hydro, I know that our public system is unmatched anywhere when it comes to reliability, and this reliability must be maintained. If we go down a path that leads to dozens of private U.S. utilities controlling our transmission destiny, we will increase the risk of blackouts and system failure for all British Columbians,"

That risk is being taken more seriously by public interest groups since last week’s huge blackout, for which authorities are now blaming on poor maintenance energy transfer switches and lack of accountability of private energy firms, in particular the US-based firm First Energy.

"Just look at what happened throughout Ontario and ask yourself if it really makes sense to deliberately destroy a highly stable system in return for one that brings all of the risks of Ontario's disastrous approach to electricity restructuring,” said Jim Sinclair, a Director of BC Citizens for Public Power and President of the BC Federation of Labour.

“The answer, of course, is that it makes no sense at all. The BC Government should abandon its plans to make our transmission system a creature of RTO West and focus instead on preserving and enhancing the excellent asset that the citizens of British Columbia know as BC Hydro.”

 

Despite the Liberals’ assurances during the 2001 BC election campaign that BC’s electric utility would remain in public hands, the regime has pursued a similar course, starting with the sale of BC Hydro’s marketing and customer services to the giant Accenture Corporation, formerly known as Arthur E. Anderson Ltd, which was associated with the collapse of the Enron corporations in 2000 and the resulting mass power failures and huge rate hikes in California.

The Citizens for Public Power is challenging the sale in court as a breach of public trust.