The previous provincial government pressured BC Hydro into signing long-term contracts with private power providers that will cost customers more than $16 billion over 20 years, a new report has claimed.
Ken Davidson, a former B.C. Treasury Board director, delivered his report – “Zapped: A Review of BC Hydro's Purchase of Power from Independent Power Producers Conducted for the Minister of Energy, Mines and Petroleum Resources” – on Wednesday.
He alleges the previous BC Liberal administration “manufactured” an urgent need for electricity while barring BC Hydro from producing it.
That forced the Crown corporation to buy power from private providers at inflated prices, according to Davidson’s report.
The average residential BC Hydro customer will be about $4,000 out of pocket over the next two decades, it is claimed, or about $200 every year.
The report also claims the energy bought from private producers was largely of the wrong type.
Of the 105 contracts negotiated with independent producers, 71 were run-of-river projects – most of which are only reliable in the spring.
The report stresses that BC Hydro does not require additional power during the spring because demand is lower and reservoirs are full.
"British Columbians are paying more on their hydro bills because of the previous government's choices," said Michelle Mungall, Minister of Energy, Mines and Petroleum Resources.
"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."
Mungall added: "B.C. didn't benefit. BC Hydro customers didn't benefit. A small number of well-placed independent power producers benefited, and customers were stuck with a 40-year payment plan.”
The report recommends a series of fixes to the problem, including ensuring all energy is bought at the appropriate market rate.
It also suggests eliminating the self-sufficiency mandate and allowing BC Hydro to rely on supply from outside the province.
To read the full report, click here.
