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BALDREY: NDP turns up the heat on BC Hydro file

Ask most British Columbians what they expect from BC Hydro and the answer would likely be “keep my power on and keep my rates low.

Ask most British Columbians what they expect from BC Hydro and the answer would likely be “keep my power on and keep my rates low.”

Because the Crown corporation does just that — although the electricity rates continue to climb — it is viewed in mostly positive ways. Anyone who has had a BC Hydro lineman come to their house in a windstorm to reconnect a power line (you can put me in that crowd) is understandably grateful for and even admiring of much of the services BC Hydro offers.

Indeed, a recent survey by BC Business Magazine ranked BC Hydro the most influential brand in all of the province, even giving it a high “love” score from the public.

However, BC Hydro is owned by the provincial government and increasingly, the government’s use (or misuse) of the corporation raises some serious questions that go beyond keeping the lights on in everyone’s home.

Questionable accounting practices, costly budget overruns and an avoidance of independent oversight on some matters have led critics to accuse the B.C. government of using BC Hydro as a whipping post to suit its political interests.

Historically, one can make the argument this has always been the case, to varying degrees. The Social Credit government of W.A.C. Bennett created BC Hydro after nationalizing B.C. Electric for political purposes.

He used BC Hydro to build a series of hydroelectric dams, which were controversial at the time but are now considered invaluable heritage assets that help keep B.C.’s electricity costs amongst the lowest in North America.

The NDP government of the 1990s also used BC Hydro for political purposes, and became the first one to extract an annual financial dividend from the Crown corporation. It also deferred much of the spending required for maintenance and refurbishment of BC Hydro’s various assets, which is part of the reason so much is being spent in that area now.

But the B.C. Liberals have taken things to an entirely different level altogether. The government has locked-in contractual obligations to independent power producers to the tune of nearly $60 billion, which means that in some years, BC Hydro will likely be paying over-market prices for electricity it doesn’t need.

Of course, there is the massive Site C dam project, which the government has refused to send to the B.C. Utilities Commission for an independent assessment. As a result, the project’s $8.5 billion estimated cost seems to be a best-guess estimate more than anything.

Then there is the shell game going on with what is known as deferral accounting. Simply put, BC Hydro is “deferring” billions of dollars of spending to future years so that massive spending doesn’t show up on the books in any current year.

Yet the B.C. Liberals continue to take that annual dividend — more than $800 million over the next three years — even though the corporation isn’t actually making money and so has to borrow to pay the government.

NDP energy critic Adrian Dix led a forceful critique of these practices in the legislature this past week, peppering his questions during spending estimates for BC Hydro with words and phrases like “manipulation,” “bait and switch” and “fudge the accounts.”

Energy Minister Bill Bennett, naturally, didn’t agree with Dix’s take on things. The two politicians had a number of heated exchanges, both during spending estimates and during question period, where Bennett accused Dix of “lying,” a parliamentary no-no.

Say what you want of Dix’s performance as a party leader, but don’t underestimate his effectiveness as a knowledgeable and dogged critic of the government’s handling of BC Hydro. For his part, Bennett keeps insisting all is well and that all this creative accounting actually keeps hydro rates lower than they might otherwise be.

But all this borrowed money will catch up with BC Hydro customers (i.e. you and me) eventually. Bennett has promised to end the borrowed dividend scheme by 2018, but the B.C. Liberals are clearly banking on a forgiving public that sees keeping the lights on — and not worrying about accounting shell games — as its top priority.

Keith Baldrey is chief political reporter for Global BC. He can be reached via email at

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