Industry group opposes breaking up B.C. Hydro, leaked document says

February 20, 2002

Industry group opposes breaking up B.C. Hydro, leaked document says

VANCOUVER (CP)

British Columbia's biggest power consumers have slammed recommendations from the Liberal task force on energy policy that would dismember B.C. Hydro and hike their electricity rates.

In a response to last December's task force recommendations, 30 major companies grouped as joint industry electricity steering committee say the proposals on electric power are a recipe for economic disaster.

The group represents mines, pulp and paper firms and electrochemical industries in 42 B.C. communities employing more than 15,000 workers. It predicts thousands of layoffs if the interim recommendations are adopted.

The task force's report called for the sale of all Hydro assets except its generating business, large-scale deregulation, and an increase in B.C. power prices of between 30 and 60 per cent.

The industry committee said the contemplated changes would hugely increase power costs for industry and homeowners alike without providing any benefits.

"The sale of 1/8 the 3/8 B.C. Hydro monopoly assets is the wrong way to balance the budget," said the committee's response, which was filed with the government last week and obtained by the Vancouver Sun.

"In our review of drivers for change we are unable to identify any crisis that requires immediate action."

The industry paper says Hydro provides stable power at regulated, predicable rates while returning substantial benefits to the province.

"These are core infrastructure assets that do not require provincial subsidies and in fact provide ongoing returns to the province and an important competitive advantage for industry," the committee wrote.

The Liberal task force's interim report envisioned a complete deregulation of the B.C. energy sector with market prices the order of the day, meaning almost immediate 30 per cent hikes for homeowners and some 60 per cent hikes for industrial users.

Increases of that magnitude would cause many of the province's big mines and industries to cut jobs and their consumption of electricity since power costs represent such a large part of their bottom line.

The task force was to have filed its final report at the end of January. But the sweeping changes contemplated by the interim report provoked such concern that Energy Minister Richard Neufeld extended the deadline to March 15 to give people a chance to respond.