FORT ST. JOHN, B.C. – BC Hydro’s chair was in Fort St. John to be the keynote speaker at the Fort St. John & District Chamber of Commerce luncheon on Wednesday afternoon.
W.J. Brad Bennett wanted to cover many topics during his speech at the luncheon. He touched on areas such as investments BC Hydro is making, why those investments are being made, plans for the future and BC Hydro in the province.
Bennett’s family has a long history with BC Hydro and a long history within the province of B.C. His grandfather, W.A.C. Bennett was Premier for 20 years from 1952 to 1972. His father was then Premier from 1975 to 1986.
“During that time, a lot of leadership was provided by their governments to BC Hydro and the company.”
Bennett says that although times have changed, the BC Hydro has grown and benefitted from the leadership back in the earlier years.
“We have a great system and it has provided with stability, prosperity and dynamic economic growth.”
There are currently 79 dams at 41 sites and 31 generating stations and over 300 substations. Bennett said in that system they generate and purchase when they have to. He says they use reliable and stressed the word “affordable” electricity for BC Hydro customers.
Bennett also said that at one point in time, over 200 potential dam sites were identified on the Peace River alone. They ended up with four preferred site locations on the Peace River. They ended up with 3 that prevailed. The W.A.C Bennett dam was built and then came the Peace Canyon dam and now, the controversial Site C project.
He also explained that there are ‘aging assets’ in the system currently even though BC Hydro is in a coveted position right now.
“We can’t just stop and say ‘well, we’ve done a good job and we don’t need to do anymore’. That isn’t how the world works.”
Bennett says that generating facilities are currently almost half a century in age (50 years old). He says they require capital investment.
Energy demand is also forecasted to increase in B.C. by 40% over the next 20 years. Population is also expected to grow by 2 million people in the next 25 years.
“We need to handle that. We need to stay in front of that and we are planning to make sure that we can meet the needs of customers and provide the electricity to our customers when they need it, on demand.”
When it comes to money figures, BC Hydro’s revenues in 2016 were $5.7 billion. Bennett says capital expenditures last year were $2.3 billion and at the end of the fiscal year, they had $30 billion in total assets. In the next ten years, BC Hydro plans on spending over $2 billion dollars every year in capital and this is to address issues that need to be addressed such as aging infrastructure, maintenance, safety, reliability and capacity.
“These projects on the economic side are projected to generate a total combined impact of $13 billion in profits and over that time, it is expected that activity will create 100,000 person years of employment.”
When it comes to Site C, Bennett says that the project is in ‘good shape’. Hydro’s forecasted budget for the project is $8.34 billion. They also have board contingencies built into the budget and the government treasury department added another $400 million in contingency as a ‘just in case’. While they have that extra money from the government and that brings the total to $8.9 billion, Bennett says that Hydro will stick to the $8.34 billion price tag.
Then there was time for questions from those present at the luncheon. An audience member brought up facts from other sources in regards to BC Hydro’s debt load and weak ratings.
Bennett responded to the information, saying he isn’t aware where the numbers came from and that they aren’t on par with BC Hydro’s.
“First of all, I don’t know where that $800 million figure comes from (the $800 million loss figure). I don’t know where that comes from.”
The audience member said he saw the figures on “verifiable sites” as far as he could tell. Bennett said those are not correct. Numbers also came from Moody’s the audience member said.
“First of all, when it comes to Moody’s, they are one of 3 bond rating agencies, as you know. They came up with that statement as I guess based on benchmarking variables that they were looking at the time but it is not the same case with Dominion or Standard & Poor’s. As a matter of fact, we had S&P in our offices three weeks ago talking to the board, they would say that we are in good financial condition. What you need to know is a few things. First, we have got a large capital build out going forward but we also have a 10 year plan that has been agreed to with the government and was agreed to a couple years ago which has the government and takes into account our capital, our revenue requirements. That 10 year agreement has the government after this fiscal, weening off their dividend at the rate of $100 million a year until the dividend goes to zero or continues to such time when our debt to equity hits 60/40. Currently, we are mandated to keep a equity to debt ratio of 80/20 and our debt is very well managed.”