BC Hydro Does Not Have Enough Electricity to Power Proposed Green Hydrogen Projects
Posted
on
Recent announcements of large planned green hydrogen production plants near Prince George depend on hydroelectricity that BC Hydro does not have. See also https://biv.com/article/2023/09/mines-power-fossil-fuels-major-balancing-act-energy-minister
Ensuring A Clean Electricity Future Will Be Difficult And Expensive
Posted
on
Some commentors and environmental advocates have suggested that BC has almost achieved the target of a clean electrical grid. The attached paper suggests that meeting future demand for a clean power grid will be difficult and expensive.
Auditor General Forces BC Government to Backtrack on New Customer Deferral Accounting
Posted
on
Recent comments by Auditor General Michael Pickup suggest that the government cannot continue to freely issue directives to the BC Utilites Commission respecting BC Hydro's finances.
New Bill Rebate Further Politicizes BC Hydro's Finances
Posted
on
By ordering the Utilities Commission to approve BC Hydro’s new rebate regulatory account the government continues to substitute political imperatives for the economic-based rate setting oversight provided by the once independent regulator.
Estimating the Cost of the Newly Announced BC Hydro Rebate
Posted
on
Premier Eby announced a credit/rebate but no total cost or funding plan was make public. This paper provides an estimate, and discusses two funding approaches.
Quantifying BC Hydro's Domestic Electricity Surplus
Posted
on
BC Hydro no longer reports its Domestic electricity surplus or deficit, but it is possble to determine the annual totals from the service data in its annual reports. The over capacity in generation has costs for ratepayers.
BC Cabinet Again Restricts Independence of Regulator: Will the Auditor General React?
Posted
on
A new directive reinforces the government's unwillingness to fulfill its 2018 promise to enhance the independence of the BC Utilities Commission regardsin BC Hydro's finances and rates.
Government Reneges on Promise to Allow BC Hydro's Regulator Full Independence
Posted
on
A new cabinet order negates the previous commitment to restore full independence to the BC Utilities Commission to regulate BC Hydro. Will the auditor general again qualify the government's financial statements?
In a recent decision the BC Utilities Commission gave notice that it will regulate BC Hydro rates using an incentive sytem. This despite the warnings of BC Hydro and most of the consumer groups that such a system would not be effective for the Crown utility, and would reduce public accountability.
New reports by Ontario's Financial Accountability Office provide a useful overview of the effect of the taxpayer subsidies on the price of electricity in that province. Update with Globe and Mail editorial https://www.theglobeandmail.com/opinion/editorials/article-the-hydro-subsidy-washing-machine-keeps-spinning-in-ontario/
Operating Losses Could Add Another $5.5 Billionto the Cost of Site C.
Posted
on
To date, most of the discussion of the cost of the Site C project has focussed on the total cost. Occasional Paper No. 77 estimates the operating losses over the first fifteen years could total $5.5 billion. Some funding options are also discussed.
In a recent filing with the regulator, BC Hydro is slowly disclosing details on the cost of the Site C dam project. The impact on customer rates has yet to be disclosed.
Manitoba Government Arbitrarily Raises Manitoba Hydro Rates by 2.5 Per Cent
Posted
on
The government of Manitoba has decided to increase Manitoba Hydro rates by 2.5% per year for the next three years. This has resulted in less transparency and accountibility.
BC Hydro's 2020/21 Annual Report: Surplus Sales Partly Offset Decline in Domestic Sales
Posted
on
Occasional Paper No. 76 discusses the highlights of BC Hydro's recently released 2020/21 annual reportt, including the growing mis-match between Domestic power generation and sales.
Government Blocks Possible Reduction in BC Hydro's Excessive Profits
Posted
on
A recent cabinet order has blocked any attempt by the BC Utilities Commission to lower BC Hydro's excessive profits. This is another example of the government's manipulation of the utility and the BC Utilities Commission.
Ontario Expands Taxpayer Subsidy of Electricity Rates
Posted
on
Recently, the Ontario government expanded its program of subsidizing the price of electricity for residential and smaller commercial customers to include larger commercial and industrial users. Given the likely operating losses of Site C, will the BC government also subsidize BC Hydro's rates when this project is operational?
Part way into the BC Utilities Commission's review of its 2022 rate request BC Hydro has asked that any decrease to its net income be delayed. This paper reviews the situation.
The Manitoba government has sidelined the province's regulator of Manitoba Hydro, and legislated a 2.9% rate increase for the coming year. This action mirrors that of Quebec, which also "simplified" rate setting by eliminating the regulator for five years. Is there a trend?
The BC Government Should Reduce BC Hydro's Excess Profits
Posted
on
This paper reviews how the BC government manipulated the rate-setting process to produce a high return on equity at BC Hydro. It's time to eliminate the excess profits to help stimulate the economy.
BC Hydro Quietly Releases Its Second Quarter Financial Report
Posted
on
This Commentary reviews the highlights of the first six months of BC Hydro's 2020/21 fiscal year, including the effect of COVID-19 and lower interest rates.
This paper argues that the net losses for Site C (whether it proceeds or is cancelled) should be covered by the taxpayer rether than expecting the ratepayers to pay the cost by increasing the cost of domestic power sold.
Losses on BC Hydro's Interest Rate Hedging Gamble Now Exceed $1.0 Billion.
Posted
on
BC Hydro's first quarter report to June 30th shows that the losses on the hedging gamble have now reached an astonishing $1.0 billion. This paper reviews the hedging program, and how the losses will prevent ratepayers from benefiting from lower borrowing costs. See also
The Tyee of September 11, 2020, published Ben Parfitt's commentary on the geological and other risks associated with the current constructon of the Site C dam.
BC Hydro's 2019/20 Annual Report: Domestic Sales Continue to Decline but High Profit Assured by Reliance on Regulatory Accounting.
Posted
on
Occasional Paper No. 72 reviews BC Hydro's financial and operational results for 2019/20. Once again, the reliance on regulatory accounting to defer expenditures assured a high net income.
Low Interest Rates Bad News for ICBC's and BC Hydro's Balance Sheets
Posted
on
The prospect of continuing low interest rates will place further strain on the financial statements of ICBC and BC Hydro. The poor financial health could twart government attempts to lower insurace rates or provide cheaper electricity.
BC Hydro released a report that claims its strong financial position despite a dramatic drop in sales. This is not true; its has high debt and relies on deferral costs and recording unearned revenue to produce a high profit.
Recording Unearned Revenue Inocuates BC Hydro's Profit From COVID-19.
Posted
on
BC Hydro's net income is protected against any reduction in revenue by the public utility's recording of unearned revenue in a deferral account. The resulting increse in debt is a liability for future generations.
This paper argues that the governent should reduce BC Hydro's profit (net income) target by 50 percent to provide $350 million in direct relief to BC residents and businesses.
Saskatchewan Reducing Reliance on Coal to Generate Electricity
Posted
on
The attached paper discusses the Saskatchewan government's and SaskPower's moves to reduce the dependence on coal to generate electricity. Certain financial comparisons of SaskPower and BC Hydro are also discussed.
BC Hydro Reports Six Month Loss of $611 Million; Deferring Loss Results in a Small Surplus
Posted
on
On 29 November 2019, BC Hydro released disappointing results for April to September 2019. Transfers to regulatory accounts converted an initial operating loss of $611 million to a $25 million profit. Losses from hedging future interest rates remain a concern.
B.C. Hydro Loses $560 Million in Fifteen Months on Interest Rate Hedging Gamble.
Posted
on
B.C. Hydro's interest rate hedging program incurred dramatic losses from April 2018 to June 2020. The shareholder was protected by a regulatory account. How did the hedging program begin and why is it failing the ratepayers?
Quebec "Simplifies" Pricing of Electricity by Sidelining the Regulator.
Posted
on
The new Quebec government has significantly dminished the role of the independent body that regulated the operation and the rates of Hydro Quebec. The change is reviewed in the attached paper.
Should Ratepayers Subsidize the Electrification of Oil and Gas Production?
Posted
on
This Commentary reviews the government's assumption that B.C. Hydro ratepayers will subsidize the cost of electrifying the production of oil and gas in the noeth east reagion. It is a sudsidy because the cost is greater than the anticipated revenue. The social benefit of reduced carbon emissions should be paid by the government, not the ratepayers.
Insurance Brokers Association Exectutive Director Supports Public Auto Insurance Model
Posted
on
In the August edition of The Broker magazine Chuck Byrne, the exectutive director of the Insurance Brokers Association, wrote an editorial in support of the public model for the provision of compulsory insurance. Exerpts of this editorial are attached.
B.C. Hydro's 2018/19 Annual Report: Flat Sales but Finances Now Reflect GAAP
Posted
on
This paper provides highlights of B.C. Hydro's 2018/19 annual report. The finances are now based on public sector GAAP and reflect the one-time loss caused by the windup of the revenue deferral account.
Auditor General Removes Qualification on B.C. Hydro Accounting.
Posted
on
Auditor General Carol Bellringer has accepted the government's pledge to fully restore the B.C. Utilities Commission's authority to regulate B.C. Hydro and removed that part of her qualification on the government's 2018/19 financial statements.
B.C. Hydro Maintains That The B.C. Utilities Commission is Independent.
Posted
on
Despite the clear opinion of the province's auditor general to the contrary B.C. Hydro asserts that the B.C. Utilities Commission is independent. This paper looks at the issue.
Manitoba Plans for Electricity Rate Increases; B.C. Opts to Keep Rates Low.
Posted
on
Both Manitoba and B.C. public power utilities are facing major cost increases as large capital projects near completion. The Manitoba regulator is raising prices to smooth the transition, but the B.C. government has chosen to keep the rate increase below the increase in B.C. Hydro's costs. The NDP approach has many parallels to that of the previous government.
Quantifying B.C. Hydro's Electricity Surplus, 2014 to 2022.
Posted
on
B.C. Hydro has generated or contracted for power in excess of domestic sales for a number of years, and forecasts surpluses for a number of years to come. This Commentary reviews the acquisition and sales.
Ontario Legislative Committee Report Calls for More Transparency.
Posted
on
This Commentary reviews the recent report by the special committee of the Ontario legislature on financial transparency. The committee was struck to examine how the previous Liberal government ignored public sector accounting standards to lower electricity rates while still claiming to balance the 2017/18 budget.
A Closer Look at the Government's Financial Plan for B.C. Hydro.
Posted
on
Occasional Paper No. 67 reviews B.C. Hydro's new three-year financial plan and the F20 to F21 rate request filed with the B.C. Utilities Commission. The government has loosened the constraints on the independence of the regulator, but is it sufficient to satisfy the requirements of the public sector accounting standards?
New B.C. Hydro Financing Plan and More Authority for the BCUC Announced.
Posted
on
This commentary reviews the new five-year rates plan for B.C. Hydro, as well as the government's plan to restore the B.C. Utilities Commission's authority to regulate the public utility.
Former Premier Wynne Defends Electricity Rate Manipulation.
Posted
on
This paper reviews the testimoney of former Ontario Premier Wynne at the legislative committee on transparency, and compares the practice in Ontario to that practiced in B.C.
Ontario Seeks to Improve Financial Transparency and Accountability.
Posted
on
A committee of the Ontario legislature is holding hearings into how the previous Liberal government attempted to ignore the accounting rules to make the government books appear than was the case. What lessons might the B.C. government learn from this review?
Rate-Regulated Accounting at B.C. Hydro: A Primer.
Posted
on
The attached paper provides background for two reports on deferral accounts and B.C. Hydro's finances that are expected to be released shortly. The government has promised to fix the finances at our public utilitity, but the details on how this will be accomplished is unclear.
Senior Officials Review of BC Hydro Rate Options: Will New or Old Thinking Prevail?
Posted
on
This paper explores the options available to the senior official committee appointed to develop recommendations for a new rates plan for B.C. Hydro. Will the committee adopt the new approach of restoring integrity to financial management, or continue with the old practice of abusing the deferral accounts?
Ontario Government Agrees that Hydro Deferral Accounting Inappropriate. September 21, 2018.
Posted
on
The Ontario government has moved to clean-up certain accounting practices, including the financing of the "Fair Hydro" deferrals. The accounting adjustment of the electricity deferrals increased 2018/19 expenditures by $2,4 billion.
Goverment Begins Restoring Financial Integrity: What's Next for B.C. Hydro's Books? August 31, 2018
Posted
on
This paper provides an overview of why the government set aside $950 million for the 2017/18 fiscal year to begin to fix the financial troubles at B.C. Hydro. the restoration of proper accounting standards at the public power utility presents certain financial problems for the government.
Commentary: Populist Promises and the Cost of Electrictiy. May 18, 2018
Posted
on
The three main politic parties in Ontario are promising to reduce electricity prices, but are being vague as to what this will cost. It's time for the voters to become educated consumers.
Commentary on Matthew McClearn Article on Hydro Accounting in Ontario. April 22, 2018.
Posted
on
McClearn's article in the Globe and Mail provides a useful summary of many of the issues involved in the accounting dispute between the ontario auditor general and the government. Similar issues exist in British Columbia.
Inappropriate Regulatory Accounting: Ontario and BC Discussion of Auditors' Opposition. March 30, 2018
Posted
on
This 'Commentary' paper reviews the Ontario and BC public accounts committee discussion of the oppositin by the two auditors general of the application of reguatory accounting, and the impact to the governments' financial statements.
Have the NDP Succumbed to the Siren's Call of Deferral Accounting? November 27, 2017.
Posted
on
The current government's plan to freeze BC Hydro rates is the latest example of how governments have succumbed to the alure of short-term gain by manipulating BC Hydro's finances. Occasional Paper No. 46 traces the key events since 2011.
Submission to the BCUC Opposing the BC Hydro Rate Freeze. November 20, 2017
Posted
on
Can the BCUC approve BC Hydro's request to withdraw the 3% rate increase for 1 April 2018? I argue that it should not approve the request; includes final submission of 11 January 2018.
BC Auditor General Finds BC Hydro's 'Prescribed' Accounting Unacceptable. October 26, 2017.
Posted
on
The Auditor General has added a new reason to qualify her opinion of the government's 2016/17 financial statements; the fact that the 'prescribed' accounting standards do not conform to the public sector accounting standards. Read more in Occasional Paper No. 44.
What Would Ontario's Auditor General Make Of BC Hydro's 'Prescribed' Accounting Standard? October 22, 2017.
Posted
on
In a special report the Ontario Auditor General severely criticised that government's new regulatory deferal scheme; what would she make of the accounting practiced at BC Hydro to surpress the true cost of electricity?
What impact will the Site C project, whether it proceeds or is cancelled, have on BC Hydro's operating budget, and what are the options to pay for it? Occasional Paper No. 33 provides a high-level look at these questions.