Plugged In Email Newsletter: May 2006

1. Overview

BC Citizens for Public Power has been involved in a number of activities during the past month. The following is a list of the events that BCCCP has either sponsored directly or provided speakers to concerning electricity privatization issues.

• Vancouver Public Library “Speak Up” series on water privatization, Oct 3rd Main Library Branch
• Vancouver Public Library “Speak Up” series on water privatization, Oct 11th Renfrew Branch
• BCCCP Sponsored Forum on Private Power Projects in BC – Main Library Branch Oct 21st
• Victoria Water Watch Forum on Private Power Projects and Bill 30 – Marriott Hotel Ballroom, Oct 24th

2. Vancouver Public Library “Speak Up” series on water privatization, Oct 3rd Main Library Branch

This fall the Vancouver Public Library has sponsored a series of four forums on the theme of “privatization and the public good”. Each forum was devoted to a specific area where privatization has made inroads in recent years: P-3s, Water, Health Care and Public Space (See the VPL web site for more information). The forums were repeated twice, once at the main branch of the library and once at one of the regional branches.

John Calvert, BCCCP board member was invited to give a presentation to the water privatization forum. He discussed the Government’s policy of handing out water licensees to private energy companies for almost nothing, despite the enormous future value of our water power assets. Specifically, he noted that a water licence for a site that could generate $8 or $10 million per year in energy revenues was being sold for only $5,000 to the first person or company to apply to the registry office. The fee for larger projects was a paltry $10,000. Government water rentals and capacity charges were also very low, meaning that the public was receiving only about 3% to 4% of the value of its water resource from private energy developers. Water licenses were given initially for 40 years but were renewable and the land on which power projects were being developed was being sold outright to private energy interests. This meant that the revenue from these sites would continue to flow to investors – many of whom are already foreign – forever.

The forum attracted about 175 people and there was a good debate about the costs of allowing private interests to build run of the river and small hydro plants and using public water resources to generate electricity.

3. Vancouver Public Library “Speak Up” series on water privatization, Oct 11th Renfrew Branch

The Renfrew Branch forum attracted about 40 members of the public to hear the same debate as was held at the main branch. Calvert made the same presentation as on October 3rd. The audience was very supportive of BCCC’s position on the exorbitant costs of private power development.

4. BCCCP Public Meeting on the Privatization of BC’s Water for Power Hydro Resources

The forum was organized by BCCCP with assistance from the Council of Canadians. About 200 people came to the Saturday evening event and there was some media coverage both before and during the event.

The purpose of the forum was to outline how the Government’s energy privatization policies were negatively affecting communities across BC by allowing private energy developers to acquire the most valuable small hydro sites on hundreds of BC’s rivers and streams. Speakers from three different areas of the province, Squamish-Lillooet, Christina Lake (Kettle River) and Kitimat explained the negative impacts that their communities had experienced as a result of private ownership of run of the river and small hydro generating facilities. BCCCP Board member Marjorie Griffin Cohen chaired the meeting and other members of the Board participated in the discussion after the presentations.

John Calvert of the BCCCP outlined how the Government’s energy policy was forcing BC Hydro to purchase significant amounts of very high cost energy from private energy developers based in BC, thus precipitating a virtual ‘gold rush’ in private energy investments. He noted that the public were effectively financing the cost of these private projects through BC Hydro’s Energy Purchase Agreements which guaranteed investors up to 40 years of public revenue for energy produced in their new power plants.

Using BC Hydro’s contractual commitments, private developers could borrow the funds needed to build new facilities, ensure a good profit for their investors. Even worse, from a public policy perspective, they would end up with full ownership of the resource by the end of the contract. In contrast, the public, who were saddled with the high cost of the energy contracts, would end up with no assets once the purchase agreements had expired. Despite the Government’s claims that this approach provided energy security to the public in the future, the reality was that private energy developers were free to export their electricity, aided by the Government’s decision to open the transmission grid to private energy exports to the US

Calvert noted that the financial obligations of the large 2006 tender awards would amount to a total of $15.6 billion dollars in public payments to private energy developers between 2009 and 2051. He also noted that the price BC ratepayers were locked into paying ($74 MWh at the power plant gate and $87.50 MWh delivered to the lower mainland) was far higher than the approximately $50 MWh that the US Energy Information Administration was predicting would prevail for much of the period covered by the contracts. Using a slightly different methodology, the Government, in response to an Freedom of Information request acknowledged on October 2nd that the contractual obligations undertaken by BC Hydro involved at least $13.4 billion in energy purchase agreement contracts already.

Grace MacGregor, Director, Area C, Christina Lake Regional District Kootenay Boundary local government and a community activist provided an account of the community’s 13 year struggle to stop the construction of a new private power plant on the beautiful Kettle River. She described the kinds of pressures the local government and the local community have been under, not only from the company, but also the Province, to agree to the project going forward. Members of her community have been very concerned about the loss of water access and the negative impact on tourism (the community of 1500 swells to 6000 during the summer with tourists) resulting from loss of access to some parts of the beautiful canyon that the river flows through.. She encouraged other communities to continue to fight against private water developers.

Tom Rankin a local rancher and business man from Squamish spoke about the struggle his Regional District has been engaged in to prevent Ledcor building a major power plant on the Ashlu River. Private power developers have already constructed a large number of projects in the Whistler-Squamish area and many more are earmarked for future development. Local residents, kayakers, tourist outfitters, hikers and many others are increasingly upset about the way in which their pristine landscape is now being inundated with private power projects, new access roads and new transmission lines – all of which are to the benefit of private energy developers, but are largely at the expense of the local community. Tom called for the repeal of Bill 30, enacted last spring, which gives the Government, through the Utilities Commission the right to override Municipal Government zoning regulations if they impede the construction of private power plants.

Finally, Trafford Hall, City manager for the Region of Kitimat, outlined Kitimat’s long struggle with the multinational aluminum giant Alcan. In 1950, the company was permitted to divert the Nechako River using a dam and a 16 km tunnel to build a power plant to supply a new aluminum smelter at Kitimat. The understanding was that the company would use the resulting electricity as a way of developing the economy of the region through aluminum production.

However, the profits from selling energy are now much higher than from making aluminum Hall estimates that the cost of Alcan’s electricity, including the provincial water rental charge, is still only about $10 MWh while the current price at the market is five or six times that. Consequently, the company has been trying to get out of its original commitment to use BC’s water resource to make aluminum and instead sell the energy. Expanding energy sales and downsizing it smelter will give the company several hundred millions of pure profit annually, with no benefit to the province, as the beneficiaries are shareholders who almost entirely live outside the province.

After the presentations there was a very good discussion of the issues raised by the speakers. Many of the members of the audience had no idea of how far the Government’s privatization agenda had gone and were supportive of BCCCP’s efforts to alert the public to the costs of current energy policies.

5. Victoria Water Watch Forum on Private Power Projects and Bill 30 – Marriott Hotel Ballroom, Oct 24th

BCCCP was asked to send a speaker to the Island Water Watch forum sponsored by the Victoria branch of the Island Water Watch association along with local CUPE anti-water privatization activists and some Council of Canadians members in Victoria. Although organized on very short notice, the meeting attracted about 75 people. Its timing was deliberately arranged to coincide with the Union of BC Municipalities’ annual conference at which there was a resolution dealing with Bill 30. The meeting attracted a significant number of young people who were keen to do further work in support of keeping BC’s electricity system public.

John Calvert from BCCCP spoke about the water licence issue and the costs of private power developments. Shane Simpson, NDP environment critic, spoke about his experiences with the government’s failure to adopt appropriate environmental safeguards with respect to the approval of private power projects. Tom Rankin discussed the efforts of his community to stop the Ashul river power project and urged UBCM members present to vote for the repeal of Bill 30.

The next day, the UBCM voted unanimously to do exactly that. BCCCP is pleased that it has been able to make a contribution to this process.