Private power porjects a failed experiment

Eye View

by David Charbonneau

Private power projects a failed experiment

May 13, 2010

The B.C. Liberals' plan to develop Site C is an admission that their privatization plans are not working.

When elected in 2001 Premier Campbell's words didn't match his actions. Despite pledges to protect the "jewel" in the province's Crown corporations he began to hack and hobble BC Hydro. One-third of BC Hydro's workers were transferred to the private firm Accenture. Electric transmission lines were removed from BC Hydro's authority to the newly-created BC Transmission Corporation.

Instead of being rewarded for providing the cheapest and greenest electricity in North America, BC Hydro was punished with a 50 per cent staff reduction and prohibited from what they do best: building new generating plants.

The hopes for new electricity were placed in the hands of private developers. In 2002, then Energy Minister Richard Neufeld announced that "Private developers, including independent power producers (IPPs), will be key partners in the province's energy future." IPPs were the key to energy self-sufficiency. Private developers would shake us from our bureaucratic stupor. With sheer willpower and entrepreneurial spirit, they would fuel the engines of prosperity by converting biomass, coal, run-of-river hydro, waste heat and wind into electricity. The future was so bright we had to wear shades.

Now that the shades are off, the flirtation with IPPs seems ill-advised. Some of the most promising run-of-river sites have been ruled out as too remote and expensive, or in the middle of B.C.'s rugged parks. The ones that have been built suffer from lack of storage and only produce significant amounts power in the spring.

More critically, private producers have not delivered what B.C. needs most - - storage capacity. Stored electricity behind hydro dams is critical because it provides the ability to fill in the gaps between the highs and lows of consumer demand. We import electricity, not because we are short but because it makes more sense to buy electricity at night when the cost is low and sell it when the price and demand is high.

The future, as seen eight years ago, included the private small-scale hydro and natural gas turbines close to the load to reduce transmission costs. Now we have hardly any private hydro and gas generators with significant storage capacity.

Failure of the government's plan has forced the opposite: a large publicly-owned hydro dam far from the cities it will serve. To carry the electricity over long distances, new transmission lines will need to be built by, guess who, BC Hydro. The cost of this huge project will be carried by taxpayers.

Private generators do have a role to plan in B.C.'s future. City dwellers could sell surplus electricity from roof-top solar cells or from the batteries of plugged-in electric cars to BC Hydro. Wind farmers and environmentally designed run-of-river projects could do the same. A cottage industry of electricity generators has a place in our energy needs but major private projects are limited when it comes to raising capital, especially when returns on investments are decades away. Only governments can finance the billions of dollars required for massive storage projects like dams.

Campbell's Liberals could have saved us a lot of time and money by letting BC Hydro do the work in the first place. It's now dawning on his government that public utilities are not only an efficient venture; they are a source of money to run government. And to keep the money flowing into government, our hydro bills will be going up nine per cent.

Does this sound like a tax to you? If we pay more for hydro and that money goes into government, it's hard to call it anything else. Don't get me wrong; taxes are necessary to operate the kind of place we want to live in but it's disingenuous for the government to pretend that it's lowering taxes when hydro bills are rising, health care premiums are increasing, carbon is being taxed, profits are being skimmed off ICBC, ferry rates are up and the HST is being implemented.

As well, it was disingenuous for the Liberals to claim that IPPs were needed to meet our energy needs when we are not short of energy at all. Shortage was used as an excuse for the Liberal's failed ideological experiment.

Regrettably, it will take more than this sudden reversal to restore the luster to the jewel in the crown.

David Charbonneau is the owner of Trio Technical.
He can be reached at dcharbonneau13@shaw.ca

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