Plugged In Email Newsletter: November 2004

Victory at the BC Utilities Commission!

BCUC rejects full rate hike requested by BC Hydro, but increase could have been zero if it weren't for the government's private energy strategy.

Hailed as a victory for customers, the BC Utilities Commission rejected BC Hydro's proposed rate increase of 8.9% and approved a lower increase of 4.85% for fiscal 2005.

Since April, customers were charged an interim rate hike of 7.23% which will be refunded as a credit on bills starting in January. This will save customers approximately $100 million.

"This is big win in our fight to keep our rates low," said Mark Veerkamp , Executive Director for the BC Citizens for Public Power . "We worked hard and are pleased that customers won't have to reach as deep into their pockets."

"But even this rate increase was not necessary," said Veerkamp. "If the government and BC Hydro hadn't spent more than $130 million on some very bad decisions, there might have been no increase at all."

Government Energy Policy Directives Drive Up Rates

The expensive restructuring of BC Hydro coupled with some very questionable subsidies to Canfor and Weyerhauser drove up costs by more than $130 million. Had these not occurred, it is likely the rate increase would have been minimal or even zero.

These expenditures include:

* Running a separate transmission system ($17.8 million)
* Massive restructuring including reorganization related to Accenture ($45 million)
* Subsidies to Canfor and Weyerhauser ($67 million)

These expenditures alone total almost $130 million.

A rate increase of 4.85% equals about $120 million. Had the government not forced expensive restructuring and BC Hydro not given away millions to profitable forest companies, it is likely the rate increase would not have not been needed.

Because the restructuring is part of the Energy Policy, the government has directed the BCUC to only consider if the costs of restructuring are accurate, not if the decision was a good idea or the least expensive option. The role of the BCUC seems to be constrained by the energy policy (government give the BCUC "special direction" on a number of issues).

"The government is still moving full steam ahead with their private energy strategy," said Veerkamp. "This rate increase is only the beginning and we are going to have to fight every step of the way to keep rates low."

BCUC Rejects "Load Displacement" Subsidies

The BCUC did rule against some very questionable subsidies to big forest companies. Called "Load Displacement" grants, Canfor ($49 million) and Weyerhauser ($18 million) got the biggest pieces of the pie. These grants were expenditures under the Power Smart program to help these companies finance turbogenerators to produce their own electricity instead of buying it from BC Hydro.

Evidence presented at the BCUC hearing challenged the legitimacy of these subsidies which were not conservation initiatives at all. Rather, these grants merely shifted who was producing the power from BC Hydro to the forest companies. We argued that there was insufficient evidence to prove that the subsidies were needed and that it was entirely possible that Weyerhauser and Canfor would have made these investments without money from BC Hydro.

And it turned out that Weyerhauser had already bought the equipment.

In their recent decision, the BC Utilities Commission ruled against future subsidies, but allowed the costs for grants, like those to Weyerhauser and Canfor, that predated the application.

"Given that Canfor and Weyerhauser seem to be doing very well financially, they should have to give the money back to customers," said Veerkamp.

We Still Need Your Help To Keep Up The Fight!

We still need your help to move our historic class action lawsuit ahead and maintain our public campaign against privatization in the lead-up to a provincial election. The recent victory at the BCUC shows we can make a difference - a $100 million difference!!!

And the government is obviously worried we are having an ef fect. Again this fall, Liberal MLAs repeatedly attacked CPP in the Legislature .Clearly, we are having an impact! Please help us keep up the fight by making a donation today. Click here.

Our most recent appeals for financial assistance could only be described as "emergency appeals." And for good reason: B.C. Citizens for Public Power had come so close to our certification hearing in BC Supreme Court, only to experience a shortfall of funds.

Coming so close to our day in court and so close to what would be a magnificent opportunity to make BC Hydro a major issue in next year's provincial election -- and really let the people decide.

But as a result of our fundraising ef forts, more than $55,000 flowed into our office. We were overjoyed at the outpouring of support and this goes a long way to meeting our goals. Clearly, a lot of British Columbians still felt we could pull off the largest class action lawsuit in Canadian history.

Observers of this historic case agree: We have one chance to save B.C. Hydro and one chance only -- And we are executing that one chance right now, with this campaign you have so generously supported.

We have been fighting against privatization in the courts, at the Utilities Commission, and around the province. As we head into the next election, we need your support to keep up that fight. Click here to make a donation.

Together, we can protect BC Hydro.

BC Citizens for Public Power Gets Stronger!

Three new board members add experience and energy to the growing movement to protect BC Hydro

BC Citizens for Public Power are pleased to announce the addition of three new board members. SFU adjunct professor John Calvert, researcher and former Deputy Minster Blair Redlin, and Canadian Federation of Students staff person and former chairperson Summer McFadyen have recently joined an eclectic board of community leaders, academics, and labour leaders who are working together to protect BC Hydro.

"It's rare you see an organization with such a broad basis of support," said new board member John Calvert. "I am proud to be a part of such a diverse group and I am looking forward to the work ahead."

BC Citizens for Public Power have been supported by prominent British Columbians such as former Premiers' Bill Vander Zalm and Dave Barrett, David Suzuki, and Unity Party Leader Chris Delaney who joined together to speak out against the government's wrongheaded strategy.

BC Liberal Government Announces Private Power Expansion

In October, BC Hydro announced that they would be purchasing 2000 gigawatts of power from private energy companies over the next two years in an aggressive expansion of private power.

2000 gigawatts is enough electricity to power 200,000 homes. Now, all new demand, except for what can be met by conservation through Power Smart will be met by private energy companies.

"This is a historic moment, but not a good one," said Mark Veerkamp , Executive Director for the BC Citizens for Public Power . "The government and BC Hydro are abandoning a very successful strategy of public investment and are turning our energy future over to private companies."

Public investment has kept rates low. If BC had relied on private energy companies instead of public power 20 or 30 years ago, our rates would be much higher today.

Over the past 10 years, BC Hydro's costs of generation have increased less that 1% while private power costs have gone up 77%.

Duke Point Plant Needs Public Hearing

If you thought the gas plant at Duke Point was dead, you were wrong. It's back, this time run by a private company!

Last year, BC Hydro's proposed gas plant on Vancouver Island at Duke Point was rejected by the BC Utilities Commission who ordered BC Hydro to turn to the private sector to meet electricity needs on the island. BC Hydro was ordered to write down $120 million it already sunk into the project and proceeded with a Call for Tenders.

After completing the Call for Tenders process, BC Hydro chose Alberta based Pristine Power to develop virtually the exact same proposal.

"This has all the hallmarks of a boondoggle in the making," said Mark Veerkamp, Executive Director for the BC Citizens for Public Power. "While BC Hydro is writing off the development and regulatory costs of the project, a private company gets the deal without having to spend this money and a will inherit a turbine at a nice discount."

Observers are also raising concern about who is shouldering the risk of rising gas prices.

"We think this project needs a full public hearing to make sure that Pristine Power is not getting subsidized by BC Hydro," said Veerkamp. "We are going to keep a careful eye on this to make sure British Columbians aren't going to get stuck with the bill."