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Let's see more Crown reports like Hydro's

One of the first thoughts to cross my mind as I read a government panel report of BC Hydro operations was "Why aren't more of these produced?"

The Hydro report provides a great glimpse into the inner workings of the huge Crown corporation, and bared a lot of things for all to see, both positive and negative.

It would be great to see a similar panel - the one in this case was made up of three civil servants - delve into the operations of other Crowns such as ICBC and B.C. Lottery Corporation (not to mention the health authorities).

The Hydro report paints a picture of a corporation that is top-heavy with bloated salaries and immersed in a "gold standard" corporate culture that strives for excellence but which also becomes mired in a cautious, self-protecting approach to things.

But the report also shows how BC Hydro has been used as a cash cow and treated like a political football by successive provincial governments for decades.

The personal compensation issue is embarrassing for the Crown corporation. Employees are paid a massive amount of overtime, and pretty well everyone - with the exception of one per cent of the workforce - gets performance bonuses as well. Despite all the hue and cry over the years from its unionized staff that the corporation was being shifted to the private sector, the fact is BC Hydro has actually been growing in size year after year.

A Vancouver Sun data base shows an astounding 2,371 people employed by BC Hydro make more than $100,000 a year. That represents more than 16 per cent of the extended public sector for the entire province.

Five individuals - all members of one of the corporation's unions - made more than $100,000 in overtime alone. In all, overtime cost more than $50 million, and performance bonuses approached that high number as well. (Of course, I don't begrudge any BC Hydro linemen being paid overtime in a dangerous job to restore power at 2 a.m. during a storm.)

But for all the hits BC Hydro is taking for the report, it can take solace in the fact that the panel has opened the door for some changes that may benefit the corporation.

For example, Hydro pays the provincial government more than $300 million a year in water rental fees, which the panel notes is twice the rate paid by its counterparts in Manitoba and Quebec (the two other provinces where hydro is the primary energy source).

This is one of the examples of BC Hydro being treated like a cash cow by government. Halving those water rental rates could cut overall hydro rates by more than four per cent (the panel estimates that $35 million is equal to a one per cent increase or decrease to hydro rates).

The panel also recommends that BC Hydro be allowed to use a more flexible formula in determining what constitutes energy "self-sufficiency," which it is mandated to achieve a few years from now.

By moving away from using a worst-case scenario (severe drought conditions) to measure self-sufficiency, BC Hydro will not have to buy as much power from private power sources, which could save it a bundle of money and could also ease the pressure that is pushing hydro rates steadily upward.

This change to the definition of self-sufficiency is a repudiation of one of former premier Gordon Campbell's last acts before he announced he was stepping down. Long a champion of growing the province's private power industry, Campbell tied BC Hydro's hands in a way that would have benefited that private industry.

But one recommendation from the panel may prove problematic. It wants BC Hydro to defer more than $800 million in capital spending - money largely used to upgrade and maintain its vast network of dams, generators and transmission lines.

The report itself includes a section that examines the impact of not spending enough on infrastructure. Starting when Bill Vander Zalm became premier, through the NDP administrations of the 1990s and the first term of the B.C. Liberals, BC Hydro was effectively forced to spend a minimum on capital.

The result of this capital starvation has been recent breakdowns of key power generation stations, which costs money and lost service to ratepayers. One can only hope cutting that $800 million doesn't make a current problem even worse.

But, all in all, the panel's report on BC Hydro is a good, informative read. Like I say, I wish we could see more of them. Keith Baldrey is chief political correspondent for Global BC.

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