Monday, November 9, 2009

Why is it bad for electrical power to be produced by private industry?

The campaign against green power in BC seems to primarily be focused on the fact that the power will be developed by private companies and not by BC Hydro. Certainly this is what the Western Canada Wilderness Committee campaign sounds like. The Sierra Clus is a bit different, which is nice to see. The union COPE, local 378, seems to only be about public ownership of power. The Citizens for Public Power are also all about public ownership of power generation.

Why is the idea of private ownership of power production such a problem for so many people in BC? I do not hear any demands that food only be produced by a Crown Corporation. No one is talking about moving forestry into the hands of the government. Why is need to have power production in the hands of the government?

I can not think of any other business that is in as much in the hands of government as power generation. The ownership of power by government is left over piece of the 1950s economic thinking. BC Hydro was created in the 1950s by the Social Credit government to speed up industrial development in BC. The idea was to have the public sector swallow the cost the infrastructure and then provide artificially cheap power to business.

I can understand the case of government to own the transmission grid as this is the same sort of infrastructure like the highways are, but there does not seem to be any case for the public to own the power generation facilities. Certainly the economy of the province would benefit from private generation through more jobs and more taxes for governments.

What worries me the most about this demand for public ownership of power generation is that it will stifle innovation. Big corporations are bad at innovation and doing things in a new way. Government is by nature slow to change course and seems fundamentally opposed to innovative thinking. Here in BC was have a raft of small businesses that are coming up with all manner of innovative ideas around green power production.

In BC we can tap into cogeneration, biomass, landfill gas, micro-hydro, wind, ocean wave, geothermal and other sources of power. We are building a huge base of knowledge and expertise in all manners of green power in this province. This expertise would not be developing if did not have an open marketplace to sell the power.

With all these micro-hydro projects underway in BC, we have a host of companies being developed that can deal with all aspects of the development of a run of the river power project. We have engineers that know how to develop a project, builders that know how to put them in place, biologists that have expertise in ensuring the projects have no impact in fish, and many more people in BC gaining skills that can be applied around the world to expand green power.

Public power projects require the government to provide the investment dollars - money that should be used for schools, hospitals, highways and transit. Private projects get their financing from the capital markets at no cost to the provincial government. In fact green power projects in BC are attracting large amounts of capital investment into BC.

Unless people want political interference in how BC Hydro operates, there is no way in which public power is better for society than private power. Political interference in BC Hydro would normally be used by government to buy votes through making electrical power rates low.

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