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Column: $5.8B doesn’t go as far it once did at BC Hydro

I had one task: Find out how successful were the cuts at BC Hydro following former premier Christy Clark’s “hard look” at the Crown corporation in 2011.
Dermod
Dermod Travis

I had one task: Find out how successful were the cuts at BC Hydro following former premier Christy Clark’s “hard look” at the Crown corporation in 2011.

The first step: Find the utility’s 2016/’17 Financial Information Act Return.

And there is was — after scrolling through the 188 pages — $236,698 to Retirement Concepts Seniors Services. Everything went south from there.

It was a bit of a head-scratcher. Must have been for someone else at BC Hydro because there’s a $39,865 payment to Headscratchers LLP.

So, checking Clark’s 2011 hyperbole against actual results went out the window in favour of another question: Exactly how did BC Hydro spend $5.8 billion on goods and services last year?

First, the tax man cometh — better known as how to balance a provincial budget creatively. Say goodbye to $566 million to the B.C. government, local governments ($165 million), payments to First Nations ($24.9 million) and a $39.4 million payment into the corporation’s pension plans.

The two pension plans are one of the lesser known ticking time bombs at the utility. Another actuarial review will take place in 2018, but right now they face a shortfall of $1.6 billion.

The utility’s wholly owned energy trading arm, Powerex, accounted for $803 million.

After that, it didn’t take much for the utility to blow through another $3.3 billion. In fact, it only took 89 suppliers, among them many of the former government’s best pals.

The utility’s financial return is also interesting for who’s in it and who isn’t. Innergex Renewable Energy Inc. owns, or has an interest in, eight independent power facilities in B.C. but the company isn’t listed among the suppliers. The facilities are, though. Add them all up and the total is $75 million after adjusting for the ownership stake Innergex holds in each.

Duz Cho Construction ($20.8 million) did well, possibly all of it through a direct award contract for work on Site C. The construction firm has former transportation minister Blair Lekstrom in its corner, as a lobbyist. His 2013 mandate reads in part: “(to assist) Duz Cho Construction... negotiate opportunities with BC Hydro.”

The developers behind Vancouver’s Trump Tower — West Georgia Development Ltd. — collected $40,061.

The law firm that had former New York City mayor Rudolph Giuliani’s name on the door until last year is down for $4.4 million.

Canada’s finance minister didn’t do too badly. His family firm, Morneau Shepell Ltd., billed $999,758.

If tolls are any indication, the Port Mann bridge ($103,129) proved more popular with Hydro staff than the Golden Ears ($42,055), which proved more popular than WestJet ($27,485). Even Air Canada came in at only $169,645, which is odd since the utility’s employees claimed $36.3 million in expenses last year, an average of roughly $6,000 per employee.

At least 10 expensed more than $50,000 and one came in tops at $109,574, and it wasn’t former president and CEO Jessica McDonald ($43,379).

What’s missing from the return? In what must be a first for a B.C. government operation, companies that have “shred” in their name.

As for the 2011 cost-cutting, another 40 severance agreements were signed with non-unionized staff — that’s on top of the 175 signed since 2013/’14 — some representing up to 18 months in pay.

There’s another ticking time bomb in the return buried on page 55 in the second to last note to the financial statements: “A contractor has filed a Notice to Arbitrate a claim against BC Hydro. BC Hydro has filed a counterclaim.”

I don’t recommend spending any of Clark’s hyperbole when it comes to the 2011 “cost-cutting.” The results don’t match the spin.

Dermod Travis is the executive director of IntegrityBC.

www.integritybc.ca • @integritybc