Public Submission to BC Green Energy Advisory Task Force Groups 1 - 4- PART 1

B. C. TAP WATER ALLIANCE
December 31, 2009

INTRODUCTION

We’ve decided to make a general, single submission to all the four groups and members with the BC provincial government’s Green Energy Advisory Task Force. We don’t pretend to understand what all the complex issues are, but recent reading of Task Force member Backgrounder reports (some 200 pages) released on the Save Our Rivers website (www.action.saveourrivers.ca, direct link from the home page of the SOR website) gives us some significant pause for concern. These backgrounders are, therefore, part of our submission, and are attached as an appendix (as email attachments).
Others involved in environmental and social justice advocacy and research are, understandably, refusing to make submissions, for various reasons. These reasons, which are rooted in what may be generally defined as a fundamental lack of public transparency and accountability by the BC Liberal administration, include:

• an extremely short time frame for submissions (and during the winter/Christmas holidays!!), November 30 - December 31st, some five weeks, and a quick turnover for Cabinet decision making;
• no available or carefully prepared background reports and reference material for each Task Force group theme, and time to consider the information;
• no information on who or how task force members were nominated or assigned to each Task Force group, and a lack of public sector representation on each of the four groups;
• no public scrutiny of task force proceedings and meetings (confidentiality agreements?);
• perceptions of bias and an assumption that outcomes have already been designed and may be prepared and written under such bias.
Due to a number of restraints, mentioned above, we will not comment on the mandates issued to the four Task Force groups by the provincial government. However, public accountability is both critical and necessary, and seems to a common theme as to its sorry absence since, and leading up to, the government’s new Energy Plan in 2002, and its unauthorized and controversial revised instructions to BC Hydro regarding the undertaking of new energy projects. That is why, given the inherent limitations of your Task Force groups, it is nevertheless important that all submissions to the four groups be made public.

A SHORT HISTORY OF HYDRO-RELATED TASK FORCES AND CONCERN ABOUT DEMOCRATIC DEFICIT

Our concerns about public accountability in advisory forums related to the establishment of provincial government policy, provided below, were conducted over the last 22 years, not including the significant and legitimate public forums and review processes in the 1970s about off-shore oil and oil tanker proposals that led to the controversial proposals being set aside.
We note in the attached appendix Backgrounder for Task Force Group #3, the last representative and the story about Atlin’s new off-grid hydro development. What is important, to us, about this story is its embracing theme, in contrast to the operations of this Task Force established by Cabinet (and many other processes mandated by Cabinet since 2001): as reported, the manner in which the Atlin community was canvassed and the apparently careful and lengthy processes for public involvement and mandate that led to the decision to eventually build the micro hydro-electric site for the needs of the community, and the seemingly rigorous environmental processes that were undertaken for its certification.
1. The 1987 Private Sector Task Force on Privatization (No public inclusion)
About three years after the BC Social Credit government extinguished provincial public resource committee planning forums (the Inter Agency Management Committees formed since the 1970s), in early 1987 Transportation Minister Stephen Rogers influenced the initiation (without public acceptance and input) of a new agency for privatization, and set up a Private Sector Task Force under his own responsibility.
In a April 28, 1987 report, authored by David Emerson, BC Hydro and Power Authority: Preliminary Analysis of Business Units for Privatization, the Private Sector Task Force’s advisor recommended BC Hydro and BC Rail be privatized. (Coincidentally, Emerson is now (“ex-officio”) one of this Task Force groups’ peers on the Premier’s overriding Green Energy Task Force Executive Committee.):
Use of this report should be restricted to the Private Sector Task Force on Privatization to assist in achieving their mandate. Information contained herein has not been audited or verified and thus should not be relied upon for information to be placed in an offering for sale or otherwise published.
We should note that, while the sale of B.C. Hydro in its entirety to the public is probably feasible, the complexity and diversity of the conglomerate whole would make this a questionable and controversial endeavour -- not to mention the long timeframe for proper execution of the sale.

Because some parts of Hydro are more amenable to privatization than others, and because different forms of privatization make more sense for different units, the report addresses only the privatization potential of individual parts of the corporation rather than the entire corporation.

The public had no knowledge of Emerson’s report, 1 no representation on the 1987 Task Force. Two years later came the first concessions, a number of private power bids and the formation of the BC Independent Power Producers Association, and the removal of BC Gas from BC Hydro.
2. The 1990s and a Return to Public Resource and Policy Planning Involvement: The 1997 Stakeholders Task Force on Electricity Market Reform and the Kemano II Hearings
In 1991, after deep ongoing public concerns about the fundamental lack of public involvement and accountability by the Social Credit government in land resource planning, the new NDP administration slowly began to implement legislation and forms of resource planning that involved the public, reflecting, in part, the multiple initiatives and objectives that were originally implemented through the powerful 1971 Environment and Land Use Act, and the widespread public planning initiatives that followed and were later controversially removed and ignored by the Social Credit administration (the BC Liberal Party’s predecessor).
2.a. In late March, 1997, the BC government “appointed a stakeholders task force to study and develop electricity market reforms in British Columbia,” 2 chaired by Mark Jaccard. (“The BCUC has been without a Chair since the resignation in April 1997 of Dr. Mark Jaccard to head the BC Task Force on Electricity Market Reform.” 3 ) The provincial government’s Terms of Reference for the Task Force stipulated “consensus” from the stakeholder members, which never came to fruition. The important consideration in this process was a wide mix of task force membership, as stated in the 1997 and 1998 BC PIAC newsletters:
In our first newsletter we talked bout the development of competition in electricity and, in particular, a hearing into the issue of “retail access” scheduled by the BC Utilities Commission, commencing April 1, 1997. Retail access allows end users to have the choice of purchasing power from the existing utility, or elsewhere, and then using the utility’s transmission and distribution systems to deliver it. Aside from potential competitors to BC Hydro and West Kootenay Power, the largest proponents of retail access are large industrial customers who believe they can achieve lower rates as a result. As BC already has the second lowest electricity rates in Canada, after Manitoba, residential customers are generally satisfied with the existing system and are not pushing for change.
The April 1, 1997 hearing did not go ahead as planned. Dick Gathercole of BC PIAC is a member of the task force.
The task force will be releasing an interim report on June 1, 1997, and is aiming to produce a final report by the end of the year. Its mandate is to bring forward measures that will help ensure, among other things, job creation and economic development, greater choice for electricity customers, continued public ownership of BC Hydro, high reliability standards,
1 Emerson, a former government bureaucrat, left government in 1986 for the position of President and Chief Executive Officer of the Western and Pacific Bank of Canada.
2 Public Interest Advocacy Centre newsletter, May 1997, Volume 1.2.
3 Public Interest Advocacy Centre newsletter, January 1998, Volume 2.1.

and continued incorporation of environmental and social considerations, with no adverse impacts on customer classes or regions.
Some concern has been expressed about the need to open up the BC market in order to ensure that BC Hydro and its marketing subsidiary, Powerex, will continue to have access to
American markets for the sale of surplus electricity. The requirements established by the
Federal Energy Regulatory Commission in the United States are actually fairly minimal and easy to achieve without any major restructuring. 4
The Task Force has been meeting on a regular basis since May. It produced an interim report setting out its proposed process and is preparing a second interim report which is due
October 31, 1997. This report will contain basic recommendations for any reforms.
The Task Force is endeavouring to make decisions by consensus. The Chair of the Task
Force developed a proposal for discussion which was rejected by a number of Task Force members, including consumer, environmental, and union groups. These groups prepared a new proposal as a basis for negotiation. At the time of writing, it was not clear how this proposal was going to be received. 5
The government had hoped that the Task Force could reach some consensus on what reforms should be considered in the electricity market. However, the make-up of the task Force and the process it followed doomed it to failure. Some members pressed for a major restructuring of the market and the break-up of BC Hydro. Others, including BC PIAC, unions, and environmentalists, considered that only minor reforms, including a strengthening of BC Hydro, were necessary given that British Columbia has the second lowest rates in Canada and arguably the most reliable service.
Consensus could not be reached, and it was finally agreed in the late Fall of 1997 that the
Chair of the Task Force, Dr. Mark Jaccard, would prepare his own report. He filed an interim report in December 1997, with a final report to be presented after public input in February 1998. All indications are that the final report will be essentially the same as the interim report.
The interim report recommends giving direct access to large industrial customers only – that is, they would be the only customers allowed to buy from suppliers other than BC Hydro. It also recommends as a second step the establishment of a separate entity to run BC Hydro’s and West Kootenay Power’s transmission facilities.
The report is unacceptable to the coalition of BC PIAC, environmentalists and unions, and we will be preparing and presenting a separate proposal to the Minister of Employment and Investment shortly. Besides critiquing Dr. Jaccard’s report, it will present an alternative and more moderate action plan to the government. 6
4 Public Interest Advocacy Centre newsletter, May 1997, Volume 1.2.
5 Public Interest Advocacy Centre newsletter, September 1997, Volume 1.3.
6 Public Interest Advocacy Centre newsletter, January 1998, Volume 2.1.