Businesses and residents concerned about BC Hydro’s rising debt and energy rates will be hoping that recent leadership changes signal a new game plan for the Crown energy corporation and its Site C dam project.
Hydro’s board of directors terminated CEO Jessica McDonald’s contract in what the Crown corporation described as a move to consolidate Hydro leadership. But far more will be needed at the province’s power utility to effect wholesale operational change. And change is needed.
Hydro’s debt is headed for $23 billion by 2019-20 as it faces massive infrastructure upgrade costs and the bur
den of financing Site C. Demand for the dam’s expensive power remains a question mark as industrial and domestic sales continue to stagnate. As Business in Vancouver reported earlier this year (“Site C gets failing grade from academics – issue 1434; April 25-May 1), an economic analysis spearheaded by a University of British Columbia (UBC) professor concluded that Site C risks becoming a stranded asset that will generate losses of between $800 million and $2 billion atop the project’s projected $8.8 billion capital costs.
The massive energy project will also eliminate any incentive for B.C. to become an innovator in a renewable energy sector that the International Energy Agency estimates attracted US$297 billion in investment in 2016.
The UBC group’s analysis filled some of the information void created when Gordon Campbell’s BC Liberal government allowed Site C to avoid the BC Utilities Commission (BCUC) scrutiny traditionally required of major energy infrastructure projects.
The BCUC review the new minority NDP government has promised might still find the project worthy. But without its objective analysis, ratepayers have only Hydro’s word that Site C is in B.C.’s best interests. That is and has never been good enough.
The allocation of Hydro infrastructure billions needs informed re-evaluation. It remains to be seen whether new leadership at the Crown corporation and in Victoria will provide it.
