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1. The Decline of Public Power in British Columbiaa work in progress, last updated November 27, 2007. Current copy available atwww.members.shaw.ca/dcol/publicpowerpres.pps SupportPublicPower@telus.net contact@ourrivers.ca

2. Sidenote: I want to stress that I am only discussing economic and breach of public trust issues in this presentation.I would be happy to discuss environmental issues (which are worse with private power for various reasons, including loss of oversight and protection) with anyone as well, BUT the principal issues in the decline of public power, and the sudden rise of private power in BC do not directly involve environmental issues to the same degree as the BC economy itself, and loss of public economic value, and I will not be discussing them in this short presentation. • For those less familiar with the phrase “Run-of-the-River” powersite: This is a smaller or “micro-hydro” technique where water is NOT substantially dammed behind a storage reservoir, but is instead immediately diverted into a pipe or tunnel, dropped and directed into turbines to generate electricity, and then returned to the river. This is nearly always done above levels where fisheries are an issue. • IPP stands for Independent Power Project, Independent means Private.

3. Cranberry Creek, Revelstoke, bringing the water overground.

4. Cranberry Creek, Revelstoke, final drop to the power station.

5. The Beautiful Ashlu, Squamish, Kayakers’ Joy

6. Ashlu River, Squamish, Powerplant Site Construction

7. Ashlu, Squamish, Tunnel Drilling

8. Comparison ofNorth American Power Rates • Graph is from Hydro Quebec 2000, more current figures are similar, but graphics in pdf were not as easily available for PowerPoint. • so Montreal (2nd) is 100%. • BC is a close third. • All lowest cost are public power. • BC residential rate is still roughly 6¢/kWh, industrial rates lower. • Publicly owned power is always going to be more manageable by the public, delivering best value to residents, business and provincial revenue.

9. The start of the decline of public power in BC • Earlier, very little new public power was built since the W.A.C. Bennett years - politically problematic to build, not really needed yet. • 2001: BC Liberal Election Bagman Patrick Kinsella was also an Alcan “Communications Consultant”. • Shortly afterward (2002), Alcan’s desire for the sale of private power becomes the new BC Energy Plan. • The BC Energy Plan says that there is to be no new public power; all new power is to be private. (Likely, even Site C will be private if and when built too, losing its potential to the public forever.)

10. So what’s the excuse for private power, instead of the public power we’ve done so well with for the last half century? • So many reasons, including fewer political problems from environmental, conservation & NIMBY groups, because problems are reflected onto the private companies, not the local MLA or government. • Fundamental belief in more private economy instead of our current mixed economy, desire to reduce unionized labour force in energy, . . & other reasons. • But mostly private power is about a huge giveaway of public property to friends of government, who then benefit both the party as a whole through political donations, and individual members of the inner cabinet when they retire from politics.

11. “We can’t afford new public power”: Does private power reduce public debt? • Although this is a widely expressed reason, in fact our future contractual obligations to buy BC private power (at higher, and escalating rates than we would pay through normal current market purchases) will cost us far more than if we had built the same projects, and retained them as public property, like the Bennett Dam. • Last year our future contractual obligations to purchase private power (read future public debt) increased by $15 Billion, bringing the current total future electricity contractual obligations to $28 Billion. (Vancouver Sun article by editor Craig McInnes)

12. So what do we get for that? • Well, unlike paying off a mortgage on your house, where you end up owning the house: after we pay our future contractual obligations for the private power, we own nothing, and the private power companies are free to export, or charge North American export rates in the next contract. • If this sounds like a bad idea, you’re right. As Craig McInness of the Vancouver Sun said when he pointed out the obligations: why are we changing from public power? “If it ain’t broke, don’t fix it.” • Renting power back, especially after we’ve given away the sites, makes less sense than renting your clothes.

13. What else hurts about BC private/independent power? • The powersites for BC private power (numbering now around one thousand sites) are simply being GIVEN to friends of government, without any bidding process, without any proper payment for sites worth millions - some billions of dollars. The licence fee is $10,000 for a large project, less for a smaller one. We are not remotely receiving proper value for these sites.

14. Why do we expect private power to be exported when these expensive contracts end, instead of helping to close the “import gap”? • IPPBC luncheons and meetings between independent power lobbyists and the BC Minister of Energy absolutely focus on transmission and sales of private/independent power to the US. • The following slides are from an invitation to IPPBC members to a luncheon with the minister entitled “Wires & Buyers”; any formatting issues are caused by its capture from the internet. Further IPPBC meetings with the minister and energy staff also promote the same theme of getting on the bandwagon or “gold rush” of private power so the power can later be exported.

15. Energy Minister Luncheon • IPPBC Forum & AGM • Date: Thursday, May 27, 2004 • Location: Four Seasons Hotel, 791 West Georgia St,Vancouver, B.C. • 11:30 am Registration and Networking • 12 noon Lunch • 12:30 pm Speech by Honourable Richard Neufeld, BC Minister of Energy & Mines

16. 1:00 pm Forum Panel #1: BUYERS • Bev van Ruyven, Senior Vice President, Distribution, BC Hydro • Ron Monk, Mgr Energy Planning & Project Manager for 2004 IEP, BC Hydro • Brian Moghadam, Manager Business Development, Powerex • Dan Potts, Joint Industry Electricity Steering Committee • Eric Markell, Sr. VP Energy Resources, Puget Sound Energy Inc. • 2:15 pm Forum Panel #2: WIRES • Yakout Mansour, Senior V.P., System Operations & Asset Management, BCTC • Scott Woronuik, Vice-President Investment Planning and Strategy, BCTC • Laura Letourneau, Manager of Market Operations, BCTC • Al Boldt, Mngr Energy Acquisition (incl. Generator Interconnection), BC Hydro • Brian Silverstein, Acting V.P. Transmission Planning, Bonneville Power Authority • 3:30 pm Annual General Meeting (no charge for members) • Presidents Report: 2003 Achievements and 2004 Outlook • Reports of other Officers and sub-committees • Small Hydro Glenn McDonnell • Green Power David Kiess/Nigel Protter • Cogeneration and CBG Paul Willis • Thermal IPPs Rick Hopp • Regulatory Issues Harvie Campbell • Transmission & Interconnection Jim Gemmill • Key issues and upcoming items David Austin • Question and Discussion All Members • Treasurers Report and Appointment of Auditor • Name Change and Membership Dues, Election of New DirectorsCost: $90 for members, $120 for non-members. Add GST. • Registration: Call (604) 980-3075 or on-line www.ippbc.com

17. Has the minister otherwise let slip that independent power can/will be exported for private profit?Richard Neufeld Column, Vancouver Sun, page A19, October 29, 2004 – time of the 2004 IPPBC AGM, exact paragraph quotes: This is Neufeld’s own column, not an interview, so there is no mistaking his intentions:“However, under our energy plan, IPPs are not restricted to selling their electricity under long-term contracts to just BC Hydro. In fact, IPPs are free to sell their electricity directly to large industrial buyers, the export market, Powerex or BC Hydro on a competitive basis.”“This plan is working – we have created huge opportunities for IPPs in B.C., which has resulted in past and planned investments worth over a billion dollars in IPP projects throughout the province.”“Richard Neufeld is B.C.’s minister of energy and mines.”

18. Are other US Companies publicly involved in efforts to import BC private power? . . example http://www.cpuc.ca.gov/published/Graphics/65113.PDF March 1, 2007 Decision of the California Public Utilities Commission: Summary: “This decision grants Pacific Gas and Electric Company (PG&E) authority to record up to $14 million in costs for external consultants to prepare a study to evaluate the feasibility of obtaining wind-generated and other renewable electric power from various regions in British Columbia,Canada (BC Renewable Study). . . . PG&E will record the study costs in a new BC Renewable Study Balancing Account and may seek recovery of the costs of this account when it also recovers its Utility Generation Balancing Account as a part of the Annual Electric True-Up.” What this means is that the California companies are so confident of being able to obtain private power from BC (the same private power that’s supposed to be here to “close the energy gap”) that they are moving to spend money on design and are publicly asking their California Public Utilities Commission to write off the costs associated with this design.

19. What happens in the future, when this BC private power, supposedly intended to fill the “import gap”, is instead exported? • This is the supreme irony of the BC “clean, green” private power giveaway: Unless we pay private companies much higher North American rates for “our own” BC private power in the next contracts, that power will be exported. • So the “clean, green” power goes to California, while we burn expensive gas, dirty coal, or go nuclear, for our own domestic power, because the best run-of-the-river and wind powersites will already be gone.

20. How far are we already into private power in BC? • Around a thousand previously publicly owned run-of-the-river powersites, (and now windpower sites) have been given away to friends of government, to be followed by government electricity purchase contracts, to be taken to the bank by the companies for total self-financing of the projects. Approvals are now moving at lightning speed since government’s Bill 30 (April 2006) eliminated the need for regional approval of powersites. • The next slide is a 2006 sampling of those just in our Sea-to-Sky Country. Bowen Island, Howe Sound and Squamish are toward the bottom, Whistler in the middle, and Lillooet is in the top right. • Blue squares are IPPs in operation. • Red dots are IPPs in application. • (A further Google Earth presentation shows the hundreds of sites given away around the whole province. Links will be given at the end of this presentation.)

21. IPPs in S2S Country, 2006

22. Again, why is this an unforgiveable giveaway, and what many believe is a breach of public trust? • SFU Economics Professor John Calvert makes the point that all the formerly publicly owned powersites have extremely high known values (and were actually earlier catalogued at BC Hydro expense for future public power use). They are not unknown or undiscovered like oilfields, where we must let private companies get the full financial benefit from discovering them. • Yet these sites are being given away without even a bidding process, as if they had no value, for $10,000 to the first company asking. • I can do the math for various sites with anyone later, but a 50 MegaWatt site (like our Sea-to-Sky Ashlu site) at current California rates can produce 50 MW x 1000 kW/MW x 365 days/year x 24 h/day x $0.25/kWh = $109.5 Million/year. All that for only a $10,000 licence. • So it’s not a surprise that IPP lobbyists are willing to pay big dollars to the party in power in this “gold rush”, to be given sites of known proven value, along with a short contract to take to the bank, for a self-financing loan to cover all their construction costs, and then to privately profit from rising energy costs forever. • But from the point of view of the people and businesses of BC: . . . . .

23. But from the view of the people and businesses of BC: • This giveaway of publicly owned powersites means that both the power and the profit from it are forever removed from the control of the people of British Columbia, while we face inevitably escalating prices. (Again, without a bidding process, without proper payment, with no future public utility process to control rates - nothing like we are normally used to.) • This is a difficult point for many people, who think that just because the physical powersite is in BC, that the power somehow belongs to us, whereas the critical issue is ownership of the sites. We would actually have much more control of a BC publicly owned powersite in Alberta or Washington State, and access to its power, than we have with a privately owned powersite in BC. • Control of the situation becomes even more difficult as more sites leave us and more time passes, as sites are quickly flipped from the original “BC” shell companies to out of province and out of country companies. • In our Sea-to-Sky Corridor alone, various powersites close by are now owned by EPCor (Edmonton Power), City of Calgary, and Innergex Investment Fund of Quebec. Others are owned by consortiums of retired BC Hydro executives, which tends to ease their sense of ethical discomfort over public loss of these valuable sites.

24. What else is happening? • BC Hydro was once immune from NAFTA challenges as a “totally vertically integrated public utility”. • Now, with government devolution of BC Hydro administration to Accenture in the Bahamas, and its transmission to the US RTO (Regional Transmission Organization) in Washington State, we can be challenged by American businesses and states to sell them our power at our own domestic rates. (Gutting a Powerhouse, Dr. Marjorie Griffin Cohen, SFU) This will effectively end public power as we know it in BC. • This will also end the provincially profitable sale of our public export power by Powerex - the export arm of BC Hydro, which has made us billions of dollars in provincial revenue in the past.

25. Deep Integration, US Control • Closing with a brief reminder here on our looming loss of control in every area - electricity, gas, oil, oilsands and water, in BC and in Canada. • Note “integration” usually actually means simply losing control to a stronger foreign government and/or commercial forces. • The loss of control of our electricity is not unique - it’s simply the greatest shame (along with water), because, since no expensive exploration is involved, there is no need to hand over control to the private sector and/or foreign governments. We could/should be keeping what we already own.

26. Websites & Email Addresses • www.hydrofactsbc.caVolunteer based.See the interactive Google Earth Map being made by volunteers, displaying all the BC rivers being taken from the public. • www.publicpowerbc.ca Website of CUPE /COPE378. Participate in its new “Get back the Power” campaign. • www.AshluRiver.info Volunteer based. Quicktime movie. • www.SaveOurRivers.cawww.OurRivers.ca • Our Rivers and our Public Energy System can be saved when you act to save our rivers. Note .ca as the .com version has been taken by IPP lobbyists. • www.citizensforpublicpower.ca • www.members.shaw.ca/dcol/publicpowerpres.pps for a current copy of this presentation, or find link at HSRTA (Howe Sound Retired Teachers Association) website. • SupportPublicPower@telus.net • contact@ourrivers.ca

27. Research Papers Dr. Marjorie Griffin-Cohen's classic "Gutting a Powerhouse" is available at: http://www.policyalternatives.ca/index.cfm?act=news&do=Article&call=157&pA=bb736455&type=5 or directly at: http://www.policyalternatives.ca/documents/BC_Office_Pubs/gutting_power.pdf or:http://hydrofactsbc.ca/pdf/gutting_a_powerhouse.pdf You can pick up a copy of Dr. Marvin Shaffer's research paper "Lost in Transmission - a Critique of the BC Energy Plan" at http://www.publicpowerbc.ca/energy-plan-update or directly at: http://www.publicpowerbc.ca/sites/default/files/Lost%20in%20Transmission%20A%20Critique%20of%20the%20BC%20Energy%20Plan%20Marvin%20Shaffer%20October%202007.pdf Or simply Google the full titles

28. Books on BC Public Power • for the deepest look at the subject, Dr. John Calvert's book: "Liquid Gold: Privatization, Power and Water in British Columbia", paperback on sale now, ISBN 9781552662441 - example sale below, or Google the full title for extensive links to the book: • http://www.amazon.ca/Liquid-Gold-Privatization-British-Columbia/dp/1552662446

29. Recent News, Nov 2007 • Recent Vancouver Sun articles by reporter Scott Simpson reveal a BC Hydro plan to increase Hydro rates by 7.5% compounding over 10 years to double residential rates, due to new wholesale rates being paid for private power, roughly 16 times higher than our public heritage power. In itself, higher prices for power are not a problem, but after all this, we will not own the powersites, and will be held increasingly for ransom for that power in the future. • At the same time, BC Hydro announced plans to preferentially increase residential rates (currently just over 6 cents/kwh) while at the same time reducing the rates for large industrial users (currently less than 4 cents/kwh), thereby discouraging those industrial users from acting in a more “PowerSmart” manner to conserve power. What bizarre form of accounting could lead our government and BC Hydro to do this? • Vancouver Sun articles reveal that, contrary to earlier understanding, new BC Hydro electricity contracts with Alcan do not obligate the company to a smelter upgrade for Kitimat. The contract awards Alcan around 6 cents/kwh for the power in the near term, about twelve times its 1/2 cent/kwh cost of production, when BC Hydro could probably have bargained for a price of 1 cent/kwh, still leaving Alcan with a much greater profit for its power than it would have made through aluminum production. However, government and BC Hydro seem happy to give away any bargaining strengths they possess when dealing with private electricity producers.

30. Other issues if time; references: • BC Heritage Power Act (November 2003), and its Trojan Horse allowing the sale of BC Gas/Terasen to Kinder Morgan. • Bill 30 (April 2006) which forbids regional examination and approval of powersite applications and rubberstamps all IPPs. • Accenture - run by former executives of Andersen Accounting and Enron, chosen by our government to do BC Hydro administration because of its abilities to do things in a particularly “seamless” and secretive manner. • FERC - US Federal Energy Regulatory Commission - “integrating” our BC power into the US economy. • Recent (summer 2007) BC Hydro contract with Alcan gives them a 1000% windfall profit on “excess power”. It has now been revealed (November 2007) that the company is NOT obligated to continue producing aluminum in Kitimat under that contract as previously stated. • Windpower giveaway now also proceeding at a rapid rate as well. • “Firmness” of power - dammed storage, fuel burning generation, run-of-the-river, windpower. Issues of mature technologies. • Orderly, efficient additions to our transmission system are derailed by IPP “Gold Rush”; related unnecessary damage to environment.