10 Reasons Why Privatizing Electricity and Breaking up B.C. Hydro is a Bad Deal for British Columbians

1. Higher rates for consumers and businesses. BC Hydro electricity rates are going up next year, Energy and Mines Minister Richard Neufeld has confirmed, after 10 years of frozen rates that saved consumers millions and helped create jobs. But will the rate increases ever stop? Not with the privatization of electricity. Rates in BC are the third lowest in North America, thanks to public power ownership. But all new power generation will be privately owned and billed at market rates. Ontario deregulated its energy sector in May 2002 and the price of electricity rose 33% in just one year. Alberta's experience was even more devastating after deregulation: the price of electricity rose over 500% between June and October 2000. Why wouldn't the same thing happen in B.C.?

2. Taxpayers will have to subsidize private power. It's costing the province tens of millions of dollars to dismantle and privatize BC Hydro. Bill 10 and Bill 39 transfer public control of our electricity system over to the private sector. Giving away one-third of BC Hydro's operations and jobs to Bermuda-based Accenture alone cost us more than $60 million. But breaking up BC Hydro into three parts-generation, distribution, and transmission-ultimately means less public accountability, more bureaucracy, and increased costs to ratepayers.

3. Privatization will lead to public service cuts, higher taxes. On average, BC Hydro returns between $300 million and $800 million in annual revenues to government. These revenues go to pay for health care, education, and other social programs. Privatizing existing operations and relying on private power producers will reduce income available to government, leading to service cuts, higher taxes or both.

4. BC citizens oppose BC Hydro privatization. The provincial government never consulted with the people of BC before privatizing BC Hydro's future. Polls consistently show that more than 80% of British Columbians oppose the sale of BC Hydro. And over 60,000 British Columbians have signed a Letter of Intent supporting BC Citizens for Public Power's class action lawsuit to stop the privatization.

5. BC municipalities want public power. In the past two years, over 90 BC municipalities have passed resolutions opposing the end of public power. In 2002, the Union of BC Municipalities unanimously adopted a motion rejecting the transfer of BC Hydro operations to Accenture.

6. Privatization will hurt the environment. BC Hydro has been banned by the provincial government from developing any new power projects, leaving all future generation to the private sector. That means BC will increasingly have more coal-fired, natural gas-fired and wood waste burning sources of electricity, which create far more pollution than BC Hydro's hydroelectric dams. And unlike a public utility, there is little incentive for private companies to conserve power; in fact, just the opposite is true: the more they sell, the higher their profits.

7. Privatization is leading to U.S. control. Plans are underway to have BC join RTO West, a "Regional Transmission Organization" controlled by American corporations that will run Hydro's transmission system. The RTO will decide how much to invest for electrical infrastructure, who has access, and how much will be charged to transmit power. Even public power utilities in the United States, such as Seattle City Light, oppose the RTO West proposal but the BC government thinks it's a great idea.

8. Privatization is costly to consumers. The cost of electricity privatization became well-known in the Enron scandal and the California blackouts. In a privatized system, large utility companies can benefit by controlling the market and secret deals behind closed doors. Meanwhile, the public is on the hook for cost over-runs and maintenance of transmission lines. Enron showed that a handful of private producers can deliberately create power shortages in order to inflate the price of electricity. In the California crisis, publicly-owned power utilities there had enough power and kept prices fair, while customers of private energy corporations were hit with huge price surges and blackouts.

9. Less regulation of power. In November of 2000, Gordon Campbell told the Canadian Institute of Energy that: "It's critical that we restore the independence of the [BC] Utilities Commission to properly do its job on behalf of utilities and consumers alike without political interference." Yet incredibly, the government used new legislation to stop the BCUC from proceeding with a requested review of the Accenture takeover deal and refuses to make details of the multi-million dollar contract public.

10. Privatizing electricity in BC may be irreversible. Private power companies that produce electricity in BC will be protected by provisions in North American Free Trade Agreement and other international trade deals that would make it almost impossible to return to a publicly-owned utility. The only way to get out of such agreements would be to buy back what was once ours, and then compensate private corporations for "lost profits" they may have made in the future-an enormous financial cost.