BRITISH COLUMBIA

Echoes of Golumbia
River sellout in

Site € export plan

By SEAN GRIFFIN
Premier Bill Bennett’s much-vaunted “breakthrough” on hydroelectric power
exports to the U.S. could prove to be the most disastrous development for British
Columbia since the Columbia River sellout engineered by the.elder Bennett more

than two decades ago.

But despite the warnings, Bennett is
almost certain to make power exports a
major plank in a Socred election campaign,
with promises of jobs in construction and
new resource revenues — promises that
will be as empty as were the promises of
“cheap power for B.C.” made by W.A.C.
Bennett on the Columbia.

‘ No formal deal has yet been worked out
with U.S. customers but a proposal was
outlined to B.C. Hydro two weeks ago by
the chairman of the Bonneville Power
Administration. (BPA), the U.S. federal:
Power authority which distributes power
generated on its dams on the Columbia.

Under the deal, B.C. Hydro would have
greater access to the high capacity transmis-
sion lines — access currently restricted by the
BPA — inexchange
for altering the flows
On the Columbia so
as_to benefit the
US. The BPA would
also work with B.C.
Hydro in selling B.C.
Power to US. utili-
ties.

Concurrent with
the announcement
of that proposal,
. Bennett declared BENNETT
that B.C. would proceed immediately with
construction of the controversial Site C dam
On the Peace River — to produce power for
export.

- The implications of both announcements
— made at a time when B.C. Hydro has
€Xcess capacity due to over-building and is
Staggering under a huge debt are enormous.

In the first place, the proposal to con-
Struct Site C to produce power for export
marks a fundamental break with stated
sovernment policy.

_ Cross-examined before the Site C hear-
ings conducted by the National Energy
Board (NEB) three years ago, then Minister
of Energy Robert McClelland testified that
80vernment policy precluded constructing
dams _ for export. Two years later in
October, 1984, when Bennett was searching
for further markets for B.C. power, he, too,
_ Tuled out” the notion of building dams for

export.

’ Now, apparently, that policy is to be rev-
ersed. And the consequence would be a
Major continentalist thrust towards inte-
stating British Columbia’s power generat-

BILL

Ing facilities with U.S. utilities on a perman- _

€nt basis. ‘

Actually there has been an increasing
tempo of applications by B.C. Hydro to the
NEB to export more and more power to the

S. Particularly since 1980 when the

Town corporation first sought to sell
Power to U.S. utilities on a “firm,” rather
than an “interruptible” basis.

But this is the first time that the govern-
ment has actively promoted the idea of
anadian facilities producing power for the
*S. No doubt Bennett, faced with an elec-

ton at a time of collapse in construction and

€clining resource revenues, sees an Oppor- ~

tunity to announce another megaproject

Which could be justified on the basis of a

Teady market for power in the U.S.

eut according to analysts, the construc-

= N of Site C would make absolutely no
cOnomic sense. It would be a financial, as

Well as a national sellout.

feo utently, power exports to the U.S.
Tom B.C. Hydro net between 14 and 20

mills — $14 to $20 (U.S.) per megawatt-
hour.

Yet even in 1981, when Site C was first up
for approval, engineering studies pegged
power generating costs at $16.90 per
megawatt-hour. Add to that four years of
inflation and the cost rises to at least $22 per
megawatt-hour — well above the export
sale price. ;

NDP energy critic Bob Williams has put
the cost of power generated by Site C even
higher, at 35 mills, indicating that B.C.
could take a huge loss on any Site C-
generated power exported to the U.S. Even
power at Revelstoke costs 30 mills to pro-
duce, he said.

The present estimates on total cost for
construction of the dam are set at $3.2 bil-
lion which would add more than another
third to the already existing B.C. Hydro
debt of $8.4 billion. The Crown corporation
faced debt servicing charges of $224 million
for the first quarter of 1985 alone.

Selling power at less than the cost of
production — even if the export volumes
were increased many times over — would
only add to that debt since the- revenue
generated wouldn’t even pay the costs of
borrowing the money that would be needed
to construct the project.

Significantly, at the same time as B.C.
Hydro and the provincial government are
pondering more cheap power for the U.S.,
the Crown corporation is preparing to
make its case at Public Utilities Commission
hearings next month for a 10 per cent inte-
rim rate increase for residential users.
Homeowners and tenants now pay 6.42
cents per kilowatt hour for the first 550
kwh — roughly three times the price being
charged corporate bulk users and export
customers.

And the environmental cost to the people
of this province would be just as
staggering — 9,447 hectares (23,000 acres)
of land flooded in the Peace River Valley,
some 3,300 hectares of it good farm land.

There is also an additional factor that is
of considerable importance to utilities in the
U.S. Virtually all of them are privately-
owned corporations which, because of fal-
ling revenues and problems associated with
nuclear power generation, have had diffi-
culty attracting investment.

By saddling B.C. Hydro — and indi-
rectly the people of B.C. — with the mas-
sive costs involved in developing new power
generating facilities, those same utilities are

Premier Bennett's proposed con-
struction of the Site C dam on the
Peace River for export sales would
be a financial as well as a national
sellout. The cost of producing the
power would be anywhere from 22
to 35 mills — well above the price it
would sell to utilities in the U.S.

able to get the benefits of increased
capacity — with none of the costs.

In fact, U.S. utilities and the Bonneville
Power Administration have been particu-
larly adept at manipulating one another and
B.C. Hydro.

The so-called “breakthrough” agreement
proposed by BPA is an example of how the
U.S. power authority has played up to the
Socred government’s continentalist policies
and how anxious the Socreds are to sell out

Canadian power resources as part of their
economic — and election — strategy.

The BPA, which has often blocked B.C.
Hydro’s access to the transmission line. to
California — located at The Dalles dam on
the Oregon side of the Columbia — is now
prepared to give greater access to the line.
But in return, B.C. Hydro is to alter the
flows on the Columbia River, decreasing
the output from the dams on the Canadian
side while providing increased benefits to
the U.S.

But the Canadian dams built under the
terms of the Columbia River Treaty have
already added 9.2 million k Wh in increased
capacity to the U.S. dams. Canada was
entitled to half of that power under the
treaty terms but sold it to the U.S. for 30
years as “downstream benefits.”

The demand has been raised in this pro-
vince that the government should terminate
the power. sales agreements as they
expire — the first of three comes up in
1998 — and have Canada’s share of the
Columbia River power returned to this
country’s electrical system.

The return of that power, fed into B.C.’s
power grid, would obviate the need to con-
struct any new projects in this province and
would provide the province’s needs for the
foreseeable future. Alternatively, if the
power were surplus when the first agree-
ment expired in 1998, it could be sold, on
the basis of short-term agreements, to U.S.
customers.

Instead, the Socreds are preparing to add
further to U.S. downstream benefits as the
price of integrating this province with the
U.S. power grid. British Columbia loses on
both counts.

In the short term, the consequences of the
BPA-Bennett power proposals are bad
enough: the flooding of thousands of hec-
tares of land, a massive increase in the debt
with no prospect of meeting it through
export revenues — and the inevitable con-
sequence of higher residential rates — and
further concessions on the Columbia.

Far worse is the long term consequence
of further integration of Canadian hydroe-
lectric facilities with the U.S. electrical grid
which would make B.C. a long term source
of cheap power for American industries,
many of which compete with our own.

(Not surprisingly, a recent U.S. report
published by the Northeast-Midland Coali-
tion, a congressional lobby, urged further
development of power sales to the U.S. to
make U.S. industries “more competitive.”)

Because of its abundance of hydroelectric
energy, this province is in an ideal position
to develop energy-dependent secondary
industry including steel fabricating, wood
products manufacturing and aluminum
product manufacturing. But significantly,

The so-called ‘breakthrough’ agree-
ment with BPA is an example of how
the U.S. power authority has played
up to the Socred government's con-
tinentalist policies and how anxious
the Socreds are to sell out Canadian
resources as part of their economic
— and election — strategy.

the Socred government has explicitly
rejected that course, opting instead to make
a quick buck from resource sales and, with
the latest proposal, to turn B.C. into a
source of cheap energy for the U.S.

Similarly, the demand has been raised
repeatedly, notably by the Communist
Party, for the development of an east-west
power grid to assist in the development of
diversified Canadian industry. But that,
too, has been dismissed by successive
Socred governments bent on a continental-
ist course.

Still, the construction of Site C for export
is likely to face a battle before the National
Energy Board which has already shelved
the project once when B.C. Hydro could
not demonstrate that the project was
needed to meet B.C.’s energy needs.

Certainly citizens’ groups and the labor
movement will have to ensure that the NEB
holds hearings and that the government is
called to account on its energy policies, par-
ticularly the abrupt shift in advocating
dams for export.

More than anything, British Columbians
will have to make sure that their govern-
ment doesn’t sell them down the river again
for the price of a few hundred jobs on adam
project and a plank in a Socred election
platform.

PACIFIC TRIBUNE, OCTOBER 2, 1985 e 3

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