Powering up the province 6


With a photo of his grandfather W.A.C. Bennett in the background, BC Hydro chair Brad Bennett addresses the Prince George Chamber of Commerce.

BY BILL PHILLIPS

bill@newnorthbc.ca

Beware of fake news.

That’s the message from BC Hydro chair Brad Bennett, who says there is plenty of fake news circulating on social media about the Crown corporation in general and the building of the Site C dam specifically.

“We do have to build Site C,” Bennett said during a stop in Prince George earlier this year. “I take issue with the fake news crowd, talking about Site C and whether it’s needed or not. The fact is it’s needed. We know it’s needed. Our forecasting shows that very, very clearly.”

If the name sounds familiar, it’s because Brad the grandson of former B.C. Premier W.A.C. Bennett for whom the first dam on the Peace River is named. Without building Site C, Hydro will fall behind where it needs to be to provide power to British Columbians, says the younger Bennett.

“We expect, without Site C, we will be in a capacity deficit of eight per cent in our 10-year planning horizon and an energy deficit of two per cent within that 10-year period,” he said. “A lot of this is about getting in front of the eventuality, getting in front of the curve. Making sure we have the power when we need it.”

He said Site C will produce 35 per cent of the energy produced at W.A.C. Bennett dam with only five per cent of the reservoir.

“Site C creates, in essence, a widening of the river,” he said. “It’s not like what happened at Williston, creating the reservoir which is now one of B.C. largest lakes. It’s basically recycled water. It will have been through two generating stations by the time is gets to Site C.”

Bennett said Hydro has spent almost half, $4 billion, of the $8.5 billion budgeted. And, a year-and-a-half into the eight-year construction period, he says the project is on budget and on schedule.

As of February, there were 1,900 people working at Site C, 82 per cent of those are from B.C., said Bennett, 700 workers are from the Peace. Forty-five per cent of the contractor work force is from the Peace region and 200 workers are First Nations. A total of 275 businesses have contributed.

While the times have certainly changed since the 1960s, when BC Hydro was formed, the core role of the Crown corporation hasn’t.

“The reasons they went ahead and created Hydro and got on with all the projects in the ‘60s, ‘70s, and early ‘80s are the same as they are today,” said Bennett. “We’re at a different place in history but the reasons for continuing to develop this much needed infrastructure, the backbone of our province, is as critical today as it always was.”

In addition, it’s not all about Site C. BC Hydro has 79 dams at 41 sites with 31 generating stations and more than 300 substations in the province.

“Our mission is to create reliable, safe, and affordable electricity for our customers,” he said.

BC Hydro is one of the largest companies in the province. In its fiscal year 2016 Hydro had revenues of $5.7 billion, with capital expenditures of $2.3 billion, and the end of last fiscal had assets of roughly $30 billion.

In the last five years, it has completed 560 capital projects with an aggregate value of $6.5 billion.

“We’re not just starting to build, we’ve been at this for a while,” said Bennett. “Don’t believe what you might hear from fake news. Hydro is a company that knows that it’s doing when it comes to building these projects, managing these projects, and getting them build on budget, on time. We find ourselves back in a period of big build, just like the company was in the ‘60s, ‘70s, and ‘80s.

It was in the 1950s that the W.A.C. Bennett government started studying major rivers in the province with the goal of providing hydroelectric power. In 1962 the government created BC Hydro by taking over BC Electric and amalgamating it with the B.C. Power Commission. At the same time, developed the Columbia River Treaty, signed in 1964.

The government was intent on opening up the north. It took over the BC Electric Railway which eventually became BCRail.

It also developed the Two Rivers Policy, with the idea of developing the Peace River and the Columbia River.

“We’re in an enviable position with all of our assets,” said Bennett. “We’ve got a legacy of solid infrastructure, but the fact is our assets are aging. So many of our assets are approaching half a century old. They require an awful lot of maintenance. We need to get on with building our capacity.”

Energy demand expected to increase by 40 per cent over the next 20 years, he said and the province’s population is expected to increase by two million people over the next 25 years. That means more demand for power.

Some say Hydro should look to alternative sources of power, such as wind, and solar, and run of the river to build that capacity. Bennett says the corporation has with independent power producers providing 25 per cent of its total energy.

“We can’t do more than that right now,” said Bennett. “We need to bring balance back into the system because just creating more intermittent power production on its own, doesn’t provide the reliability in the system we need. We need to have firm power. We need to have that firm capacity. That’s why hydroelectric facilities are so important so crucial. They provide power when we need it, on demand, all the time.

“Reservoirs are like giant batteries. They are, literally, our battery storage. We can turn our generators on, or shut them and we can manage our peak demand.”

So Hydro will work on expanding its capacity, with Site C, and other projects around the province.

Over the next 10 years capital plan spending will be more than $2 billion a year, which has a GDP impact of $13 billion.

“We are expecting to create around 100,000 person/years of employment,” said Bennett. “These aren’t minimum wage jobs. These are solid, middle class, family supporting jobs.”

Hydro, however, is a strange business. While the corporation is looking at expanding its capacity to serve more customers, it also spends billions urging British Columbians not to use its product as much.

“It’s not just about building,” said Bennett. “Let’s not forget the important side of what BC Hydro has done since the early 2000s, that’s invest in the demand side management, which is PowerSmart initiatives. That’s where we put an interesting spin on planning our business model. We actually invest hundreds of millions of dollars to convince you not to buy our product.”

The reason Hydro does that, he said, was so that it can delay the inevitable … building more capacity.

“At times demand side management isn’t enough and just have to get on with it and build.”


Leave a comment

Your email address will not be published. Required fields are marked *

6 thoughts on “Powering up the province

  • Ken Boon

    “I take issue with the fake news crowd, talking about Site C and whether it’s needed or not. The fact is it’s needed. We know it’s needed. Our forecasting shows that very, very clearly.”
    This is exactly what BC Hydro forecast back in the late 70’s and early 80’s. Fortunately, his dad had the wisdom to create the BC Utilities Commission who determined there was no need for Site C. Based on that, his dad decided to not build Site C. It turned out to be the right decision.
    BC Hydro has a history of consistently over forecasting future energy needs. Site C needs a BCUC review.

  • Randal hadland

    It is an interesting bit of history concerning dam building and the Bennetts. Another bit that maybe isn’t as well known, is that when old WAC was developing his two rivers plan it was another case of there not being enough demand. WAC went to the newly created BC Hydro and Power Authority and said, ‘What would it take to make the demand forecast justify the construction of that big dam up on the Peace River that Ima gonna name after me?’ And so the bright young engineers working for BC Hydro and Power Authority came up with a projection of electricity demand based on wastefully cheap electricity consumed by industrial customers and over estimated population and GDP expectations. In short then the destruction of the Peace River, the Findlay, the Parsnip, and the harm done to the people and ecosystem that existed there for thousands of years was caused by Brads grandpa doing what is called back casting in the business. You first decide what you want to build and then figure out how to convince people you need it. Interesting and truthful that this government and Hydro are using the same reasons as they used back then.

  • Martin Cavin

    Bennett sounds like Trump. Doesn’t like the truth so calls it fake.
    If the Liberals didn’t interfere so much in Hydro’s operation, Site C certainly wouldn’t be needed. How about using the power BC is entitled to under the Columbia River treaty? Sorry, the Liberals won’t let Hydro do that. That’s 1,000 MW of capacity and 4,400 GWh/yr of energy.
    If Hydro will be short of capacity and energy within 10 years, why did the Liberals force Hydro to shut down Burrard Thermal as a standby plant? Burrard would have been the ideal backup for the C.R. treaty power.
    The greatest benefit of smart meters is time-of-use (TOU) billing, which is common practice with many utilities. This encourages consumers to use less power during peak periods, reducing peak loads. The savings are huge as utilities don’t have to install expensive peaking equipment that sits idle most of the time. Sorry, Liberals won’t allow that. Meanwhile Hydro’ debt grows by billions even while rates rise.
    Bennett assumes a static energy world where ratepayers are held captive to Hydro’s ever rising rates to pay off the dam over 70 years. But technology is rapidly evolving, making intermittent power sources cheaper and more reliable. Already electricity is 4 times the cost of gas and most people don’t use it as their principal source of residential energy. Under Hydro’s 10 year plan, rates will rise 46% by 2023, yet Hydro’s debt will grow from $16 billion to $24 billion during the same period. Not sustainable.
    As an interim measure until technology provides something better, building a few gas-fired power plants as needed would provide much cheaper power than Site C. Sorry, the Liberals won’t allow that. Yet the Liberals have no problem exporting LNG for the rest of the world to burn. Such hypocrisy. This despite the fact that gas burned domestically is cleaner than LNG as it doesn’t have to be liquefied first.

  • Andrea Morison

    If the power is needed, then why isn’t BC Hydro developing energy infrastructure that is less expensive, far less destructive and can provide jobs in various locations throughout the province? Consider the research and recommendations by energy economist, Richard McCullough:
    o “Using industry standard assumptions, Site C is more than three times as costly as the least expensive option [gas thermal],” Mr. McCullough concluded. “While the cost and choice of options deserve further analysis, the simple conclusion is that Site C is more expensive – dramatically so – than the renewable [and] natural gas portfolios elsewhere in the U.S. and Canada.”
    o Mr. McCullough noted that the province adopted accounting changes last fall that reduced the cost of power generated by Site C. He said those changes are illusory and the costs will eventually have to be paid either by Hydro ratepayers, or provincial taxpayers.
    o Mr. McCullough, a leading expert on power utilities in the Pacific Northwest, also disputes the rate that BC Hydro used to compare the long-term borrowing cost of capital for Site C against other projects, noting that other major utilities in North America use higher rates for such projects because they are considered risky
    o investments. The so-called discount rate is critical to the overall cost projections, and he said the paper trail on how the Crown arrived at its figure “can only be described as sketchy and inadequate.”
    • McCullough said Hydro set the discount rate for the project at 5 per cent and he believes it should be about 12 per cent. “If we use industry standard assumptions of the discount rate, Site C rapidly becomes one of the more expensive of the options,” said McCullough. Source
    • McCullough’s report: Site C Business Case Assumptions Review, May 2015: http://www.mresearch.com/pdfs/20150525-SiteC_Economic_evaluation.pdf

    Further, check out the research by UBC’s Program on Water Governance that refute many arguments used by BC Hydro to justify the Site C dam. In 2016, a team of researchers led by Dr. Karen Bakker began producing a series of reports on the Site C Project. These reports assessed a series of issues: First Nations issues; environmental impacts; regulatory process; greenhouse gas emissions; and economics. Dr. Gordon Christie (Faculty of Law, University of British Columbia) was another lead author on the reports. Find the reports here:
    https://watergovernance.ca/projects/sitec/

  • LARRY PETERSON

    WE HAVE EXPERIENCED FAKE NEWS FROM BC HYDRO SINCE THE 1970’S WHEN OUR FAMILY FIRST HAD TO DEAL WITH THE SITE C DAM THAT AFFECTED OUR 1810 ACRE FARM IN THE PEACE RIVER VALLEY. THE FIRST THING OUT OF THEIR REPRESENTATIVES MOUTHS WERE LIES TELLING US WHERE THE PROPOSED FLOOD LEVEL WOULD BE SHOULD THE DAM BE BUILT. AFTER THAT IN NEGOTIATIONS WE WERE CONTINUALLY MISLED AND USED AND ABUSED AND TOLD THEIR WOULD BE ‘BROWN OUTS AND POWER OUTAGES IF THE DAM WERE NOT APPROVED AND BUILT IN THE 1980’S. VERBAL COMMITTMENTS WERE MADE AND PROMISIES BROKEN AND THE VARIOUS LANDOWNERS WERE NOT TREATED CONSISTENTLY AND FAIRLY. WE WERE TOLD WE WOULD BE EXPROPRIATED IF WE DID NOT SELL TO HYDRO AT THE PRICE THEIR APPRAISERS PUT ON THE LAND. LANDOWNERS BANKS WERE CONTACTED AND TOLD SOME OF THE LAND OWNERS IF YOU DO NOT SELL TO THEM WE CAN. I COULD GO ON AND ON AS ONE WHO HAS SPENT TENS OF THOUSANDS OF DOLLARS AND YEARS OF MY LIFE IN DEALING WITH THIS SITE C DAM ISSUE. IT IS A POLITICAL AGENDA WITHOUT NEED AND WOULD RUIN ONE OF THE LAST MOST PRECIOUS RIVER VALLEYS IN THE WORLD FOR POLITICAL AND CORPORATE GREED. IT NEVER SHOULD HAVE BEEN APPROVED AND SHOULD BE HALTED FOR THE BENEFIT OF ALL FUTURE BRITISH COLUMBIAN.