PEOPLE POWER is a six-chaper 50 minute DVD designed to help activists launch grassroots community-based campaigns to protect public power and the environment.
BC Hydro is a Crown Corporation. Does that mean it costs taxpayers money to run the utility?
Posted December 10th, 2007
BC Hydro is an efficient corporation with diversified revenue streams that turn large profits. This means that it cannot only provide British Columbians with low energy rates, but it can also contribute large sums of money to the province in the form of dividends, water rentals, and taxes in lieu . Some of that money generated subsidizes costs for essential public services such as roads, health care, and other social programs.
BC taxpayers are essentially investors in this provincial public utility. Major public investment in the 1970s for dams, construction, and start-up costs ensured low electricity prices now. Because BC Hydro is rich in assets, expertise, and resources, the corporation is thriving, earning $407 million in profits in 2007, and contributing $642 million to the Province in 2006. The public capitalizes on its investment through low rates and by earning returns through government spending.
Should BC Hydro further support private power developments, there is a real danger that consumers will subsidize the risk associated with private energy projects and will experience sharp rate increases due to market-priced energy. With the current movement towards privatization, British Columbians already experienced an 8% increase in residential hydro rates last year. More recently, in November 2007, an additional 11% increase was announced in an effort to "rebalance" costs so that they are more closely linked with private market rates.
Albertans saw their electricity prices skyrocket after deregulation in 2000. The increase was so significant that the Albertan government instituted a rebate program for households and businesses that cost a staggering $2.3 billion in Alberta taxpayers' dollars. A similar, deregulated system in BC could result in diminishing dividend returns to the province and possibly stamp them out entirely.
BC taxpayers are essentially investors in this provincial public utility. Major public investment in the 1970s for dams, construction, and start-up costs ensured low electricity prices now. Because BC Hydro is rich in assets, expertise, and resources, the corporation is thriving, earning $407 million in profits in 2007, and contributing $642 million to the Province in 2006. The public capitalizes on its investment through low rates and by earning returns through government spending.
Should BC Hydro further support private power developments, there is a real danger that consumers will subsidize the risk associated with private energy projects and will experience sharp rate increases due to market-priced energy. With the current movement towards privatization, British Columbians already experienced an 8% increase in residential hydro rates last year. More recently, in November 2007, an additional 11% increase was announced in an effort to "rebalance" costs so that they are more closely linked with private market rates.
Albertans saw their electricity prices skyrocket after deregulation in 2000. The increase was so significant that the Albertan government instituted a rebate program for households and businesses that cost a staggering $2.3 billion in Alberta taxpayers' dollars. A similar, deregulated system in BC could result in diminishing dividend returns to the province and possibly stamp them out entirely.
Further reading:
- BC Hydro Annual Report: http://www.bchydro.com/info/reports/reports52492.html
- Calvert, John. Liquid Gold: Energy Privatization in British Columbia (Fernwood Publishing, 2007)