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Axe private energy contract, not jobs, say BC Hydro workers

Cut privatization, not jobs, a union leader representing workers at BC Hydro said after BC Hydro announced it was laying off 1,000 people in a bid to reduce proposed rate hikes and cut $800 million in expenditures.

Gwenne Farrell, vice president of Utilities at COPE 378, said that the labour costs at BC Hydro are “only a small fraction” of the company's total expenditures, and arguing that government policy to purchase power from private companies are really to blame for the rate hikes.

“Direct labour costs are about 11 per cent of BC Hydro's total expenses,” said Farrell. “The government is targeting the wrong area. The area that is driving these rate increases is the fact that (the government) has mandated that BC Hydro must purchase their new power from independent power producers (IPPs). They've committed to $25 billion in contracts to private power producers.”

Farrell explained that private power producers have been selling power to BC Hydro for up to $124 per megawatt hour, which she said is “significantly more” than what BC Hydro rates are. While figures fluctuate, recent rates in BC Hydro's annual reports have cited the price at around $68 per megawatt hour. Farrell believes the government has gone into the contract for “ideological reasons” and said that it would be difficult to alter the contracts, adding that some of the agreements were for “25-40 years.”

However, some critics of BC Hydro have said that blaming privatization was basically a smoke screen for deeper structural problems that are causing the power rates to go up.

“It's nonsense,” said a source from the B.C. Citizens for Green Energy who wished to be unnamed. He said that BC Hydro is required to buy from independent power producers because the current dams, which haven't been updated since the 1980s, don't produce enough electricity to meet the province's current electricity demands.

He argued that in addition to the so-called “smart meters” rates are going up to offset the cost for rebuilding older dams – $3.4 billion in the next two years alone, according to the BC Hydro website.


He said that because BC Hydro “doesn't see money as an object,” it tends to spend far more money on rebuilding than it needs to, and that this, more than the purchase of electricity from IPPs, will be a driving factor of electricity rate hikes.

“When BC Hydro builds something, they build it like a Rolls Royce,” he said. “But when a private company does it, they do it from a cost-benefit ratio perspective, like a good Chevrolet.”

He argued that laying off BC Hydro employees and contracting work to private companies would help reduce the costs of renewing the company's infrastructure and reduce the overlap of work which was criticized in the Energy Ministry's review of BC Hydro.

Ferrell, however, disagreed with the claim that BC Hydro workers were less effective than private contractors.

“I don't know that a contractor could do the work any more effectively,” she said, noting that as a senior financial analyst for BC Hydro, that she doesn't consider her job “cushy” in any way.

She criticized the government's handling of the situation, saying that cutting up to 1,000 jobs in the province would contradict Premier Christy Clark's Family First program. 

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