Like school yard bullies, Energy Minister Rich Coleman and the Liberals relish the power they have to diminish the B.C. Utilities Commission in the interests of political expediency.
In some respects the BCUC is its own worst enemy. It presents a lifeless, amorphous facade to the public. It shrouds its good works in techno-jargon. It has no feisty spokesperson in front of the cameras making a compelling pitch for independence and transparency.
That said, British Columbians seem to appreciate intuitively that the BCUC is important. We understand that it has a vital mandate as an agency of regulatory oversight. When it is allowed to do its job, it demands accountability of BC Hydro and, by extension, of hydro’s political masters.
I know many of us would have appreciated a little BCUC scrutiny ahead of the launching of hydro’s $1-billion Smart Meter initiative. But we did not get that opportunity because the Liberals, under former premier Gordon Campbell, did not want to engage in a bunch of potentially embarrassing regulatory second guessing ahead of time.
Last week, Coleman ordered BCUC to rubber stamp a three-year hydro rate schedule that effectively cancelled commission hearings that would have shed some light on BC Hydro’s expansion plans and fiscal strategies. The political bonus was a mere 1.4-per-cent rate increase next April, one month before the provincial election.
In a special “opinion” piece that appears on the government’s media website, Coleman states: “As the accountable and elected minister, I concluded the clock could no longer continue to tick. It was abundantly clear that to let further process occur would not be in the best interest of British Columbians, and a decision was required for the provincial government to fulfil its commitment to keep electricity rates as low as possible.”
“It really isn’t about politics,” the minister told incredulous reporters.
As much as BC Hydro customers will appreciate a rate-hike holiday just before they go to the polls, most will also acknowledge that the utility faces huge revenue challenges and that Coleman is simply taking out a political mortgage on the day of reckoning.
He has offered no insights on how hydro will fund more than $6 billion in essential infrastructure upgrades in the near future. As if to reinforce that reality, I was informed this week by BCUC secretary Alanna Gillis that BC Hydro has just filed an application for a Certificate of Public Convenience and Necessity to allow it to proceed with the $1.2 billion John Hart Generating Station Replacement Project in Campbell River.
Typical of the several huge upgrades on BC Hydro’s drawing board, the refurbished 65-year-old dam will generate 835 gigawatt hours of electricity a year, an output increase of less than 10 per cent. However, financing this mega project will eventually have a significant impact on hydro rates.
How BCUC is expected to thoroughly weigh the trade-offs between long overdue upgrades that don’t increase system capacity and the inevitable pressure on user rates is hard to imagine.
Coleman is gung-ho about the Hart Dam rehabilitation, saying it “will create about 400 jobs a year over the five years of construction, providing economic benefits to families and businesses in the area.” But he has hobbled the BCUC to prevent British Columbians from having a conversation about how we pay for it after the May 2013 election. M