A confidential study slams government-owned utilities - including the export arm of British Columbia Hydro and Power Authority - for gouging Californians during the energy crisis.
The report, prepared by the California Independent System Operator (Cal-ISO), which runs most of the state's power grid, says large producers used strategic bidding to keep prices high last summer, even in periods of lower demand.
The report reviewed bidding activities of 21 power suppliers, including B.C. Hydro's power sale arm Powerex. The report states that: "Data shows [sic]that [power producers]clearly exercised market power to inflate prices further at higher load conditions."
The report, filed with the Federal Energy Regulatory Commission, uses code numbers to refer to unidentified suppliers.
The Web site for the Los Angeles Times, LATimes.com, said Wednesday it had obtained a confidential document that decoded the identities of the suppliers, and pegged B.C. Hydro's Powerex as the top earner on a list of 10 suppliers that earned allegedly excess profits.
The site said Powerex earned $176-million (U.S.) in alleged excessive profits, several times the amount collected by all but one of the private generators reviewed in the report.
LATimes.com said the report singles out three government-run agencies as consistently trying to inflate prices during last summer's energy crunch: the Los Angeles Department of Water and Power; the federally owned Bonneville Power Administration in the Pacific Northwest; and Powerex, the trading arm of B.C. Hydro.
Neither Cal-ISO or FERC would comment on the Los Angeles Times report Wednesday, nor would they identify the suppliers referred to in the report.
B.C. Hydro spokesman Wayne Cousins confirmed B.C. Hydro's Powerex was one of the suppliers discussed in the report. But he disagreed with the report's theme that government-owned suppliers manipulated energy prices.
Previous analyses of the California power crunch have put much of the blame for the crisis on private energy providers.
"We buy and sell electricity on the trade market, and it is the market that determines the price, based on supply and demand," Mr. Cousins said.
Cal-ISO studied bidding practices for 20 large suppliers in the spot, or real-time electricity market, from May to November to compile the report, which concluded that power providers used strategic bidding to keep energy prices high, even in periods of low demand.
The report said "many suppliers use well-planned strategies to ensure maximum possible prices at all load conditions," and that bidding practices showed the "systematic exercise of market power to maximize profit."
B.C. Hydro's system of dams and reservoirs allows it to buy power on the open market when prices are low, and store water that would otherwise have been used to generate electricity. When prices climb, that water can be used to generate power that can be sold at peak rates.
For the past two years, Powerex has been a cash cow for B.C. Hydro and the province, which receives a portion of the utility's profit as a dividend. In the year ended March 31, 2000, B.C. Hydro reported electricity trade revenues of $1.1-billion (Canadian).
This year, the utility is forecasting export revenue of almost $5-billion, with much of that coming from California.