Can British Columbians trust the BC Utilities Commission? Two editorials warn that the BCUC’s credibility may be put at risk by the Call for Tenders shenanigans of BC Hydro.
Editorial boards at the Vancouver Sun and the Nanaimo News Bulletin have both observed that the winning project in BC Hydro’s Call for Tenders process by Pristine Power is the same Duke Point project that BC Hydro had turned down by the Utilities Commission in 2003. The Pristine Power proposal is reportedly coming in for tens of millions of dollars less than the BC Hydro proposal, though no reliable figures are available yet. Both editorial boards have asked how this can be possible, since it’s the same project. Both boards have concluded that it doesn’t appear to make sense, so the BC Utilities Commission better make sure there’s no fishy business going on, and that the public are well served.
We’ve been asking the same question for a year. It was obvious at the outset that BC Hydro had set up the Call for Tenders so that VIGP, its own Duke Point project, had an advantage. And the logic can’t be avoided: same project, same borrowing requirements, same everything. Should be the same price.
One difference though. BC Hydro has absorbed a whack of “sunk costs”. Of the $120 million written down in 2004, $28 million was for Williams for the GSX Pipeline project, and $92 million was for expenses related to VIGP and GSX. In the Call for Tenders, Pristine Power paid $50 million for the VIGP assets, which reduces the write-off amount to $70 million. Pristine also received a bottom-line credit of $50 million in the Call for Tenders, a sum that may have reduced it to the “least cost” bid.
The Vancouver Sun reckons that the $70 million has disappeared and needs to be accounted for. Have the people of BC been misled?
The Nanaimo Daily Bulletin says the integrity and credibility of the BC Utilities Commission is on the line. We agree.