BC budget echoes throne speech, positions government as "great green hope," says electricity watchdog group

FOR IMMEDIATE RELEASE
September 1, 2009


VICTORIA – After last week’s rumblings about a multi-billion dollar provincial deficit and a throne speech promising steps the government will take to strengthen the economy, the British Columbia budget, released Tuesday in Victoria, revealed few surprises. With respect to the province’s electricity sector, however, the government appears to have creatively repositioned its Energy Plan as a vital solution both to the province’s economic recession and the global climate crisis. 

Melissa Davis, executive director with BC Citizens for Public Power, a provincial non-profit energy watchdog organization, criticized both the government’s budget and throne speech for its “flagrant disregard” of the July 27th ruling by the BC Utilities Commission that determined that BC Hydro’s Long Term Acquisition Plan to purchase large volumes of private power was “not in the public interest.” 

Referring to the budget, Davis said: “While BC Hydro’s near term strategies to address climate change and environmental impacts are ambiguously worded and exhibit few measurable objectives, last week’s Throne Speech described the government’s intention to 'take every step necessary to become a clean energy powerhouse, as indicated in the BC Energy Plan.’” 

The 2002 Energy Plan effectively restructured BC’s publicly owned electricity sector by explicitly prohibiting the province’s Crown utility from constructing new power projects and relegating this responsibility exclusively to the private sector. Initially, the government's rationale for mass private energy production was the fact that BC faced an energy shortage; this view has been repeatedly disputed by energy experts, environmental researchers, and economists. More recently, the government and private power sector have argued that BC-based private electricity projects are indended for export to jurisdictions such as California.

Mindful of widespread public disapproval of the government’s energy policy, references to privately generated power are conspicuously omitted from the Budget and Fiscal Plan as well as the BC Hydro Service Plan, Davis remarked. Instead, private power is defined as “new electricity” while public power is classified as “existing Heritage Assets”. [BC Hydro Service Plan – Aug. 2009 Update, pg. 30] 

The government’s business case in favour of privatizing BC’s electricity sector has been to argue that private power producers assume the financial risk for proposed projects. In fact, according to Davis, hydro rate increases--as reflected in the budget--are subsidizing private power developments.  

Last year, BC Hydro applied and implemented a residential rate increase of 3% on April 1st and a two-tiered rate structure on October 1st.  

Today’s budget proposes an additional increase of more than 20% over the next three years (8.74% for 2010; 6,42% for 2011; and 5.20% for 2012). [BC Hydro Service Plan – Aug. 2009 Update, pg. 34]  Compounded, these increases total 21.7% between 2010 and 2012. Moreover, in a footnote to these numbers, future year increases are qualified as “estimates only,” with the proviso that “rate increases could change significantly depending on economic and operating conditions ... that may be present at the time.” 

Davis also noted a popular recent strategy that has been adopted by the government: using messaging that effectively equates private power with green or renewable energy, thereby portraying public power promoters as anti-green. “Nothing could be further from the truth,” Davis claims. “Public power systems can measure their profitability through aggressive conservation measures, green energy generation, and affordable rates.”  

In reflecting on the budget, Davis stated, “I’m not an economist, but I can predict—with some confidence—that the government’s energy policy will not, as promised in last week’s Throne Speech and implied in today’s budget, ‘turn the challenge of climate change to our citizens’ economic advantage.’” 

“Rather, what we can expect is economic policy that will inevitably bankrupt our Crown utility by stifling revenue opportunities while demanding larger contributions to the provincial treasury. We can expect exorbitant profits for private power producers with long-term Energy Purchase Agreements with BC Hydro at guaranteed rates that greatly exceed market prices. Tragically, we can also expect thousands of British Columbians, for the first time in half a century, forced to choose between eating or heating their homes because of soaring hydro rates. And we can expect widespread destruction of BC's precious natural resources ... for generations to come." 

- 30 -  

BC Citizens for Public Power, a provincial non-profit organization established in 2002, promotes and advocates for a publicly owned and integrated system of power production, transmission, and distribution to provide British Columbians with affordable, clean, reliable, and renewable energy.   

For more information: Melissa Davis at 604-681-5939 or cell 778-887-5878.