BC Hydro’s $30 Billion Blind Gamble
BC Hydro’s $30 Billion Blind Gamble Featured
Written by Sandra Hoffman, Ph.D with support from Erik Andersen, economist Monday, 25 June 2012 08:23
I was astonished to read, “A new forecast by BC Hydro shows electricity demand in the province is expected to grow by 50 per cent over the next 20 years,” in a recent article from the Vancouver Sun. To understand why I use the term “astonished”, one must delve deeper to see that this statement is not supported by Hydro’s own data and other global economic data. Rather than taking everything at face value, I’ve learned it’s critically important to question the statements made by BC Hydro and the current provincial government. After watching a documentary on the collapse of Enron and how wild forecasting and lack of genuine oversight led to one of the largest financial failures in modern history, the resounding statement was, “ask why” – wise words to follow to avoid repeating history.
It will be of help to the reader to understand some of the financial implications of BC Hydro’s forecasting. Discussion should start with the understanding of the unit used to measure and report about electrical energy. It is the Gigawatt hour (GWhr) per year, as you can see in the chart that follows. Using the public values associated with the proposed Site C generation plant, it takes $2,000,000 of borrowed money to produce one GWhr/year of usable energy. Keep in mind as you read what follows, your Government and BC Hydro are apparently intent on borrowing and spending, in your name, $30,000,000,000 by 2017. If left to follow the path set out in the most recent BC Hydro forecast, the corporation’s total liabilities will explode to $80,000,000,000! As a shareholder, ratepayer and guarantor of the debt are you ready for this experience?
This is an evidence-based discussion, which means looking at actual domestic demand from BC Hydro’s annual financial reports in concert with various historical demand forecasts by BC Hydro. This data is shown in Graph 1, below.