BC Hydro net income of $98 million suggests company does not need rate hike, says BC Citizens for Public Power

Vancouver, BC - Cries of poverty sound pretty hollow when BC Hydro reports a net income of nearly $100 million, says Mark Veerkamp, Executive Director of the BC Citizens for Public Power reacting to BC Hydro's announcement yesterday of their 2004 financial results.

Vancouver, BC - Cries of poverty sound pretty hollow when BC Hydro reports a net income of nearly $100 million, says Mark Veerkamp, Executive Director of the BC Citizens for Public Power reacting to BC Hydro's announcement yesterday of their 2004 financial results.

BC Hydro has justified the need for a rate increase on the basis they were going to be in a $48 million d eficit. Now, BC Hydro is reporting a net income of $98 million, up $146 million from previous estimates. BC Hydro is currently before the BC Utilities Commission defending a rate increase of 8.9% equal to $229 million a year.

"British Columbians are wondering why they should reach deeper into their pockets when BC Hydro is already making a profit," said Veerkamp.

Although BC Hydro had a better financial position than expected, net income in 2004 was $320 million less than the previous fiscal year. In 2003 net income was $418 million.

While BC Hydro says this is due to lower water levels and the VIPG project, the numbers show that government policies to break up and privatize operations are also driving up costs.

Handing over 1/3 of employees and operations to Accenture and creating a separate BC Transmission Company (BCTC) cost $65 million in 2004.

Government direction banning BC Hydro from building new generating plants and purchasing only from private energy companies (IPPs) is another major cost driver that will continue to push rates up in the future. In fiscal 2004, electricity purchases were $454 million more than in 2003.

BC Hydro is currently paying $55 a MWh for private power, well above the Mid-C market price of $47 MWh. This is ten times higher than the cost for BC Hydro to produce its existing power.

"Government is making bad decisions. Now, they want BC Hydro to hike rates and force British Columbians pay for them," said Veerkamp.

"It's time to step back from this rate increase and the government policies which are driving it before it's too late," said Veerkamp.