Media Interviews by Richard McCandless
This provides a single source for a number of media interviews provided by Richard McCandless.
This provides a single source for a number of media interviews provided by Richard McCandless.
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.
A recent report suggests that BC Hydro is winding down its costly interest rate hedging program. This paper updates earlier commentaries.
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.
Occasional Paper No. 73 provides a summary of changes in a number of BC Hydro's key financial and service measures for the last five years.
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.
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.
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.
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.
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.
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'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?
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.
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.
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.
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 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.
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.
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.
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.
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.
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?
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.
On 13 February 2019 the government released a comprehensive review of the purchase of private electricity by B.C. Hydro https://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/electricity-alternative-energy/electricity/bc-hydro-review/bch19-158-ipp_report_february_11_2019.pdf. The review concluded that a) BC Hydro bought too much energy and energy with the wrong profile, b) BC Hydro paid too much for the energy it bought, and c) BC Hydro undertook these actions at the direction of Government.
https://vancouversun.com/opinion/columnists/vaughn-palmer-ratepayers-zapped-by-hydro-report-that-reveals-shocking-interference and the response of Clean Enery BC https://www.cleanenergybc.org/reports-publications/response-to-davidsons-report
In early February Auditor General Bellringer released her report "Rate-Regulated Accounting at B.C. Hydro" (http://www.bcauditor.com/sites/default/files/publications/reports/OAGBC_RRA_RPT.pdf, which provides more explaination for her decision to qualify the government's financial statements for the last two years; see https://vancouversun.com/news/politics/political-directives-have-undermined-b-c-hydros-finances-auditor-general-says. On 7 February 2019 Vaughn Palmer commented on some of the implications at https://vancouversun.com/opinion/columnists/vaughn-palmer-hydros-deferrals-problem-about-to-become-a-political-problem.
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.
My comments on the results and the lack of discussion on accounting changes or future rate increases.
Commentary on certain aspects of the Ontario government's plans regarding electricity pricing and auto insurance regulation.
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?
In 2016 BC Studies published my article on how the Liberal government manipulated the finances of BC Hydro to keep the annual profits and dividends high while surppressing the increaae in electricity rates: https://ojs.library.ubc.ca/index.php/bcstudies/article/view/187787/186354
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.
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?
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.
A public inquiry is now underway designed to examin the approval process for the $12.7 billion hydroelectric dam. As Konrad Yakabuski writes: "Whether it involves provincially-owned hydroelectric behemoths in British Columbia, Manitoba or Quebec, or the Crown-owned nuclear-dominated Ontario Power Generation, politically-driven energy policies across Canada have saddled ratepayers and taxpayers with billions of dollars in extra debt."https://www.theglobeandmail.com/opinion/muskrat-falls-inquiry-wont-save-newfoundlanders-from-a-127-billion-sinkhole/article37052291/https://www.theglobeandmail.com/canada/article-inquiry-into-muskrat-falls-megaproject-boondoggle-to-begin-in-2/
Occasional Paper 61 reviews certain aspects of BC Hydro's operations and finances for the last five yers.
This commentary paper explores in more detail some of the issues involved in fixing the accounting policies at B.C. Hydro.
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.
A short commentary on the regulator's 18 July 2018 approval of the purchase of Teck's interest in the Waneta Dam.
Expensive electricity was a major issue in the recent Ontario election. The new government succeeded in forcing the board and CEO Mayo Schmidt to resign, but lower prices have only been possible by transferring cost to taxpayers and future generations; https://www.theglobeandmail.com/canada/article-entire-ontario-hydro-one-board-to-resign-ceo-to-step-down/ and https://www.theglobeandmail.com/opinion/article-doug-ford-kneecaps-hydro-one/ and https://www.cbc.ca/news/canada/toronto/doug-ford-hydro-one-1.4743097 and https://www.theglobeandmail.com/business/article-doug-ford-used-legislative-threat-to-oust-hydro-one-ceo-board/
A comment on minister Mungall's statement and the staff review of BC Hydro's costs.
Barrie McKenna in the Globe and Mail political meddling for causing the high price of electricity in Ontario; https://www.theglobeandmail.com/business/commentary/article-blame-political-meddling-not-ceo-pay-for-ontarios-dysfunctional/
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.
A comment in response to Vaughn Palmer's article about the BC Investment Management Corporation and the well-funded public pension plans.
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.
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.
Rob Shaw of the Vancouver Sun summarizes the Utilities Commission's decision http://vancouversun.com/news/politics/b-c-utilities-commission-rejects-b-c-hydro-rate-freeze; Les Leyne of the Tmes Colonist comments http://www.timescolonist.com/opinion/columnists/les-leyne-ndp-s-hydro-rate-freeze-thaws-in-a-hurry-1.23192381. My comments are also attached.
Brady Yauch of the Consumer Policy Institute discribes how electricity pricing in Ontario is now determined by politics rather than economics. BC Hydro rates have been set by political decisions since 2012 when the governemt ordered the regulator to approve lower than required rates. https://cpi.probeinternational.org/2017/11/09/its-the-end-of-energy-regulation-in-ontario-as-we-know-it/
BC Auditor General Carol Bellringer is preparing to become BC Hydro's external auditor, which will put more pressure on the government to allow BC Hydro to conform to national public sector accounting standards. See Les Leyne http://www.timescolonist.com/opinion/columnists/les-leyne-watching-b-c-hydro-is-a-growth-industry-1.23137605 and Vaughn Palmer http://vancouversun.com/opinion/columnists/vaughn-palmer-bellringer-anxious-to-plug-into-b-c-hydros-accounts
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.
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.
As a follow-up to Occasional Paper No. 45, this paper looks more deeply at the question of affordability in the pricing of BC Hydro's electricity.
Andrew MacLeod of The Tyee reports that Finance Minister Carole James intends to fix BC Hydro's accounting practices, but it will take time; https://thetyee.ca/News/2017/10/25/Fixing-BC-Hydro-Accounting/?utm_source=daily&utm_medium=email&utm_campaign=251017
This paper discusses some aspects of the new plan to freeze BC Hydro rates for 2018.
Resource economist Robert McCullough's testimonoy before the Site C panel on October 14th http://www.sitecinquiry.com/wp-content/uploads/2017/10/00614_TTP-2_2017_10_14_Vancouver_TP-Transcripts-V14.pdf pg. 1562 to 1581; opinion piece in the Vancouver Sun of October 30th http://vancouversun.com/opinion/op-ed/opinion-site-c-proponents-fall-prey-to-sunk-costs-fallacy
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.
The Tyee published my piece which describes the Ontario Auditor General's special report on a government scheme to subsidize electricity rates, and how electricity rates are subsidized in British Columbia; https://thetyee.ca/Opinion/2017/10/24/Will-NDPEnd-BC-Hydro-Wild-West-Accounting/?utm_source=daily&utm_medium=email&utm_campaign=241017 also Andrew MacLeod's comments from Carole James https://thetyee.ca/News/2017/10/25/Fixing-BC-Hydro-Accounting/?utm_source=daily&utm_medium=email&utm_campaign=251017
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?
This email informs Auditor General Bellringer of recent developments respecting BC Hydro's accounting for future unbilled and uncollected revenue.
The use of deferral accounting allows debt to be transformed into and asset, a practice that the BC Lberal government abused with respect to BC Hydro's books. There are there lessons for the new NDP government in the Ontario Auditor General's recent report; http://www.auditor.on.ca/en/content/specialreports/specialreports/FairHydroPlan_en.pdf See media reaction; http://ottawacitizen.com/news/local-news/reevely-hiding-billions-in-hydro-debt-unacceptable-ontarios-auditor-general-says and http://nationalpost.com/pmn/news-pmn/canada-news-pmn/auditor-general-set-to-report-on-ontarios-25-per-cent-hydro-bill-cuts.
My article in The Tyee discusses the possible cost to BC Hydro ratepayers of either proceeding or cancelling the Site C project; https://thetyee.ca/Opinion/2017/07/13/How-Much-Will-Site-C-Gambling-Debt-Cost/?utm_source=daily&utm_medium=email&utm_campaign=130717
Occasional paper No. 34 reviews the likely impact of three major hydroelectric infrastructure projects on electricity rates.
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.
Reprint of my article in today's Tyee; https://thetyee.ca/Opinion/2017/06/16/NDP-Faces-Mess/?utm_source=daily&utm_medium=email&utm_campaign=160617
Given the pending change in government, I recommended that the BC Utilities Commission not approve any of the discreationary items in BC Hydro's F17 to F19 rate request.
In May, Manitoba Hydro requested a rate increase of 7.9% for 2017 and 2018, with an indication of the same increase for the following three years. The publicly owned power utility is facing a major deterioration inits finances due to major capital projects and a flat demand. What lessons may a new government in BC learn from the Manitoba experience?
During the April 11, 2016 Question Period the minister of energy attempts to defend BC Hydro borrowing 100% of the dividend paid to the government; https://www.youtube.com/watch?v=MLNr3RkqPyA, and https://www.youtube.com/watch?v=qs3jntTrgNI
This paper reviews the recent report of the Ontario Financial Accountability Office on that government's plan to use a deferral account to surpress electricity rates. A comparison to the revenue deferral practiced by BC Hydro is also provided.
A Fact Check on Hon. Bill Bennett's comments on the Jon McComd (CKNW) show, commenting on rate increases and BC Hydro's debt.
My article in the Tyee reviews the implications of the Liberal Party's four year revenue estimates for BC Hydro and ICBC;https://thetyee.ca/Opinion/2017/05/01/Rate-Increases-BC-Hydro-ICBC/?utm_source=daily&utm_medium=email&utm_campaign=020517
Marvin Shaffer criticizes the Liberal government's politicization of BC Hydro; http://vancouversun.com/opinion/op-ed/opinion-politics-versus-good-governance-for-b-c-hydro
A review of the financial impacts of the cold and snowy winter on the finances of BC Hydro and ICBC.
Big banks have been pursuing questionable tactics to enhance revenue and profits, but BC Hydro has a unique way to achieve its revenue targets.
This paper suggests that BC Hydro's annual target rate increase of 2.6% is optimistic, as is the 10-year financial plan.
AMPC submissions of 2013 and 2017 call for BC Hydro to moderate cost and rate increaes; http://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/electricity-alternative-energy/electricity/iepr/iepr_submission-association_of_major_power_consumers_round_1.pdf and http://www.bcuc.com/Documents/Proceedings/2017/DOC_48816_C9-7_AMPC-Evidence.pdf
The Globe and Mail is not impressed by the Ontario government's move to reduce the cost of electricity; http://www.theglobeandmail.com/opinion/editorials/lower-electricity-rates-dont-fall-for-premier-wynnes-power-move/article34195391/ and http://www.theglobeandmail.com/news/national/will-kathleen-wynnes-last-ditch-hydro-fix-just-add-to-the-mess/article34182155/ also an editorial by The National Post; http://news.nationalpost.com/full-comment/national-post-view-kathleen-wynnes-liberals-bail-themselves-out-with-public-money-again
On March 3, 2017, Policy Options published my article comparing how the governments of Ontario and BC are subsidizing electricity prices: http://policyoptions.irpp.org/magazines/march-2017/how-bc-politicized-electricity-rates/
This paper explores BC Hydro's flat domestic sales and its high profits during the last five years, and suggests that the recording of future ubapproved and unbilled revenue helps explain the healthy bottom line.
Norman Farrell's post shows that domestic demand for BC Hydro's power has been flat while costs are rising;https://in-sights.ca/2017/02/09/awash-in-power-at-premium-prices/
The senior officials' 2011 review of BC Hydro; http://www.ceaa.gc.ca/050/documents/p63919/97006E.pdf
Auditor General John Doyle and Charles Reid of BC Hydro review the Auditor's recent report on regulated accounting; https://www.leg.bc.ca/Pages/BCLASS-Legacy.aspx#%2Fcontent%2Flegacy%2Fweb%2Fcmt%2F39thparl%2Fsession-4%2Fpac%2Fhansard%2Fp11125x.htm starting at 1257 hrs.
This paper describes how an obscure 2011 cabinet directive allows BC Hydro to apply regulatory accounting without the fundamental componet -- an independent regulator.
The latest Moody's report again warns that BC Hydro's growing debt is a concern as it may require a taxpayer bail-out; http://vancouversun.com/news/politics/b-c-s-credit-rating-at-risk-as-hydros-debt-grows
Richard McCandless wonders why BC Hydro has a large and growing pension liability; deferral accounting may provide a reason.
Rob Shaw (Vancouver Sun) reports on jinterviewhis with Hon. Bill Bennett, who says Site C is political; http://vancouversun.com/news/politics/cabinet-political-staff-control-b-c-hydros-public-relations-on-site-c-dam
A Globe and Mail summary of the supply and pricing system in Ontario; http://www.theglobeandmail.com/news/national/why-does-electricity-cost-so-much-in-ontario/article33453270/
Richard McCandless posts Occasional Paper No. 19 on some 2016 stories about BC Hydro's finances that were either under-reported, or recieved no media coverage.
Gwyn Morgan, writing in the Globe and Mail, cautions about erronous assertions displacing objective facts about energy and climate change;http://www.theglobeandmail.com/report-on-business/economy/economic-insight/three-post-truths-about-global-energy-and-climate-change/article33465520/
My summary of BC Hydro's 2016 Q2 rseults, and a forecast to year-end.
Rowland Harrison's 2014 article on regulatory tribunal independence in Canada from the Energy Regulation Quarterly outlines the key attributes of independnce; http://www.energyregulationquarterly.ca/articles/tribunal-independence-in-quest-of-a-new-model#sthash.NZZpf46M.NvntTDP4.dpbs
Recently, the BC Utilities Commission asked BC Hydro whether its recording of future unapproved revenue conformed to accepted accounting principles. I forwarded BC Hydro's answer, together with my comments, to Auditor General Carol Bellringer.
BC Hydro data on domestic sales 2006/07 to 2015/16 and three year forecast.
An article from the Globe and Mail on how the growing use of non-standard accounting measures can distort the true financial condition of a company; http://www.theglobeandmail.com/globe-investor/inside-the-market/boost-earnings-manipulate-accounting-investing/article32021010/
Andrew MacLeod in The Tyee writes about my 10 June 2016 presentation to the Utilities Commission respecting BC Hydro's 2016 rate request;http://thetyee.ca/News/2016/06/15/Government-Manipulating-BC-Hydro-Finances/?utm_source=daily&utm_medium=email&utm_campaign=150616
Marvin Shaffer comments on how the government's clean energy policy and the promotion of private power generation has driven up BC Hydro's costs;http://www.policynote.ca/how-the-so-called-clean-energy-plan-wreaks-havoc-on-bc-hydros-rates/