Friday, January 1, 2016

Takin' Care of Business

These charts demonstrate that rewarding influential friends and caring for business is a prime BC Liberal purpose.

Despite a decade of flat domestic demand, BC Hydro continues to add unneeded capacity and increase purchases from independent power producers. The utility not only buys more from IPPs, it pays more, up to 5 times Northwest Power Pool (NWPP) market prices.

However, because BC Hydro sells electricity to heavy industries for less than it pays independent power producers (IPPs), residential users and taxpayers must make good the losses.

BC Liberal schemes have cost billions of dollars already and will cost citizens tens of billions more.


So, if demand for electricity is flat, even declining, why is BC Hydro paying more than a billion dollars a year for power from independent producers? Without domestic demand growth, increased purchases from IPPs result in idling of existing BC Hydro generating capacity. Yes, that's the cheap power we could be enjoying today.



During the period that BC Hydro was paying IPPs about $90 per MWh, the market rate for power (MID C) was between one-fifth and one-third of that price, even after accounting for exchange.


Note: The figures shown shown here are extracted from BC Hydro's annual and quarterly reports.
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8 comments:

  1. You talk about power, but the title says 'Business'...
    So I'll just mention the BILLIONS in debt that the BC Liberals are hiding there.

    Kelowna ran their local power utility into the dirt by ignoring basic maintenance, and then sold the thing dirt cheap. Poor souls had to go en mass to seek chiropractic help they were so bent from self congratulatory back slapping on the wisdom of their business acumen.

    Penticton is too frightened to allow local utility reports into the open, though the local gossip is that council will flog the utility cheap to connected friends - just like they have with the local parks sales.

    The only way these right wing hucksters could run a lemonade stand is if they stole the lemons first... then they'd still loose public money while pocketing mad cash on the side.

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  2. Looks as if someone is using BC Hydro as a "slush" fund. Some thing that is well known of in third world "regimes." Sadly, this is a supposed North American, Parliamentary Democracy, not a third world "corrupt dictatorial government. The taxpayer in this province, should be wound up and dialed into the "extreme anger" mode. The case can be made. Theft, what else is it? Excuses?Watch them squirm when the taxpayers begin to launch legal challenges, and class action suits. Its about time people, its a new year, time for a new approach to these malfeasants. Organize and get real focused...on removing the miscreants from power, and preferably having them jailed.
    I've had enough, have you?

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  3. Interesting post. As you say, on the face of it, it's ridiculous to pay more for energy than the going rate, particularly if your basic system is hydro-powered to begin with.

    I used to work for NS Power many years ago, and the only people who really knew what was going on were the System Planning people. Energy production is not the only indication of a system's viability - peak demand is also important. If peak demand was about to exceed system capacity, then loads had to be turned off or "shed" in the idiom, even though averaged over 24 hours all the energy needs could be easily met by the system.

    Thus, if someone wanted to supply say 25 MW to the grid at the right time of day and could head off load-shedding, then there is a good reason to "overpay" for the energy received by paying a capacity fee as well, simply because it would defer having to add new plant at the utility level.

    I don't know BC Hydro's system, although I do know you plan to build further hydropower dams for some reason in the near future. There must be a reason for all this beyond what some politicians are saying - they are not bright enough to figure out how a utility system works in the first place as I saw many times.

    So your graphs do not tell me enough about system capacity and load to inform me whether paying IPPs a certain rate is economic or not.

    BM
    Halifax

    ReplyDelete
    Replies
    1. The graphs don't demonstrate that small independent power projects are troublesome for BC Hydro consumers. In addition to higher than market prices paid individual projects, BC Hydro pays substantial collection and distribution costs for electricity from these widely distributed facilities. In addition, the IPPs are typically hydro generators with little or no storage. A large portion of power produced is seasonal and often not in tune with demand cycles.

      Delete
  4. Yes, continued IPP purchases appear to be a breach of public trust. It's an evil thing: load the venerable Crown Corp ( which, prior to the BC Liberal economic perfidy, used to pump hundreds of millions of dollars into roads, schools, and hospitals) with an untenable amount of debt as prelude to privatization; and, typical of the BC Liberal crony-fringe-benefit plan, its insider friends will be favoured by ending the economy of scale we democratically voted for and enjoyed; and the privatization will be sweetened by a ready-made rationale for gouging the piss out of customers: the debt incurred by purchasing power from BC Liberal insiders who rate because they contribute to the BC Liberal party. Quite the system. Satan is proud.

    It's a clever ploy, maybe too clever to sue for breach of public trust. But I think the case is more convincing regards Site-C now its fundamental rationale has been totally nullified by the collapse of LNG prices---surely public money spent on something so plainly not in the public interest---also compounding the more subtle breach of trust with IPPs--- should warrant injunction, if not prosecution.

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  5. I really do believe that we have some of the stupidest people on the planet in the form of "conservative" voters who continue to prop up arguably the most secretive underhanded and yes corrupt government in Canadian history. When example after example after example of malfeasance miss appropriation and just plain dereliction of duty to British Columbians is starring them right in the face they resort to "if the commie NDP was in power they would destroy this province"! You people who support these Neo-Liberal vermin are the true "useful idiots" that Lenin was referring to and when Chirpy and the Fun bunch finally slink out of town we can get a true picture of the devastation they have wrought on our home , thanks to you their enablers. Of course this will never happen until we purge the mainstream media of their cheerleaders.

    ReplyDelete
  6. Note Hydro rate hike 4% for 2016, 3.5% for 2017:

    http://www.cbc.ca/news/canada/british-columbia/100-tax-payers-extra-canadian-taxpayers-federation-2016-fee-rate-hikes-1.3382894

    The $56 billion that BC Hydro owes to IPPs has to be paid somehow.

    And note this Vancouver Sun article from 2013, saying Hydro rates will rise by 45% when annual hikes are compounded over 10 years:

    http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=840ecfd8-8fa6-4812-8e7a-4b073ecda2e7

    Apparently, according to former energy critic John Horgan, those rate hikes do not reflect the cost of Site C.

    http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=840ecfd8-8fa6-4812-8e7a-4b073ecda2e7

    ReplyDelete
  7. And now Bill Bennett wants to reduce electricity rates to BC mines during these tough times. More corporate welfare loaded onto the backs of the overburdened taxpayer.

    ReplyDelete

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