NDP says Hydro power merger comes after unnecessary seven-year split
By Camille Bains
Tuesday, July 06, 2010
The provincial government's decision to move the BC Transmission Corp. back under BC Hydro was a failed multimillion-dollar experiment, say the Opposition New Democrats.
When the two entities were split seven years ago, the Liberals said the policy change was aimed at managing Hydro's transmission grid through an independent company as part of a new energy plan.
NDP energy critic John Horgan said Tuesday that not much will change now from the way things used to be except that taxpayers will be on the hook for perhaps $100 million a figure the Liberals are disputing.
“The change in activity will be negligible but the cost to ratepayers will be significant,” Horgan said. “There were new communications branches established, new executives hired, a whole new board, office space was leased out.”
He said the unnecessary duplication of services has increased rates that are projected to go up by 29 per cent by 2013.
But Energy Minister Bill Bennett said separating the two entities cost $12 million, although he couldn't say what that amount covered.
He said Horgan is wrongly tying a possible nine per cent rate increase which has yet to be approved by the BC Utilities Commission to the Hydro split and merger.
“The rate increase that ratepayers will face in B.C. will not be tied to that,” Bennett said. “It'll be tied to the fact that we need to invest in our assets.
“Frankly the reason we need to invest in our assets is because there was a rate freeze on in the 1990s when Mr. Horgan was advising the premier of the day. But I know what he's trying to do, he's trying to connect these two things that shouldn't be connected.”
“The merger is actually going to save ratepayers money, not cost them,” Bennett said, adding the Liberals were forced to split the two entities because of regulation changes in the United States, where BC Hydro buys and sells electricity.
“I'm advised that there were regulatory rules in the U.S. that required (power) generation to be separated from transmission,” Bennett said, adding a change in regulation means British Columbia can go back to the way things were.
BC Hydro spokeswoman Susan Danard said the move back to a single entity will result in hefty savings for the Crown corporation.
“We have eliminated 150 positions and over the course of a few years that will save us $30 million a year,” she said.
Danard said that up until recently, there were 5,700 employees working at BC Hydro and 470 at the BC Transmission Corp.
But after the layoffs, a total of about 6,000 people will be employed by the Crown corporation, she said.
However, she wasn't able to say how many employees worked at Hydro before the two entities were split.
Bennett said that over the next few years, the government will be investing in dated infrastructure built in the 1950s and 60s in an effort to increase power generation in a province where residents pay the third cheapest electricity rates in North America.
“We're not talking about fundamentally changing the electricity rates in the province and having them go up, for example as high as they are in Alberta or many of the U.S. states,” he said.
In April, the B.C. government introduced the Clean Energy Act to boost independent power production and cut air pollution.
Then-energy minister Blair Lekstrom said the province's clean and renewable resources will help ensure B.C. is self-sufficient in electricity by 2016 and can reduce greenhouse gas emissions and encourage conservation.
But at the time, Horgan said he fears the new policy will lead to higher power rates as the government offer subsidies to independent power producers
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