Saturday, August 13, 2005

Leverage? What leverage?


(Originally left as a comment here, explaining why trying to play trade hardball with the U.S. over NAFTA might not be as easy as you think. Thanks to "anonymous", whoever you are.)

BC Hydro cannot [withhold power sales to the U.S.]. Like everything else the province had, it has been sold.

A private Bermuda-based company, Accenture, took over all the major services activities of BC Hydro on April 1, 2003. These involve customer services, financial services, human resources, information technology and procurement services. It was a change that cost BC Hydro $60 million and one-third of its workforce. Because Accenture is a private corporation, the details of the transaction are not public, and at no point was a business case made to the public regarding the need for this change.

The transmission system of BC Hydro (the large system of wires taking electricity from the dams to distribution systems) will be severed from BC Hydro and become a completely separate private legal entity. This is the first step toward the turnover of transmission to a US entity known as Regional Transmission Organization West (RTO West). RTO West will completely control the transmission system, including making decisions about who has access to the transmission lines, what prices will be paid for this access, and what future investments will be made to the system. British Columbia will continue to own the wires, but its function will be restricted to collecting rents from those who use the wires. The main point of severing the transmission system from BC Hydro is to encourage private electricity production for export.

BC Hydro will no longer plan the future electricity supply needs of the province. Rather, new electrical generation facilities will be the preserve of the private sector, with BC Hydro confined to upgrading existing facilities. This means that BC Hydro will not be able to initiate new investments in new gas, hydro, wind, or solar facilities.

The government’s promise to keep BC Hydro in the public sector is being kept only in the most literal sense. What remains of BC Hydro will be in the public sector, but the corporation itself will be near lifeless. The business of electricity in BC is being rapidly privatized, with a shift in focus away from meeting the needs of the people of this province and toward meeting the needs of private power producers.

These changes are radical, and under international trade agreements they will be binding. Yet they are occurring without public debate and without a clear mandate from the public. Because they are so serious and irreversible, they deserve much more public scrutiny.

West Kootenay Power, another large utility serving the lower potion on British Columbia was sold to UtilCorp which is an American owned company. (Aquila - based out of Kansas City) BC has nothing left for leverage anymore.

(And if you want to know more about Accenture, a good place to start is a Google search on "accenture offshore tax haven". Oh, yeah, they're a piece of work. - CC)

3 comments:

mergenow said...

Okay, as puzzled as I am by the conservative rush towards Privatization, your post puzzles me even more. You say:
BC Hydro will no longer plan the future electricity supply needs of the province. Rather, new electrical generation facilities will be the preserve of the private sector, with BC Hydro confined to upgrading existing facilities. This means that BC Hydro will not be able to initiate new investments in new gas, hydro, wind, or solar facilities.

I'm forced to wonder: "What kind of sweetheart deal was this?" Who enters into a deal like that without the explicit intent of crippling BC Hydro?

You didn't source the info on which the post is based. Can you point an interested party towards some resources? (BC Hydro's website doesn't lend itself to that kind of research.)

mh said...

Citizens of BC think of BC Hydro as hydro-electric facilities, transmission equipment, maintenance crews, and engineering staff. For the union representing HR and IT staff to describe outsourcing their members as "selling BC Hydro" is highly misleading.

Theo Nelson said...

I don't know squat about leverage - I would assume America can screw with us forever and a day. There is however, a time honoured route for an aggrieved nation to take when another nation gets out of line and I'm not talking about war. :)
If our government had a spine they would just have to do this:
Send the American Ambassador packing back to Washington.
Recall Our Ambassador to Ottawa.
Drape up a big sign on the front of our Embassy in Washington with words to the effect that America does not honour its written contracts with it's best trading partner and neighbour. Tell them we'll come back when they play fair. :)
Embarrass the crap out of them. The freaks in power down there can't tolerate the harsh light of scrutiny or the eroding of public opinion within their country. The International community can have a big laugh at America's expense. Theses are things that are pure poison to Bush's America.