Tag: Power Generation

IN-SIGHTS: Dam lies

Mark Jaccard, recently appointed Chair and CEO of the BC Utilities Commission, argued in 20017 for Site C, when BC could have stopped the project and saved about $15 billion. Jaccard said that supporters of other renewables did not account for dispatchability, which he claimed was a key obstacle to

Continue reading

In-Sights: Careless or captured? (A 2009 repeat)

When you read or listen to resource industry advocates, especially ones masquerading as objective political pundits, compare their concerns in 2009 about burning natural gas to generate peak-demand electricity to their current attitudes toward burning natural gas to liquefy natural gas. The following was first published at Northern Insight on August 4, 2009.

Despite deep cynicism about those backing Gordon Campbell’s Liberals, I’ve long held respect for the writing of Vaughn Palmer. My reservoir of appreciation seems now to have run dry. He has been bright, skilled and articulate, usually worth reading throughout 35 years with the Vancouver Sun.

Now, I don’t know. Is he distracted, overburdened, grown careless or captured by his subjects? What can explain Palmer’s early reporting about the British Columbia Utilities Commission decision on BC Hydro’s 2008 Long Term Acquisition Plan.

July 31, on his regular Vancouver radio outing, he led with this:

“I think it means the BC Utilities Commission is out of touch. You know, they said, “We’re not persuaded we need all this new green power because you’ve got the Burrard Thermal Plant sitting out there in Port Moody and it could run full time and take care of your power needs for many years.” Which, is completely out of touch. … the Utility Commission’s belief that the Burrard Thermal is the answer to any of the province’s power needs for the future just ignores its impact on air quality among other things.”

That is not merely weak reporting of the Commission’s determination. It is a reprehensible misstatement that totally fails to reflect the actual decision. I can think of only two possibilities. One is that Palmer had not read the report but relied on someone’s corrupt précis. The other is that he intentionally misled the audience for some purpose.

Sidekick Keith Baldrey, also of Canwest Global, contributed:

“And, that’s why I don’t understand why a number of environmental groups who are applauding this decision have remained silent on the fact that Burrard Thermal is to be relied on at an increasing rate because it produces dirty energy. That’s a contradictory and hypocritical position and a number of people haven’t really squared themselves with that.”

No Keith, the BC Utilities Commission simply didn’t say that.

Palmer subsequently shifted his attack, all but accusing the BCUC of joining forces with uninformed racists:

“You know, that bit about the First Nations – I mean think about this for a minute – if we go out and get public opinion on First Nations, one of the first things you hear from people is, “You know, they always want a handout from the government, they’re always taking government money.” You know, here you got a bunch of First Nations in British Columbia – some of the best led native bands in the province – gone out and they’ve found private partners to develop their own resources on their own traditional territory and the big provincial government regulator has slammed the door on their face. I mean, it’s no wonder that they’re feeling frustrated.”

Baldrey added:

“. . . these independent power projects have as economic partners First Nations groups. These are a huge economic development tool for impoverished First Nations and Vaughn and I were reading this morning, from the Sechelt Indian Band, a letter they’ve written the BC Utilities Commission accusing them of essentially, and I quote, “This appears to us to be nothing less than regulated racism.” So you’ve got First Nations now very much up in arms. With the stroke of a pen, the Utilities Commission has kiboshed what they saw as the number one tool to lift a lot of their people out of fairly extensive poverty and I don’t know if the Utilities Commission thought this through properly.”

I was interested to note that at 9am July 31, Baldrey and Palmer knew the contents of the Sechelt Band’s letter and were even armed with the pointed quote claiming “regulated racism.” Yet that letter was still warm from printing, being dated only one day before, July 30. I wonder how it came to be reviewed so promptly and publicly by the Victoria based journalists.

Was the Public Affairs Bureau (PAB) or the Independent Power Producers Association of BC (IPPBC) helping Chief Garry Feschuk and the shishalh First Nation circulate the letter? Were the flacks also providing pre-digested interpretations of the BCUC decision to certain journalists?

Palmer went on to provide a bit of accurate detail, saying the BCUC decision did not reject green power, private power or run of the river facilities and that, primarily, BC Hydro had to rework the scheduling of projects. Mind you, he ignored the BCUC determination that BC Hydro had been either inaccurate or dishonest in its power needs forecasting. That should have been news. At best, Palmer had part of the story correct but his headline material was worse than sloppy.

We cannot though accuse all professional journalists of faulty or inadequate reporting. Mark Hume at the Globe and Mail had no difficulty understanding the entire BCUC decision and writing conclusions based on the Commission’s actual findings. He said:

“The commission’s ruling made it clear, however, that there is no energy crisis – and that when there are energy shortfalls, such as during droughts or the period of peak demand in December, BC Hydro has a solid backup system in the Burrard Generating Station, an old, mostly idle plant fueled by natural gas.

“The commission is not saying we should run the Burrard plant, or that Burrard is a better source of energy than clean resources,” said economist Marvin Shaffer. What the commission determined is that Burrard is valuable as a backup facility, and that in that role it has the capacity of at least 5,000 gigawatt hours, not the 3,000 GWh estimated by BC Hydro.

“By refusing to accept the lower capacity, the commission called into question the need for BC Hydro to purchase backup power from IPPs.

“Had the British Columbia Utilities Commission not intervened, B.C. would have been damming its wild and scenic rivers, not in a noble fight against global warming, but in order to run air conditioners in California.”

Contrast that analysis to the one by Keith Baldrey:

“Yes, they (BCUC) just said go and use Burrard Thermal.”

One does not need to be a sophisticated media analyst to conclude that Canwest Global’s Palmer and Baldrey reported on the BCUC in a manner that is entirely below the standard set by Mark Hume. The Globe and Mail faces the same financial challenges as every newspaper publisher but in the western bureau, they employ and deploy high quality staff, particularly in comparison to the competition.

Continue reading

In-Sights: Reward without risk for worthless surplus power (2010 Repeat)

Checking up on Government

British Columbia’s government believes less in free enterprise than in assisted activities for approved associates. Entrepreneurs saw potential for a private power generation industry in the province but didn’t want to risk their own money. Instead, they arranged with the Liberal government for the public to accept all risks and guarantee substantial profits to the schemers.

This was done by designing long term (20-55+ years) power purchase agreements whereby BC Hydro is obliged to purchase power at values well above current market with prices additionally sweetened by annual consumer price index (CPI) escalators. To ensure a need for additional suppliers, BC Hydro was prevented from developing its own new sources. Will McMartin of The Tyee describes irony in the situation:

It is impossible not to see irony in how the City of Edmonton has unleashed its publicly-owned utility, EPCOR (and its subsidiaries) to expand operations and generate profits across North America, while the Province of British Columbia — under Gordon Campbell’s BC Liberal government — has stunted the growth of our publicly-owned utility, BC Hydro and Power Authority.

(Supporters of independent power production in this province often argue that BC Hydro staff do not have the skills needed to build and operate clean or green energy projects. Can it be true that Edmonton’s public-sector possesses the requisite skill-sets, but British Columbia’s does not?)

Clearly, Edmonton’s elected officials have not been frightened by the financial “risk” associated with public-sector power generation, transmission and distribution — the risk that Campbell, Jaccard and the IPPBC so loudly decry in our province.

Indeed, in BC Hydro’s most-recent clean energy call, EPCOR and its related companies continue to seek profit-making opportunities in B.C.

On March 11, an EPCOR-related entity, CP Renewable Energy (B.C.) Limited Partnership won a new, long-term energy purchase agreement from BC Hydro for a wind farm near Tumbler Ridge.

BC Liberals distrust the capitalist concept of competitive markets where rewards are associated with risks. Instead, they scrambled to eliminate energy investor downsides. That makes no sense in honest government. Of course, BC Liberal governments have been called many things, but never honest. Perhaps, the methodology is revealed. For some years, we were sold the concept of endless growth causing insatiable appetites for energy, leading to unrestrained demand and ever rising prices.

In 1980, oil was in short supply, line-ups formed at gasoline stations and pumps ran dry. Experts predicted that oil reserves would be exhausted by the turn of the century. Thirty year later, the end of oil is not in sight, except in the eyes of pessimists who have been predicting the demise of oil throughout their careers.

So it is with electricity. We remember frequent brown-outs in the USA although it turned out that the smartest guys in the room were playing games to manipulate prices. Nevertheless, deregulation and dishonesty meant higher prices and uncertain supply. Citizens were programmed to believe that energy prices would rise dramatically and power would always remain scarce.

That consumer conditioning presented a perfect opportunity for profiteers in British Columbia. However, while BC Hydro rushes to contract for more capacity, there is already surplus electricity that cannot be absorbed in the Pacific Northwest.  Two giants, Babcock and Wilcox and Bechtel, have teamed to complete development of a small light water reactor, a modular 125 MW system that might be a power industry game changer in a decade. Another company, Hyperion Power Generation (now Gen4Energy) claims its refrigerator-sized Mini Power Reactor, capable of powering 20,000 homes, will be soon ready to license. Japan and China are involved in advanced small scale nuclear generation programs. The BC Government is foolhardy to make 55+ year purchase agreements with automatic price escalators. The only thing certain about these provincial commitments is that they will create assured profits for the developers.

Today’s excess electricity is likely to increase in the short run even without nuclear creating a new market in the USA. Ted Sickinger at The Oregonian writes Too much of a good thing: Growth  in wind power makes life difficult for grid managers:

During the last three years, the building boom spawned by green energy mandates in Oregon, Washington and California doubled the generation capacity of wind farms in the region. By 2013, it’s expected to double again.

That seems like great news. Plenty of carbon-free energy with no fuel costs. Jobs. Property taxes.

In the real world, however, the pace and geographic concentration of wind development, coupled with wild swings in its output, are overwhelming the region’s electrical grid and outstripping its ability to use the power or send it elsewhere.

BC Liberals assume the grid will take all of the surplus power capacity they plan to bring on stream. Because wind generated or run-of-river electricity cannot be stored, the public will be stuck with high cost off-peak power that has no value. That is the risk the private producers didn’t want to take. BC Liberals took it instead and passed it to you and me, leaving the private producers with rewards without risks. The people stuck with the bills have no say.

Continue reading

In-Sights: Misappropriation of public wealth

Readers may tire of reports on BC Hydro but the more I examine this public utility, the more convinced I am that citizens of BC are victims of massive financial deception.

In 20 years leading up to 1996, BC Hydro’s average annual revenue from trading in North American electricity markets was $115 million. In three years ended March 2003, the utility realized gross trading revenue of  $11.25 billion, although that sum was tempered by the $1 billion or so BC Hydro paid to end a subsequent lawsuit by California.

Although the American power market had been manipulated by Enron and other criminal fixers, Gordon Campbell and his colleagues believed that British Columbia could become a permanent power supplier to the western USA. Liberals wanted the electricity to be created by private operators, but it was soon clear that private entrepreneurs were not prepared to take significant financial risks.

The provincial government was determined to proceed so it decided that BC Hydro would sign long-term contracts to purchase power produced by independents at prices that made projects attractive to investors. This effectively transferred all business risks from private operators to the public. While dumb, it’s a fairly common occurrence today when governments are keen to be seen as business-friendly.

Compounding the situation was the Liberals’ misjudgment of future markets because they didn’t anticipate improved technologies and growing availability and affordability of alternative power. Consumption efficiencies, declining heavy industries and falling costs of solar and wind permanently changed the energy industries.

BC Hydro has contracted with independent power producers for increasing quantities at prices adjusted upwards each year for inflation. But, domestic demand has been flat for a decade and the export market in the last five years has returned only 2.8¢ per KWh, a fraction of the 22.8¢ gained in the heyday of 2001.

Because it is buying each KWh from IPPs at over 9¢ but has no need for the total it must buy, BC Hydro is left with two choices. One is to generate less power in its own facilities and the other is to dump power outside the province at prices less than 1/3 of the amount IPPs are paid. BC Hydro is doing both.

I’ve had utility defenders argue the company has never reduced its own output to accommodate private power so I reviewed sources of power reports for more than two decades. Here is a chart showing the last five years under Premier Clark’ leadership and the five years between 1996 and 2001.

The situation is not improving. In FY 2015, BC Hydro facilities generated 41,443 GWh of electricity. In FY 2001, those very same sites produced 49,940 GWh, which is 20% more.

However, here’s a vital point. In 2001, BC Hydro had assets of $12.6 billion. In 2015, assets had grown to $27.8 billion. The company has been spending heavily, allegedly to make the system more efficient. In fact, what is continuing is misappropriation of public wealth for the benefit of suppliers, contractors and other BC Liberal friends.

Some people believe the government intention is to privatize BC Hydro. However, I believe the present situation, with another $10 billion of public funds being thrown at Site C, is working just fine for Christy Clark, her cabinet colleagues and their sponsors.

Citizens should be asking for explanations, from politicians and the pro-media journalists who choose to ignore these facts.

Continue reading

In-Sights: Who does the Government of BC serve? UPDATED

The material below was published June 21, 2014. Since this was written the proponents sold to an Alberta company that is financed by the Ontario Teachers’ Pension Plan, not exactly the mom and pop operations that were first described by Gordon Campbell’s IPP-promoting minions. We don’t know how much BC Hydro will be paying for the unneeded power but we know this intermittent supply is useless for the intended gas liquefaction plant in nearby Howe Sound. However, we do know some connected individuals did well on the flip. There is a pattern repeated with independent power projects in BC: politically connected dealmakers do deals, then disappear, cash in hand.

I believe the numerous Narrows Inlet IPPs demonstrate the worst of BC Liberal policies for energy. This unneeded, intermittent supply is destructive to the wilderness, rewarding to a few people and the public would have been better served had BC Hydro written them cheques worth millions to simply go away without touching the lands.

As a reminder of the absent need for more costly power from Narrows Inlet, I repeat these critical charts:


– – – – – – – – – – – – –
I wrote previously about Narrows Inlet, a wilderness area 60 kilometres by air from Vancouver. I repeat Joan and Soren Bech’s submission to the Environmental Assessment Office because it is articulate and it relates to a major theme at this blog. The theme is a rhetorical question, “Who does the Government of British Columbia serve, business interests or present and future citizens?”

Here is a map link to the area and a link to Northern Insight articles about Narrows Inlet.

March 2015, BC Hydro had contracted with independent power producers for $56,206,000,000 worth of power. Do we need it? Perhaps, so that we can provide equivalent amounts to mining companies and LNG operators at half the cost.

Continue reading