Monday, December 6, 2010

During our distraction

The BC Liberal Party continues its wealth redistribution program, the one taking money from the pockets of every citizen in the province to enrich their friends, the brave entrepreneurs in the risk free, profit-making enterprise of producing electricity using public assets and selling that electricity to the public at prices more than three times market value, perhaps more.

While opposition dissidents were focused on bringing down Carole James, John Horgan, the NDP's critic for BC Hydro was talking about electricity rates, and giving us this news: Consumers hit with 50 per cent hydro rate hike under B.C. Liberals’ energy scheme.

You can read Horgan's press release for details but these graphs shed light on the news. BC Hydro is forced to purchase electricity from private power producers scattered around the province. To ensure those enterprises are handsomely profitable to their owners - needy companies such as General Electric - BC Hydro pays far more than the power is worth, either in the monopoly domestic market or the loss inducing export market. American consumers are putting in place their own cheaper options and are not now willing, nor will they later be willing, to buy BC Hydro's new power at the prices arranged. These are more than double present new power costs in the USA.

The graph shows the average purchase price for the most recent round of private energy buys, along with the price BC residential consumers presently pay (far more than industrial users) and the recent average price on the spot market in the Pacific Northwest.
With recently announced increases to residential rates for three additional years, BC Hydro rates will have risen more than 50% in five years. This is brought to us by the politicians who have frozen the minimum wage for a decade and whose existing policy is to continue that freeze forever. This graph demonstrates the average cost of residential electricity, along with a line showing the planned minimun wage level.

Despite high prices to private power producers, today's deals are further sweetened through price escalator clauses that ensure prices continue to rise. BC Hydro's generation cost is 2.5 cents per kilowatt hour (kWh) at its existing "heritage" hydroelectric facilities. Had W.A.C. Bennett's government made deals similar to the Campbell government, we might be paying monthly power bills to General Electric that are three or four times present amounts. As it is, the citizens of BC, who borrowed the money to build dams in the sixties and paid once for their capital costs, gain the benefit of public power generated in publicly owned rivers in perpetuity or until dishonest politicians privatize these assets for reasons of efficiency.

In 2005, a BC Liberal panel chaired by Barry Penner spoke of the wonders of new energy sources. The BC Sustainable Energy Association promised as many as 400,000 new jobs as British Columbia became "a global hub for one of the largest market opportunities in history," The association executive director said, "Everyone who pays a BC Hydro bill would pay an extra, say, half-cent per kilowatt hour which supports the development of new emergent technologies,"

Anyone care to examine those five year old promises? Four hundred thousand jobs? World leadership in new energy technology? All for the cost of half a cent per kilowatt hour? Well, no. Not even close. Rather, we look at a few handfuls of permanent jobs with near zero advances in original energy technology and zero progress in becoming a "global hub". Incidentally, many of the "low impact" sustainable power projects cause widespread environmental impact with construction of dams, spillways, river diversions, generation, distribution and service facilities. Also, large areas of wilderness have been blocked from public use.

And the half-cent per KWh? The residential rate increases will soon be more than ten times that amount. But clearly, a few people have profited well, including Paul Taylor, Gordon Campbell's new Chief of Staff, who left government and stopped being a "blabby deputy minister" long enough to earn 7 figures in the private power industry. Naikun Wind blessed Taylor with a buy-out of $665,000 in 2010, a move that made him available to rejoin government and partner with old friend Gordon Campbell in Victoria. As in nature, the cycle can begin again.

Of course, a few higher-purpose-people believe we should pay even higher residential rates for electricity.  People like former environmentalist Tzeporah Berman argue that cheap power is a curse for residents and industry alike. They want to see dramatic additional price increases for consumers.
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12 comments:

  1. John Horgan seems to be a pretty smart guy; I am impressed with how he handles himself.

    Think he can be leader, Norm?

    I do.

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  2. I rate Horgan as a strong prospect for NDP leadership but don't know him well enough to judge accurately. I'll start reading through his website a little more frequently.

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  3. I think the post might have been truncated. Theres a "In 2005, " at the end...

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  4. He's my MLA Norm, very good guy. Always replies to my questions and concerns personally and thoughtfully. He's bright, funny and not afraid. I would actually join the party if he led. Assuming a few questions that remain are answered. Public Inquiry into BC Rail. Public Private Partnerships get suspended and audited. Etc...

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  5. Thanks for pointing out Ms. Berman's opinion on cheap power. That is what the Green Party wants, for it to cost a lot. People don't matter in their equation-I guess we should all just sit and freeze in the dark and for a special treat turn on the stove for a Sunday dinner.

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  6. As to:

    "While opposition dissidents were focused on bringing down Carole James, John Horgan, the NDP's critic for BC Hydro was talking about electricity rates, and giving us this news: Consumers hit with 50 per cent hydro rate hike under B.C. Liberals’ energy scheme."

    While the statement above is not inaccurate, the part I bolded seems little more than a gratuitous slam at the dissidents and an implication that really Carole James should be allowed to keep losing elections to the CCF (Campbell Crime Family) until she gets bored or dies.

    The fact is that people like myself, Peter Dimitrov, Eloise Charet and even Scott Simpson, who somehow manages to get published in Postmedia BC Liberal Propaganda sheets, have been screaming about this for years yet we've heard NOTHING about this clear cut stoooooopidity from Carole - perhaps due to her efforts to court the very pirates that have been plundering the province.

    The closest she came during the last campaign to even addressing this IPP outrage was the infamous attempted flight to Toba Inlet(I think it was Toba - but it may have been another disgrace on the central coast) that she managed to let be turned into a laugh fest because her plane got caught in bad weather. That incident alone was a glaring example of Carole's inability to control and capitalize on her own message and illustrates why the BC Liberals are pooping their pants today because the BC NDP is looking much more threatening already simply because there will be a new leader, not to mention a wide ranging discussion of the real issues that normally accompany a leadership race.

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  7. Koot, my point is that the Official Opposition has performed poorly. I don't blame only Carol James for that performance. It arises from a few factors other than leadership. Insiders sat on their hands through the past years and made this move only once Campbell's shoes were set in concrete. They ignored scheduled moments accorded them as members and waited for the opportune time of highest leverage. You can bet they did not play as enthusiastic members of the NDP until October, then change. That partly explains the poor performance of the whole opposition. Example: Leonard Krog's wimpy functioning as AG critic. Maybe, now we see why he was sitting on his hands. This whole affair demonstrates NDP has not been ready to form government. I doubt voters' minds will change soon enough to prevent the new Liberal leader from scoring a quick election victory. The efforts of the citizen opposition will have been wasted.

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  8. I think the memory of Campbell and the BC Liberals, is going to stick for a long long time. I will never forget, nor, forgive their treachery towards the BC people, ever. The damage to this province, the BC Liberals stowed upon us. Who in the hell can forget it? How about, De Jongs blatant cover up of, Campbell's corrupt sale of the BCR? The gall of him, stealing the money of the tax payers, to pay the entire dammed shot, because, Basi and Virk were to be taken care of, if they kept their mouths shut. BC is the most corrupt province in Canada, thanks to the corrupt BC Liberals. Good God!! The entire scurvy lot of them, should be run right out of the country. I am forgetting, nothing.

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  9. "Koot, my point is that the Official Opposition has performed poorly. I don't blame only Carol James for that performance. It arises from a few factors other than leadership."

    I don't see how your point is much different than mine. However, when you have SEVEN years of ineffectual opposition on top of two lost elections - one of which took real effort to lose - don't you think leadership should be an issue.

    I agree, Krog is especially useless as Justice Critic, and I would be in favor of recalling him as well as most Liberals. Dix as health critic can't seem to even pay attention to outrages in the health care system for more than a day and so on down the line. I attribute it to too much emphasis on "playing nice" and courting the same business robber barons than have been robbing us blind for a decade.

    As leader Carole James should have demanded her MLAs be accountable for holding the government to account - not accountable for not supporting her leadership. If leadership ain't supposed to set the tone and the course what the hell is it, just a bigger pay cheque and ultimately a bigger pension?

    I also thought she wasn't particularly gracious in her resignation, it sounded to me like all her problems and the party's were everybody else's fault - not a Mike Harcourt by any stretch of the imagination. This doesn't mean I don't believe she can serve a valuable role in government should she so choose.

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  10. We're not that far apart in conclusions. I agree that James needed to resign at this moment. However, it points out the need for a party to have a legitimate discussion about leadership regularly, probably every year. Now, all they have are proforma votes at convention where everybody is told they must "vote in favor or else destroy the leader and the party."

    A new leader will not be able to proceed without change to the current situation. Thirteen NDP members ignored the party's rules to force James out. Is that the new method for changing leaders or will the party vote on comprehensive change along with a new leader?

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  11. My computer didn't work when I tried to comment on the recent article about Hydro rate increases.

    I just wanted to add a few points:

    1. The Clean Energy Act forces BC Hydro to have a big surplus of power every year. This is the self-sufficency and 'insurance' policy. Former Energy Minister Blair Lekstrom said there was risks to this policy.

    2. IPPs get 'green' subsidies from the Federal govt, for $millions.

    3. I believe that a lot of the new infrastructure to be built by BC Hydro has to do with accommodating all the new IPP power.

    4. It appears BC Hydro has been hiding its losses, by putting its expenses into deferred accounts. It says it had a profit in 2010, but actually had a loss. Island Tides has several articles about this.

    http://www.islandtides.com/assets/reprint/bchydro_16092010i.pdf

    Thanks!

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  12. I see that you have a graph for 2009 - 2014 for hydro rates, but was curious to know if you knew what it looked like over a longer past... like the last 20 years.

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