||Volume 16, Number 4, March 2004
Ten reasons why privatizing electricity and breaking up B.C. Hydro are a bad deal for British Columbians
Higher rates for consumers and businesses
After 10 years of frozen rates that saved consumers millions and helped create jobs, B.C. Hydro electricity rates are going up next year, Energy and Mines Minister Richard Neufeld has confirmed. But will the rate increases ever stop? Not with the privatization of electricity. Rates in B.C. are the third lowest in North America, thanks to public power ownership. But all new power generation will be privately owned and billed at market rates. Ontario deregulated its energy sector in May 2002, and the price of electricity rose 33% in just one year. Alberta’s experience was even more devastating after deregulation: The price of electricity rose over 500% between June and October 2000. Why wouldn’t the same thing happen in B.C.?
Taxpayers will have to subsidize private power
It’s costing the province tens of millions of dollars to dismantle and privatize B.C. Hydro. Giving away one-third of B.C. Hydro’s operations and jobs to Bermuda-based Accenture alone cost us more than $60 million. Bill 10 and Bill 39 transfer public control of our electricity system over to the private sector. But breaking up B.C. Hydro into three parts—generation, distribution, and transmission—ultimately means less public accountability, more bureaucracy, and increased costs to ratepayers.
Privatization will lead to public service cuts, higher taxes
On average, B.C. Hydro returns between $300 million and $800 million in annual revenues to government. Those revenues go to pay for healthcare, education, and other social programs. Privatizing existing operations and relying on private power producers will reduce income available to government and lead to service cuts, higher taxes, or both.
B.C. citizens oppose B.C. Hydro privatization
The provincial government never consulted with the people of B.C. before privatizing B.C. Hydro’s future. Polls consistently show that more than 80% of British Columbians oppose the sale of B.C. Hydro. And more than 60,000 British Columbians have signed a letter of intent supporting B.C. Citizens for Public Power’s class-action lawsuit to stop the privatization.
B.C. municipalities want public power
In the past two years, more than 90 B.C. municipalities have passed resolutions opposing the end of public power. In 2002, the Union of B.C. Municipalities unanimously adopted a motion rejecting the transfer of B.C. Hydro operations to Accenture.
Privatization will hurt the environment
B.C. Hydro has been banned by the provincial government from developing any new power projects, leaving all future generation to the private sector. That means B.C. will increasingly have more coal-fired, natural-gas-fired and wood-waste-burning sources of electricity, which create far more pollution than B.C. Hydro’s hydroelectric dams. And unlike a public utility, private companies have little incentive to conserve power. The opposite is true: the more they sell, the higher their profits.
Privatization is leading to U.S. control
Plans are under way to have B.C. join RTO West, a "regional transmission organization" controlled by American corporations that will run Hydro’s transmission system. The RTO will decide how much to invest for electrical infrastructure, who has access, and how much will be charged to transmit power. Even public power utilities in the United States, such as Seattle City Light, oppose the RTO West proposal, but the B.C. government thinks it’s a great idea.
Privatization is costly to consumers
The cost of electricity privatization became well-known in the Enron scandal and the California blackouts. In a privatized system, large utility companies benefit by controlling the market and by making secret deals. Meanwhile, the public is on the hook for cost overruns and maintenance of transmission lines. Enron showed that a handful of private producers can create power shortages to inflate the price of electricity. During California’s crisis, publicly owned power utilities had enough power and kept prices fair, but customers of private energy corporations were hit with huge price surges and blackouts.
Less regulation of power
In November 2000, Gordon Campbell told the Canadian Institute of Energy, "It’s critical that we restore the independence of the [B.C.] Utilities Commission to properly do its job on behalf of utilities and consumers alike without political interference." Yet the government used new legislation to stop the BCUC from proceeding with a requested review of the Accenture takeover deal and refuses to make public the details of the multimillion dollar contract.
Privatizing electricity in B.C. may be irreversible
Private power companies that produce electricity in B.C. will be protected by the North American Free Trade Agreement and other international trade deals, making it almost impossible to return to a publicly owned utility. The only way to get out of such agreements would be to buy back what was once ours and then compensate private corporations for "lost profits" they may have made in the future—an enormous financial cost.
– B.C. Citizens for Public Power, www.citizensforpublicpower.ca