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The IPP contracts contain terms to protect against inflation, which Davidson wrote “could potentially add another $1 billion to the cost estimate over the next 20 years” plus another $7 billion for the longest-term contracts.

“Government directed B.C. Hydro to purchase 8,500 GWh of firm energy B.C. Hydro did not need,” Davidson wrote.

Despite that, the government has said it does need more power as part of its CleanBC plan to electrify the province and meet its pollution reduction goals. That is in addition to power from the Site C dam project.

“It’s the type of intermittent power we were buying that is at issue here,” said Mungall. “The reason Site C is something we are going to need in the future is because it’s firm power. We can lift up the spill gates as needed and run the generators as needed, which you can’t do with a lot of these smaller IPPs.”

The report comes as the B.C. government finishes the first phase of a review into Hydro’s practices in an attempt to find savings and lower rates. Results of the review are expected Thursday. A rate freeze the NDP promised in the 2017 election was rejected by the independent B.C. Utilities Commission because it was deemed unaffordable to Hydro.

Davidson recommended Hydro be tougher when any future IPP contracts come up for renewal that generate intermittent energy, and only make one offer priced at the real market value of the energy produced.

He also called for the reversal of any remaining self-sufficiency policies for Hydro, which could have the added benefit of freeing up Hydro’s energy trading arm, Powerex, to make more money.

Davidson also called for more transparency on future IPPs and the restoration of the utilities commission oversight power on Hydro contracts, which had been circumvented by the previous Liberal government.

Hydro currently has a moratorium on Hydro’s standing offer for IPPs. But government would need to change the law to cancel the program.

Mungall said some First Nations own or partner in IPPs and any change government will make to the program needs to consider the financial impact on their communities.

rshaw@postmedia.com

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