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From Policy to Power: Real Solutions for BC Hydro

From Policy to Power: Real Solutions for BC Hydro

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An alternative rate review of BC Hydro put together by BC economists and public policy experts.
An alternative rate review of BC Hydro put together by BC economists and public policy experts.

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12/22/2013

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FROM POLICY TO POWER:
REAL SOLUTIONS for BC Hydro
 
FROM POLICY TO POWER: REAL SOLUTIONS for BC HYDRO
TABLE OF CONTENTS
INTRODUCTIONby David Black, President of COPE 378BC ENERGY POLICY:THE NEED FOR CHANGEBy M. Shaffer, 2011POWER SURGE:THE ROLE OF GOVERNMENT POLICY IN BC ELECTRICITY RATE INCREASESBy J. Calvert and M. Cohen, 2011BC HYDRO RATE REVIEW REPORT DECONSTRUCTEDBy C. Fussell, 2011
 t     al     k  i     n  g  d   o  g . c  a
 
FROM POLICY TO POWER: REAL SOLUTIONS for BC HYDRO
The future of our public power utility, BC Hydro, is intimately connected to the
future of our province. For decades BC Hydro has efciently provided clean
affordable power for communities across British Columbia and for export in order to keep rates low for families.But the provincial government’s policy started to shift with the introduction of  the 2002 Energy Plan. Government began pulling B.C.’s crown utility back frombuilding new sources of electricity, leaving BC Hydro with only upgrades to existing dams and Site C, and handing the responsibility for the nearly all new powergeneration to independent or private power producers.In 2008 the provincial government amended the Utilities Commission Act tosolidify this policy change, and to mandate the introduction of Smart Meters intoevery home and business in B.C.With these policy changes and since the introduction of the “Clean Energy Act”in 2010, BC Hydro has faced some of its most serious issues, which wouldcompromise Hydro’s affordability and effectiveness and threaten the environment,workplace safety, and Hydro’s service to communities.Through 2007-2010 COPE 378 joined with labour and community partners acrossBC, including environmental organizations, economists, and municipal politiciansin a large-scale campaign to push back against the government’s drive to open ourrivers to private power projects. Nevertheless, many of these independent powerprojects have forged ahead.BC Hydro’s challenges came to a head in late 2010, as the utility announced itintended to raise residential electricity rates by almost 30% over three years. Witha potential election looming, the government ordered a rate review. But instead of seeking out an arms length, impartial panel who would examine the government’sown policies, Premier Clark chose a panel of three Deputy Ministers from withingovernment.When the Rate Review Report was released in August 2011, it found that the costof private power projects to British Columbians had been higher even on average than the cost of importing electricity from another area if needed. However, thepanel failed to make any strong recommendations on IPPs. The panel also failed toanalyze the $1 billion Smart Meter Initiative.What the panel did recommend was cutting 1,000 jobs at BC Hydro, on topof the over 800 Meter Readers and other workers at Accenture slated to lose their jobs as a result of Smart Meters and changing contracts. However, theirrecommendations for job cuts were based on comparing today’s workforce
numbers with an articially low year (2006), and comparing the utility with the
Ministry of Transportation instead of utilities in other jurisdictions.It soon became clear that there were expert perspectives not included in the BCHydro Rate Review Report. In order to ensure these perspectives are heard and that the government and BC Hydro can make the changes needed for the future of our public utility, we have compiled this alternative rate review report.
Inside you will hear from people who are experts in their elds:
First, SFU Economist Dr. Marvin Shaffer argues a change in government policy at
BC Hydro is required to remove the self-sufciency and insurance guidelines that
force BC Hydro to purchase expensive and unneeded energy from private powerproducers. His report details recommendations to restore independent oversightof BC Hydro and to restore BC Hydro’s responsibility to meet British Columbia’selectricity requirements in a reliable, cost-effective and environmentally andsocially responsible way.
Second, John Calvert and Marjorie Grifn Cohen have co-authored a paper
analyzing three main policy initiatives since 2002 that have dramatically impactedBC Hydro and the provision of electricity in BC. Calvert and Cohen contend the BCHydro panel report was a missed opportunity to look at the real cost-drivers behind the application for a rate increase. Calvert is a political scientist and author of 
Liquid Gold: Energy Privatization in British Columbia
. Cohen is a professor of publicpolicy and a former board member at BC Hydro and BC Powerex.Finally, Colin Fussell, formerly a regulatory manager at BC Hydro and expertwitness at the BC Utilities Commission, outlines why many of the Hydro report’srecommendations are unrealistic, taking a point-by-point review of the initialreport’s conclusions.It is my hope that BC Hydro and the BC government will carefully review theconclusions of this alternate rate review in order to make the best decisions for thefuture of our public utility, and our province.
David Black, COPE 378 President 
INTRODUCTION
The Canadian Ofce and Professional Employees Union Local 378
2nd Floor, 4595 Canada Way, Burnaby, BC V5G 1J9
TEL 604-299-0378 TOLL FREE IN BC 1-800-665-6838 FAX 604-299-8211
www.cope378.ca

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