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An easy myth to bust

July 14, 2010

Despite our group’s best efforts, there are still people out there claiming that BC Hydro can produce electricity cheaper than independent green energy producers.

The claim is completely dishonest because it’s based on a cost comparison between electricity production at BC Hydro’s aging mega dams (which were built and paid for decades ago) and the cost of electricity production from newly built generating facilities, which is what most green energy projects happen to be.

Fortunately for the truth this is one of the easiest myths to bust from among the constellation of myths dreamed up by green energy opponents and the COPE 378 myth machine.

Comparing the cost of electricity production at aging mega dams to the cost of production at newly built generating facilities (regardless of whether BC Hydro or independent producers build these new facilities) is like comparing the cost of operating a brand new car to that of a car you’ve already paid for.  The two don’t compare. 

And the only reason that production costs are low at some of BC Hydro’s aging mega dams owes to the fact that maintenance and improvements to these facilities was postponed during the 1990s to help the NDP government balance their budgets (in much the same way that Burrard Thermal was fired up to raise some badly needed cash from export revenues). 

BC Hydro is spending billions of dollars now to bring their aging mega dams back up to scratch, and the capital costs of these upgrades will be reflected in their cost of production.  This is already the case at the Aberfeldie dam where the cost of production is now comparable to that of a typical green energy project.

And when you look at the probable cost of electricity production from the proposed Site C dam, the production cost at Site C is potentially even higher than it is for most independent green energy projects.   

The bottom line is that you have to compare apples to apples if you want an honest cost comparison between electricity production costs; which is not to say that an honest comparison is what the opponents of independent green energy projects are actually looking for. 

The letter below, from the Nanaimo News Bulletin, is from our co-spokesperson David Field and it responds to a typical letter claiming (in accordance with the myth) that independently produced electricity is more expensive than electricity generated by BC Hydro.

Nanaimo News Bulletin – Letters

Green energy better than new dams

Published: July 09, 2010 11:00 AM
Updated: July 09, 2010 11:31 AM

To the Editor,

Re: Schemes erroneously called ‘privatization’, Guest Comment, July 6.

Methinks letter writer Kip Wood has been reading too much Karl Marx if he thinks “the fundamental purpose of taxation” is “the redistribution of wealth from rich to poor.”

The purpose of taxation is to provide governments with the financial resources needed to pay for services such as education and health care and for infrastructure such as roads, bridges and rapid transit.

However, I do agree that “the entrepreneurial spirit is a key ingredient of our economy and our society.”

I would even go so far as to suggest that if the private sector can provide a good or service at less cost to taxpayers then the private sector should be the one providing that good or service.

The example of independent green energy producers cited by Wood is a prime example of a good or service that can be more cost-effectively supplied by the private sector.

Contrary to Wood’s incorrect assertion, independent green energy producers are actually generating the new electricity B.C. needs at less cost than B.C. Hydro can itself.

Wood’s claim that “inflated prices” are being paid by B.C. Hydro is based on a misleading comparison between the cost of electricity produced by B.C. Hydro’s aging hydroelectric mega dams – which were paid for decades ago – and the cost of electricity from newly built generating facilities like B.C. Hydro’s proposed Site C dam or refurbished facilities like the Aberfeldie and Mica dams.

I am confident that in any honest comparison between newly built independent green energy projects and newly built or newly refurbished B.C. Hydro mega dams, Wood will discover very quickly that independent green energy producers are able to supply new electricity at a lower cost than B.C. Hydro can produce it and with minimal environmental impact.

David Field

B.C. Citizens for Green Energy

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