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The W.A.C. Bennett Dam and the Williston Reservoir. Transmission lines in the foreground carry electricity to the BC Hydro grid.

On orders from the provincial government to trim its payroll and limit overtime, BC Hydro has now been taken to task for a growing reliance on outside contractors.

BC Hydro, after concerns raised by successive ministers of energy about rising costs and empire-building, was challenged by one of its unions over contracting out for higher-priced help to do the work previously performed by union employees. A sample of 10 cases was brought forward and the union, COPE 378, recently won the grievance in arbitration.

Energy Minister Bill Bennett said Wednesday he won't interfere with Hydro's growing use of outside help, even though its contracting costs have climbed from $3.2-million in 2010 to $25.1-million today.

"If they decide one of the ways they can stay within [government spending caps] is to contract out, they have to have the flexibility to do that," he said.

But NDP energy critic Adrian Dix said BC Hydro is also getting around restraint efforts by allowing the ranks of middle management to grow at the same time that contracting out is increasing.

He noted that the number of people earning more than $150,000 is three times greater than in 2006. At last count, there were 701 employees across BC Hydro and its subsidiaries in that pay bracket.

"It's kind of the 'daily double,' where you increase internal costs and contract out more," Mr. Dix said.

However, BC Hydro has made some cuts since 2011, when there were 716 employees earning more than $150,000 a year. At that time, a government review of BC Hydro spending concluded that the Crown corporation needed to cut its work force by at least 1,000 full-time positions – a target it met.

But in arbitration last month, the union argued that many of those downsized employees ended up getting hired back on contract at higher pay, resulting in no savings.

Mr. Bennett said he will wait to see if the union pursues other cases in arbitration before he will assess the potential impact on BC Hydro costs. Over all, he said, he believes BC Hydro's payroll compares favourably to other major Canadian utilities.

He added: "Success is always uneven; there are always things that can be improved. … It's no surprise to me that BC Hydro still has work to do."

BC Hydro's management has been under fire this week over revelations that its newest $725-million transmission line project is mired in conflict, delay and possible cost overruns. It is incomplete and at least a year behind schedule, and BC Hydro is now heading into arbitration with its primary contractor.

Premier Christy Clark told reporters Wednesday she is satisfied BC Hydro is getting spending under control under the new president and chief executive officer, Jessica McDonald. The Premier added she is confident the Crown corporation can manage the $8.8-billion Site C dam project despite other project problems.

"Site C is the biggest project they have ever had, the most expensive, and I would not have approved that to go ahead … if I wasn't absolutely confident that this CEO and this management board is up to the task of keeping costs under control."