It鈥檚 obvious the provincial government and the sa国际传媒 Utilities Commission need to keep a closer watch on sa国际传媒 Hydro. When the sa国际传媒 Liberals tabled their 2012-13 budget last week, one that was supposed to differ little from the pre-election budget announced in February, they also had to announce that sa国际传媒 Hydro鈥檚 capital plan was $440 million higher than anticipated.
This unpleasant surprise was sprung on the government mere days before the legislature opened.
The projected cost of two projects rose $274 million, and cost revisions for several others total $166 million.
In 2011, the cost of the Northwest Transmission Line was budgeted at $395 million. That rose to $617 million in February 2013 and to $746 million in May.
sa国际传媒 Hydro is regulated by the utilities commission, the mission of which is 鈥渢o ensure that ratepayers receive safe, reliable and nondiscriminatory energy services at fair rates from the utilities it regulates, and that shareholders of those utilities are afforded a reasonable opportunity to earn a fair return on their invested capital.鈥�
But approval by the BCUC can take time, so the government has exempted certain projects from the verification process. Those include the Northwest Transmission Line, the Site C hydro-electric dam proposed in northeastern sa国际传媒 and the billion-dollar conversion to smart meters throughout the province.
The goal was to make sure that projects important to economic development could go ahead as soon as possible, instead of being tied up in commission limbo for long periods. Skeptics suggest that it had a lot to do with fast-tracking projects that would be good for the sa国际传媒 Liberals in the run-up to the election.
Bill Bennett, the new energy and mines minister whose responsibilities include the publicly owned utility, says he is unhappy with the escalated costs and has promised to rein in Hydro鈥檚 spending. Good luck with that 鈥� other cabinet ministers before him have tried without success.
In theory, sa国际传媒 Hydro operates at arm鈥檚 length from government, but in practice, it doesn鈥檛 work out that way. Rate increases are unpopular at election time and the province gets a dividend from Hydro 鈥� this year鈥檚 is $274 million 鈥� so political considerations too easily become part of the equation.
The chickens have come home to roost. Fast-tracking projects by exempting them from BCUC oversight might save time, but the commission exists to offer an expert second look. Giving the commission more resources to safeguard the public鈥檚 interest would be a better use of money than spending it on gold-plated compensation for sa国际传媒 Hydro management.
Government shouldn鈥檛 micro-manage sa国际传媒 Hydro, but it should know what鈥檚 going on before project costs start exceeding estimates by hundreds of millions of dollars.
No more surprises, please.
