BC consumers will pay for radical overhaul of BC Hydro

Study warns of plan to hand operation of BC electricity transmission system over to U.S. agency without public discussion
April 24, 2003

(Vancouver) The BC government claims that changes to BC Hydro under its new Energy Plan are relatively minor. They are nothing of the sort--the changes will radically and irrevocably change the nature of BC Hydro. That's the conclusion of a new paper by SFU professor Marjorie Griffin Cohen entitled Gutting a Power House: BC Hydro and the new Energy Plan, released today by the Canadian Centre for Policy Alternatives.

The most striking of the study's findings is that the operation and control of the BC electricity transmission system is being handed over to a U.S. organization--RTO West. "This is a stunning development," says Cohen. "Transmission will no longer be part of BC Hydro, but will be a completely separate legal entity--the BC Hydro Transmission Corporation--which will own the transmission lines and will collect rents associated with this ownership, but that is virtually all it will do. RTO West will not only decide who has access to the transmission system, but will also decide all prices paid on the system and the nature of all future investment. We are handing control of a major BC public asset over to a U.S. entity, yet the public is largely unaware of this change."

"The changes to BC Hydro--some of which have already occurred and some of which are awaiting legislation--will mean higher electricity prices for both residential and industrial consumers of electricity in BC, and an expansion of dirtier forms of generation," says Cohen. "That's because our entire electricity system is being re-oriented toward the export of electricity to the U.S. This will prove profitable for some private power producers, but it means BC consumers will be competing in a North American market for their own power, and it represents the loss of what has been a major advantage for the BC economy."

Under the Energy Plan, all new generation facilities will be built and owned by private companies. But as the paper documents, the public will continue to provide substantial subsidies to these private producers. "Private producers are being enticed with million of dollars worth of subsidies, yet the public will not own the resulting assets."

"As we have seen in Ontario and Alberta, the main risk associated with relying on the private sector for new electricity is to the security of supply," says Cohen. "Unless prices rise considerably, there is no reason to assume the private sector will adequately invest in new generation for BC's future needs."

The paper warns that, if the plan proceeds, "The Crown Corporation that is called BC Hydro will bear little resemblance to the utility that has served the needs of British Columbians so well. Yet these fundamental changes are occurring with virtually no public consultation and no meaningful discussion."