An interesting announcement by the BC government this morning, which fits into my blog post from yesterday.
The BC government is considering an increase - not decrease - to its premium rates paid to IPPs. As it stands, those rates (~$100 per MWh) are already considerably higher than the spot market average price (~$50 per MWh). So Campbell is about to make a bad deal for the BC ratepayer even worse.
Why would he do that? Because BC is finding it increasingly difficult to attract good investors to its private power adventure, in a context of continued recession in the US (call it a "jobless recovery" if you like), the emergence of new renewable energy players such as California's solar industry, a growing energy overproduction crisis on the continent, and therefore a situation of increased competition among governments - in this case, BC is trying to outbid Ontario's own generous offerings to the private power industry.
In other terms, Campbell is now fishing at the bottom of the barrel, trying to attract second rate investors now that the bigger ones appear to be walking away, or to get the big ones back with much higher payoffs.
This is extremely problematic, especially when it is coupled with the Site C project being carried out in parallel. The BC taxpayer is being hit by a double whammy: on the one hand, s/he is asked with Site C to produce at his/her own cost a surplus of energy that s/he does not need, and which will be sold at basement bargain rates to the mining industry and other regional polluters (there is rumor of sending Site C's energy to the Tar Sands); on the other hand, s/he will be required to purchase energy that s/he does not need at outrageous rates ($150 per MWh?) from private producers in 40-year contracts, which will also be sold at dirt cheap rates to private mines.
This is theft. How do we intend to protect our property?
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