BC Citizens for Public Power says Liberal Government Misleading Public on BC Hydro; Energy Minister Neufeld Denies Info in Own Report

Friday, July 12, 2002
For Immediate release

Energy Minister Richard Neufeld is misleading the public about BC Liberal government plans to privatize BC Hydro, says a spokesperson for BC Citizens for Public Power. "Minister Neufeld is playing fast and loose with the facts on something that is incredibly important to British Columbians -- BC Hydro," said Mark Veerkamp of the citizens' group.

In a Victoria Times Colonist story Wednesday, Neufeld claimed that the government is not considering privatizing BC Hydro's "core assets" or raising prices for electricity. Wrong.

• The government's own Energy Policy Task Force's interim report recommends: the break-up of BC Hydro into separate generation, distribution, and transmission companies; privatization of the transmission system; privatization of future generation; and a rate increase of 30-100% for BC consumers to allow for the "right climate" for private energy companies to set up in BC.
• This Task Force is chaired by Jack Ebbels, Neufeld's Deputy Minister, and includes Brenda Eaton, one Premier Gordon Campbell's Deputy Ministers, and several consultants who advised in the privatization, break-up and deregulation of public utilities in New Zealand and Alberta.
• Core assets are more than just "wires and dams." The government is about to sign a deal with Accenture, an international consulting company based in Bermuda, to privatize one-third of the jobs at BC Hydro -- more than 2000 employees. Accenture would take control of the brains of BC Hydro information systems [Westech], financial services, customer services, human resources, electricity supplies, and internal computer systems.

  Neufeld also said that we must break up BC Hydro and privatize future electricity generation because "we are consuming everything we produce" and are dangerously short on power. Wrong.

• When releasing its 10 year Updated Integrated Electricity Plan in the year 2000, BC Hydro then-CEO Michael Costello said that "this IEP demonstrated unequivocally - BC Hydro has ample electricity now and into the future."
• BC Hydro stores energy behind its dams and imports when the prices are low to sell the stored energy when the prices are high. This year, BC Hydro is spilling water over the Peace and Columbia River dams because we have so much extra power.
• If we are "consuming everything we produce" why is BC Hydro considered one of North America's largest energy exporters? How did it make hundreds of millions exporting power to California?
• A recent report by the Sierra Legal Defence Fund entitled "Power Grab" concludes that conservation and public investment can most cost effectively meet our future needs.

  Minister Neufeld also claims that BC Hydro is in poor financial position and can't afford to make future investment. Wrong.

• Because of large capital investments such as dams, it is common place for companies like BC Hydro to carry debt. However, due to superior financial performance, BC Hydro enjoys a credit rating of AA- according to Standard and Poor's, one of the world's leading financial rating houses. BC Hydro earns a return on equity of 16.59%.
• BC Hydro's ability to borrow is mandated by the government. According to the BC Hydro 2001 Annual Report, BC Hydro has reduced it's long term debt by over $1 billion leaving enough room to borrow almost $2 billion on very short notice. Conversely, private energy companies such as Calpine, TransAlta, and Uliticorp's parent company Aquila have seen their credit ratings downgraded, in some case to junk bond status.

  "Energy Minister Neufeld calls any concern over his stated position on BC Hydro fearmongering -- that's shameful," said Veerkamp. "Their own handpicked task force has called for the break-up and privatization of the company and now they are denying they had anything to do with it."

  The Joint Industry Electricity Steering Committee, representing BC's largest industrial energy users, has also been lobbying the provincial government to stop plans to break-up and privatize BC Hydro and move to market pricing. The JIESC presented a poll to the Energy Minister and the Premier with the goal of pusuading them to support public power in BC.

  "British Columbians have a high level of anxiety over the future of BC Hydro for good reason, " said Veerkamp. "Minister Neufeld has been keeping the final report hidden from the public since May and is making plans over the summer to break-up and privatize BC Hydro without public consultation. It's outrageous."

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  For more information, contact Mark Veerkamp, Coordinator for the BC Citizens for Public Power at 604.790.3352

  BC Citizens for Public Power is a non-profit, grassroots organization established to give voice to British Columbians' demand that BC's power system remain in public hands.

  www.citizensforpublicpower.ca --

  Mark Veerkamp
  Coordinator, BC Citizens for Public Power
  email:coordinator@citizensforpublicpower.ca
  Phone: 604.790.3352
  www.citizensforpublicpower.ca

  Citizens for Public Power Society
  #53 1895 Commerical Drive
  Vancouver, BC V5N 4A6