It seems that New Westminster’s main substation (which is owned by BC Hydro) needs some upgrades. This makes sense, the City has seen a lot of growth in the last 10 years, it seems reasonable that a few upgrades would be needed. It also happens the agreement between the City’s unique electrical utility and our beleaguered provincial Power Authority over the maintenance and operation of the substation also needs some upgrades, so they are going to do both concurrently. No problems there.
Most of the rest doesn’t make sense to me, however.
Granted, I am a little thick.
First off, the whole reason for this notice is that the agreement is longer than a typical 5-year agreement, and that creates some interesting problems in the Community Charter (the Provincial regulation outlining the roles and responsibilities of local government).* Essentially, these types of agreements that involve financial commitments are easy if they last 5 years or less. Longer than 5 years and the City needs to be approved by the electorate. Essentially, an elected Council has more authority to make 5-year commitments than longer ones. This makes sense when you think about it, it stops one particular Council from dooming a City to a life of servitude to a bad agreement. The practical result is that Cities make a lot of 5-year agreements, and renew them every 5 years. So why is Hydro requesting an 8-year one here?
And who exactly is paying for this $23.5 million upgrade? Here is the quote:
“The cost of the upgrades will be fully funded by BC Hydro. The Agreement commits the City to reimburse BC Hydro for all costs relating to operating, maintaining and upgrading the substation and provides the option for the City to pay out the full amount of the remaining balance of the substation upgrade costs at any time during the term of the agreement.”
I read that as saying BC Hydro is paying the cash up front, but we can expect a bill. That seems fair, we are the ones who need it. The 30,000 residences and businesses that hook up to New Westminster Power should pay the $800 each to cover the cost. Except our Electrical Utility has a $33 Million accumulated surplus, so I guess we could pay it off right away. Or maybe we can’t, as maybe that surplus includes assets? Jeezz… I need an accountant here. (Talking to accountants, I have learned enough to know that I know too little to make actual intelligent discussion about accounting – Me talking accounting is like Kirk Cameron talking evolutionary biology…hopelessly out of my element)
But it is this part of the proposed agreement that first raised my eyebrows:
“The Agreement also includes a “revenue guarantee” provision in accordance with BC Hydro’s Tariff Supplemental No. 6. The “revenue guarantee”…(clip) …is only paid out if incremental revenue projections accruing to BC Hydro over the next 12 years are not realized.”
So if I read that right, BC Hydro has decided the amount of electricity New Westminster will buy over the next decade or more, and if New Westminster does not buy that much, they still get paid for that much? As the environmental whacko I am, this makes me wonder what this means for the City’s energy management goals? If the City were to decide, a few years down the road, to take a proactive approach to energy conservation, and start seriously reducing it’s use of electricity, and incentivise efficiency of co-generation amongst the users of the Electrical Utility, will that effectively work against our financial interest? Is this a built-in incentive against conservation?
What does that mean for the new energy manager we are about to hire?
I have a second concern about the whole “Democracy-Accountability” side of this issue. Since they need to get approval from the electorate to enter this agreement, they have decided to allow people to voluntarily vote against it, by showing up at City Hall and filling out a form. And if 4,900 people fill out that form within the next month or so, they will take it to referendum. Is it just me, or is that a little bass-ackwards?
For perspective, 4,900 people is more than the number of votes required last election to get elected to City Council (of our present 6 councilors, only Jonathan Cote received more than 4,900 votes), and the City seriously expects 4,900 people to show up and fill out a form to force a referendum over a vague agreement with BC Hydro based on a vague ad in the local paper?
Especially when an actual election is coming up in November, doesn’t it make sense to just add this to the Civic Election as a referendum question? That way the issue can actually be discussed, and the people in the City who have decided this deal is a good one for the City can actually stand up and explain to us why it is a good deal. They would be able to educate the electorate about the need, and we can vote. Isn’t that how democracy should work? Does anyone doubt that the HST would still be here if the Liberals had taken the truthful approach and sold it on it’s benefits before en election instead of lying about it after?
Some may suggest I am tilting at windmills here, and I may be. However, the Community Charter has good reasons for creating these limitations on local government power, and sets clear criteria for when the electorate must be consulted. I just think those types of rules should be respected in the spirit of, not just the letter of, the law.
*As we go into the municipal election season, I think this will be the question I ask any Candidate for Council or Mayor who knocks on my door: “Can you explain to me the difference between the Community Charter and the Local Government Act?” Since they constitute the regulatory framework under which a City is administered, and the Candidate is looking for a job administering a City, I think the question is quite fair.