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BC Hydro paid billions for power it didn't need at urging of former government, report claims

Last Updated Feb 14, 2019 at 9:55 am PDT

(Source: bchydro.com)

Report says BC Hydro procurement will cost you hundreds each year

Former Liberal government 'manufactured an urgent need for power' says report from energy ministry

BC Hydro was pressured to sign contracts for inflated prices, costing you thousands over two decades, says report

VANCOUVER (NEWS 1130) — If ICBC is a dumpster fire, what does that make BC Hydro?

A scathing new report claims you’re paying hundreds of dollars a year extra on your hydro bill thanks to mistakes by the former BC Liberal government.

The report from the province claims the former Liberal government “manufactured an urgent need for power” while at the same time limiting how the power provider could procure the energy, which artificially inflated the cost of power.

The bill totals $16.2 billion that customers will be paying for over the next 20 years, to the tune of $200 each year ($4,000 total per customer).

“They said that we needed all this power but they said that BC Hydro was not able to generate it … to meet the need, they had one place that they could go to, which was the private market,” said Energy Minister Michelle Mungall to NEWS 1130.

Mungall, whose ministry released the report, says the $16-billion figure is a conservative estimate and British Columbians have already covered off $3.2 billion.

“The BC Liberals were working for the benefit of their rich friends,” Mungall claimed.

“Professional staff within government and BC Hydro warned them against that course of action, but that government refused to listen. As a result, these contracts have already cost customers $3.2 billion and are set to cost billions more over the next two decades,” she said in a media release.

Mungall says there’s little the government can do and blames the BC Liberals for all of it.

Asked whether there is any plan to mitigate the impact this will have on individuals, Mungall said “We’re looking into that but the Liberals are very smart. They locked these contracts in.”

Energy ‘not actually required’

Former B.C. Treasury Board Director Ken Davidson compiled the 90-page report that claims the Liberals pressured BC Hydro to sign lengthy, expensive contracts with independent power producers.

He says the B.C. Liberal’s policy to make BC Hydro self-sufficient included blocking the power producer from expanding its own generating capacity or importing power to meet demands.

The government then re-calibrated BC Hydro’s energy plan to look like there was an urgent need for 8,500 gigawatt hours (GWh) each year.

That energy “was not actually required,” according to Davidson.

Still, the report claims BC Hydro was pressured to sign the contracts that will result not only in ratepayers footing a massive bill, but BC Hydro losing an additional $6.8 billion selling energy to you at a lower cost than it is buying it from IPPs.

Report recommends reversal of ‘self-sufficiency’ mandate

Davidson, who worked as director in provincial treasury and treasury board staff from 1989 to 1997 makes a number of recommendations in his report, including new contract renewal practices that would allow BC Hydro to make offers to purchase energy only at the market rate.

He also recommends reversing the BC Liberals “self-sufficiency” mandate that he says interfered with the energy planning process.

Finally, the British Columbia Utilities Commission (BCUC) should have its mandate of oversight restored “to protect the interests of ratepayers,” Davidson said.