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If ever a book was a scathing indictment of government policy it's Liquid Gold - Energy Privatization in British Columbia, an analysis of the restructuring of B.C. Hydro and the headlong rush to independent power production created by the Liberals.

In his new book, John Calvert, who has a PhD from the London School of Economics and is an associate professor at Simon Fraser University, rips the provincial government from just about every possible angle.

He argues convincingly that the privatization of B.C.'s energy supply is putting rivers at risk environmentally, driving up energy prices and undermining the viability of B.C. Hydro, the publicly owned utility that produces some of the lowest electricity rates in North America.

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One might wonder why any government would mess with a public utility that was doing such a good job in providing cheap, reliable power to the masses. The unfortunate answer that emerges from Mr. Calvert's analysis is that the Liberals did it because they were blinded by their own ideology. So convinced were they that privatization was the way to go that they were willing to gamble with one of B.C.'s greatest assets - B.C. Hydro - while selling off publicly owned, power-generating river and wind sites at fire-sale prices.

The Liberals began pushing independent power in 2002, introducing a new energy plan that Mr. Calvert says was "designed to eliminate the historical function of B.C. Hydro as an investor - and owner - of energy on behalf of the province."

To do so, it banned the public utility from building new electricity generating facilities (Site C being one possible exception) and made it start buying from independent power projects, known as IPPs.

B.C. Hydro began signing energy purchase agreements with private developers - and those contracts opened the floodgates on investments. Soon money was pouring into IPPs and projects began springing up on rivers all over the province.

Some 500 water licences have now been issued - claim stakes in the new gold rush.

Is this a good deal for British Columbians?

No, says Mr. Calvert.

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"Because B.C. Hydro is required to purchase energy from private power developers located within the province, it is now paying as much as double current energy-market rates ...

"The system effectively makes B.C. ratepayers, through EPAs, pay the capital costs of new power projects being built by private energy developers. Yet, at the end of the day, despite the very high prices it pays for private energy, the public gets no assets, no guarantee that the energy will not be exported in future, and no price protection once contracts have expired," he writes.

Mr. Calvert also complains it is disingenuous of government to promote IPPs as "green" because the projects disrupt the flow of rivers, raise water temperatures, and cause damage through road and power line construction.

The government likes to say it watches over all this with its Environmental Assessment Office, but Mr. Calvert points out that in the 10 years it's been in operation, the EAO has never rejected a project.

Some watchdog.

"Under the Energy Plan, environmental concerns are near the bottom of the list of the government's priorities, even though they are frequently referred to as if they were the driving force of much of its policy agenda. Smoke and mirrors, rather than serious environmental objectives, are what the government is actually delivering to the people of B.C." states Mr. Calvert.

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After reading this thoughtful analysis, one has to conclude that the privatization of energy in B.C. may be the worst public policy ever pursued by government in this province. Think of that the next time you flick on the lights.

mhume@globeandmail.com

CORRECTION

B.C. Hydro continues to be a Crown corporation solely owned by the government of British Columbia. Incorrect information appeared in a headline in some editions of yesterday's paper.

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