BC Hydro facing billion-dollar loss, NDP claims
Published Monday, February 4, 2013 10:05PM PST
VICTORIA -- The NDP is warning British Columbians to brace for what he's calling rate shock on their electricity bills, but Energy Minister Rich Coleman said Monday the Opposition is getting too far ahead of itself.
Coleman said NDP energy critic John Horgan has taken a picture of today's situation at Crown-owned BC Hydro and projected it out four years without considering market forces that are known to fluctuate, especially when it comes to energy.
"John's just taken a snapshot today and is saying nothing's going to change," he said. "I guess he's saying nothing's going to change in the economy or the need for power in British Columbia and nothing's going to change in Alberta, Washington State or the rest of the California market, but it will."
Horgan said Hydro documents released last week as part of the Crown corporation's environmental impact statement for its proposed $7.9 billion Site C hydroelectric dam in northeastern B.C. indicate years of financial losses precipitated by expensive power contracts with independent power producers and low selling prices for power.
He said the current surplus power supplies, coupled with the low prices and a projected four-year loss of more than $1 billion, signals higher power rates for British Columbians.
"Over the course of the next government, BC Hydro will lose over $1 billion," said Horgan. "That's a tragedy for BC Hydro and it's a calamity for ratepayers who have already seen their rates go up in the neighbourhood of 36 per cent over the past number of years."
Horgan said the Site C environmental impact documents filed last week by Hydro to federal and provincial environmental agencies reveal the utility will lose almost $300 million this year.
He said Hydro's environmental documents show a projected power surplus this year of 5,200 gigawatt hours and a surplus of 5,500 gigawatt hours in 2015.
The Site C dam, slated to be in operation by 2021 if approved, will generate 5,100 gigawatt hours annually.
Horgan said the Liberals signed 20-year contracts with independent power producers to purchase power at $94 per megawatt hour, but Hydro forecasts the sale price at $37 per megawatt hour, a difference between the purchase and sale price of $57 per megawatt hour.
"We've been buying high and forcing Hydro to sell low," he said. "We've got more power than we could give away."
Horgan said if the New Democrats win the next election, British Columbians can expect a complete review of the Crown corporation. Many projects underway should expect to be halted until a new government determines Hydro's financial status, he said.
Horgan said that includes Site C, which can expect to be delayed for a least two years and perhaps a decade, if the NDP forms government.
Coleman said Site C should proceed because the ability to supply clean, stable power attracts investment.
"Long-term, that is firm power that would be there for British Columbia to be able to be a major competitor for electricity in North America, but also to attract future investment," he said.