VICTORIA – BC Hydro’s recently released second quarter report shows the crown corporation’s massive debt and deferral accounts are continuing to grow under ongoing Liberal mismanagement, say the New Democrats.
The quarterly report that covers the period up to the end of September shows net income is down and deferral accounts have nearly doubled in the last year to $4.1 billion, partially because of an accounting change, but also because the Liberal government has failed to provide a plan to tackle the growing debt.
“In the six-month period leading up to the end of the second quarter alone, the deferral accounts shot up by another $78 million,” said New Democrat energy critic John Horgan. “The status quo Liberal plan is to ignore it, and leave future ratepayers on the hook.”
Horgan said there will be a day of reckoning when families across British Columbia will have to pay for the billions and billions of accumulated debt under the Liberals.
The Liberals were supposed to finalize a long-term plan for BC Hydro this December, and show the public how they plan to tackle the major issues facing the utility corporation,” said Horgan. “But the Liberal government has pushed back the development and release of the Integrated Resource Plan until after the next provincial election, allowing BC Hydro to continue operating without a comprehensive plan in place.”
Horgan said “the Liberals have no idea how to handle the growing deferred debt. They have no idea how they’re going to power liquefied natural gas plants. And they have no idea how they’re going to keep hydro rates affordable.”
New Democrat finance critic Bruce Ralston noted Moody’s Investors Service’s credit downgrade on Wednesday for BC Hydro is further cause for alarm. He said the agency sees the government as an extension of the crown corporation, essentially because government guarantees the debt.
“BC Hydro’s massive, growing debt, and the lack of any clear plan by the Liberal government to tackle it is very concerning,” said Ralston. “It isn’t surprising that investors aren’t feeling reassured by the Liberal government plan to simply push today’s debt off to the future.”
In April, just before BC Hydro’s deferral accounts shot up another $78 million, British Columbia’s auditor general said his office remains concerned that the Liberal government is “willing to override due process in the setting of Canadian accounting standards, legislating an accounting result that has a significant impact on the financial statements of BC Hydro and the Province’s Summary Financial Statements.” Auditor General John Doyle continued, “BC Hydro’s use of rate-regulated accounting has resulted in a net total of $2.5 billion in expenses being deferred as of March 31, 2012 – a sum that by government’s own estimate is expected to grow to $5 billion by 2017.”
Horgan also noted that the drop in net income isn’t surprising given the expensive private power contracts the Liberal government has locked us into. He said “We’re forced to buy expensive power year round, even though we don’t always need it. During those periods, we’re forced to sell at rock bottom prices for export. It makes no sense.”
Adrian Dix and B.C.’s New Democrats are committed to restoring the regulatory role of the B.C. Utilities Commission and reviewing existing independent power contracts to determine whether they are in the public interest.