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Promises, Promises: One Man's Opinion

By Ben Meisner

Friday, January 12, 2007 03:46 AM

         Has anyone in the Premier’s office had a look at the deal that the BCUC has just tossed out between BC Hydro and Alcan?  That was the  deal that would see Alcan receive a 700% mark up on the power it sold to Hydro and then of course on to you the user.

Alcan pays about ten bucks a MWH to produce the power and had a friendly deal with BC Hydro where by BC BC Hydro would purchase the power  for $70 bucks a MWH.

Now it won’t come as any surprise just who will end up paying for that high priced power,  the consumer at the end of the light switch will  pay in the form of rate increases.

So BCUC whacks them on the hand and says , No Sir, this deal is too rich , especially given the fact that Hydro had a deal with Alcan for that same power in a contract that lasts until 2014 for a much lower cost. Under the deal, Alcan could have picked up several, and I mean several, Billion dollars.

What is Alcan offering in return?  Well they will build a new smelter that will employ 500 fewer workers. Now Kitimat already has the highest vacancy rate in the province at 44% and Alcan is offering to skin the town for some more and are suggesting that it’s a great deal.

Now let’s examine the deal... So Alcan doesn’t get the rich contract for power, we were told at the BCUC hearings that the province is not, I repeat not,  facing a shortage of power, even without Alcan’s contribution.

So what can Alcan do with that power it can no longer sell to BC hydro?  Bottle it up and put in on the shelf?  This isn’t wine Mr. Premier. Hydro electric power doesn’t get better with age. If you don’t use the water up it simply goes to waste.

So how in the world Richard Prokopanko can come to town and suggest no agreement= no $2 billion dollar upgrade to the Kitimat works is beyond belief, and surely someone in Gordon Campbell’s office must have enough brains to see this.

Unless of course there is a political deal and if there is, let’s all hear about it.

Secondly, if you have this power and no one who will buy it, HMMMM, if you don’t want to manufacture more aluminum, then the water simply goes over the spill way or (heaven forbid) you let it go down the Nechako River.

You don’t have to go to Oslo to get the prize to see that British Columbians have the hammer in this deal, but the way the Premier was talking about the 1,000 jobs you’d hardly think so.

Now the third condition is that the Union will not strike.  That’s a dandy Richard, it almost guarantees that you won’t have to build a smelter and as long as you get the Hydro contract before hand that’s all that is needed. You are not going to find a Union who will give you a long term no strike contract when your company has been saying that it wants to double its wealth every five years, and hasn’t been paying any taxes into the Canadian coffers.

So where does that leave us?  Well the promises being made about a new smelter are a broken record spinning aimlessly on the turntable. The Folks in Vanderhoof were promised a smelter, they got some red flags instead and no smelter, but Alcan got another power contract. The town of Smithers was going to get a smelter as well. Well that one didn’t pan out either. Then there are the people who supported Alcan when they were trying to jam the Kemano completion project through. They didn’t get any new jobs, as a matter of fact the company did them in by cutting the work force in order to sell more power.

The record is there for anyone to see if they wish to take the time to read it.

Since 1981 I have watched this company promise the moon, but never even deliver up a pizza. Of course we are being bombarded with a flurry of ads by Alcan telling us all what great community minded people they are. The ads have worked at least to some extent, there has been a definite silence from the media dealing with the issue, that raises the question does advertising really work?

In 1981 I was asked to leave a hall in Vanderhoof for saying that Alcan had no intention of ever building a smelter in that community, I said it again at the BCUC hearings when the company was trying to take the final flows of the Nechako River. I said it again when I went to Kitimat and again was told I no longer was welcome in that city. I said it again when I spoke to the Chamber of Commerce in Vanderhoof telling them that Alcan was not about to pony up the money for a cold water release. I recall at the time Henry Klassen standing up to say it’s only a matter of a week or two before an announcement is made in that regard. Well Henry, at least 150 weeks have passed without that announcement as well.

So once again Alcan has come to town and is scattering some money around hoping to make us believe that this time things will be different.

Its easy to spend a few million bucks when you know that at the end of the line there’s a few billion in it for you and I hate to say it Mr. Premier and Richard Prokopanko, but  there are fewer and fewer people who believe the pitch.

I’m Meisner and that’s one man’s opinion.    


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Comments

It's a good thing someone remembers all this Alcan history. People have short memories but I have lived here for more than 65 years and can remember all the broken promises Alcan made in the past to get its way. Whenever there is local criticism Alcan's spin doctors pop up and begin convincing us that if we continue to let them use the water from the Upper Nechako River to produce low-cost energy they will "build another smelter" or "provide more jobs" or whatever it takes to convince people that it's alright for us to give them our water. To my knowledge they pay no taxes to support hospitals, roads, social programs in the north. Campbell is now talking about the 1,000 jobs Alcan will create if they get their way. Beware! Like so many other promises, those jobs will disappear like spectres when Alcan gets what it wants.
RIGHT ON BIRCH
ALCAN HAS OUT STICKHANDLED EVERY GOVERNMENT THAT THEY HAVE DEALT WITH IN THE WORLD. BEWARE, THIS COMPANY DOES NOT HAVE A VERY GOOD TRACK RECORD, WITH THE EXCEPTION OF MAKING MEGA PROFITS.BEWARE OF GIFTS THEY OFFER,THERE IS USUALLY A RUBBER BUNGIE ATTACHED TO0 IT.
The big question for me is why have we never had a politician in the North that would stand up to Alcan and call them to the floor? I can not think of a single politician that has made noise especially from the PG area. Does it have to do with Alcan money in our media and politics. I would rather see Alcans money paying taxes supporting this society that has done so much for them in the past.

This is the time to call an urgent halt to further actions by our District of Kitimat politicians in what they describe as their battle to stop what they believe are 'Alcan Power Sales'. The Councilors of the town have said that this is not a battle against 'Uncle Al' so much as that to protect the future and population of Kitimat in the light of what they believe are Alcan's shareholders’ interests, whereby they have for some reason deduced that Alcan's maximum profit from the Kitimat smelter can be made by simply selling all the power that Kemano, Alcan’s hydro–electric powerhouse, can make...this just aint so!

Alcan's maximum profit from its Kitimat smelter, thanks to the nature of the local grid, the sustained value of the LME (metal and power value), and the avowed intention of the company, can absolutely and ONLY be made by smelting aluminium, and therefore, with the new rebuild, the future for our small town and its smelter, along with that of the wider Northwest, could be one of the most secure in the company’s portfolio. Indeed at the conclusion of the proposed smelter rebuild with the modern and clean technology which will save lives and which we, wives, children and families all wish to see, the ONLY power that will be sold by Alcan to BC Hydro will be just enough to heat and light HALF of Kitimat on a good day. BC Hydro will continuously then have to provide the power for at least 50% of the town, and on a day that a Kemano generator is down for repair it will have to import all the power for the town via the line alongside Highway 37. In other words, absolutely zero power will leave Kitimat ever again once the new smelter is built, and our neighbours in Terrace and Prince Rupert, who have an equal interest in the fortunes of Alcan, will have to become solely dependant on BC Hydro’s ability to deliver without the possibility of backup from Alcan in the unlikely event of power interruption.

Isn't this exactly what was argued for by the District of Kitimat at a cost to the town's citizens of over a million dollars? Why is there still dissention on this issue? What can be gained by refusing to admit that we have at last reached consensus?

At risk is the imminent demise of the town, the wider Northwest, and absolutely everyone's investment in the region. That new mortgage, that new bathroom improvement, new driveway, porch or deck - all may well prove completely worthless if the town continues its utterly pointless action. We have arrived! Call off the dogs! Nothing can be gained by further expenditure on lawyers, spin doctors, theatre in Council Chambers, advertisements or press. WE HAVE ARRIVED! Whether one believes that expenditures on lawyers and spin doctors was worth it or not, we have all now arrived at a point where company and town should rejoice that we are singing off exactly the same page.

Whether or not egos may be bruised by having to shake hands in recognition that we finally have what we in Kitimat and the region have long argued for from our different corners, we absolutely MUST now urgently heal the wounds that have caused both an unhealthy and vulture like interest in our small town throughout the nation, and great concern at Alcan’s head office.

We now need to trumpet our pax to the world, reassuring investors interested in our magnificent corridor and its potential, that they are welcome and they need have no fear of legal action if their corporate plan doesn't match that of the city administration. Such a declaration would defuse the recent speculation about our differences which has the potential to so easily scupper our joint bright future here in the Northwest.

At this moment the rebuild is right on the edge of a very slippery slope which, once momentum takes over, could in the next few weeks make it impossible to prevent the funding for our project going to other Alcan plants. Should that happen, it could well be at least another decade before the company decides to invest in Kitimat, when with an even more efficient technology, the plant could be run with a workforce of only five or six hundred, rather than the more than a thousand promised for the next fifty years today.

Kitimat, and those with an interest throughout the province, need to know that Alcan's head office has in the last couple of weeks frozen funds initially advanced for the rebuild, and has forbidden management to discuss the rebuild project in public. It is only the stroke of a pen that currently stands between us and the abyss. We need to understand that the next few days and weeks may make or break the future of the whole of the Northwest depending on whether we can resolve our differences.

Vitriolic and ill informed opinions such as that of Mr Meisner do nothing to further the fortunes of the Northwest that he claims so passionately to have an interest in.

We in Kitimat, often quoted as the envy of all other BC communities, now have everything we could possibly wish for. If we refuse to acknowledge it IMMEDIATELY we could freeze in a 1950's time warp for at least another decade.

Yours sincerely. Howard Mills.
I wonder aloud if Howard Mills has been drinking grape Kool ade. He says Alcan will use all of the power it produces. He may have been under the influence when the BCUC said it would not okay the contract with Alcan for 140 mwh for a sufficent period of time that would earn the company several billions of dollars, because it was too rich and not in the interest of the consumers in B.C.
Mr. Mills may also have missed Richard Prokopanko's commentsnets at the resoruce forum in this city last week in which he laid out the conditions for the new smelter. The contract to sell power to BC Hydro must be honored, Two, Necessary enviormental approvals must be made, and three, must recah and agreement with the Union that there will be no labour disruptions.
No Mr. Mills has also forgot to mention that 500 fewer people will work at the "new Smelter " while on the othr side of the ledger, Alcan will make power for less then 10 dollars a MWH and sell it to BC Hydro for $70 dollars. Now who do you think will pay for this increase cost for Hydsro power in BC. Mr. Mills may have also missed Richard Prokopanko's comment at the Resource Forum when he noterd there were three conditions that would have to be met before any upgrade or new smelter would be built 1. a contract with BC Hydro to for 140MWH, 2. promise from labour unions of no labour disruption, and 3, all the necessary environmental approvals.
No Mr. Mills, the people of Kitimat may have started off slow on this one, but they have seen their homes drop in value, a 42% vacancy, and 1,000 jobs disappear so far, from a company that says it only has the people at heart.
Alcan has not paid income tax, and in its own words, "Want to double the value of their compnay every five years". At who's expense?
Dear Mr.Meisner,

Responsible reporting with the facts is one thing, but to make up the 'facts' as you go is quite another. Of course you could possibly be excused if your 'facts' came from the District of Kitimat which has squandered over a $ million of the town's money on spin doctors, lawyers and theartrics.

To go back to your 'Promises...' article above perhaps a few corrections are in order...

1. You are no doubt aware that it was the government that invited Alcan to set up in the NW, and not vice verca, in order to populate the area which it was postulated was in danger of becoming a satelite of Japan in the last World War. It was hoped that Alcan would power up the NW which would attract a population and industry to the area. The benefit to Alcan, inspite of the incredible cost and risk to the company, was that it would eventually own a powerhouse, once the mortgage had been paid, which would allow it to produce very cheap power for its smelter. The company made very little in the first decades, but has now paid off the mortgage and deserves to benefit from the promise of the project back in the 50's. Were you, Mr.Meisner, to take an intelligent but big risk on say the stock market, and profit handsomely, would you expect everyone around you to cry 'unfair!', and would you agree with them and only take a percentage of the winnings inspite of the risky play you'd just made? I rather suspect that you'd be off to the bank in a cloud of dust.
Alcan, it is said, can now produce a MW for C$10...good for it. This was the inducement for them to come to the Northwest in the first place, and the reason that the NW has most of the population that it does. The provincial average for a MW is C$72. Why should Alcan sell it for less than the going rate, and no, rate payers will therefore pay the same for their power whether BC Hydro gets it from Alcan or another provider....ie. no rate increases. This is not communist Russia, and profits made by industry do not belong to the people. Alcan has been a very generous and responsible corporate citizen in BC, and contrubutes an incredible 10% to the GDP of the province. (where did you get the idea that Alcan doesn't pay tax? Facts Mr.Meisner. The facts please!)

2. The BCUC simply said that it felt that the deal between Alcan and BC Hydro 'wasn't in the interests of the province'. We do not yet know the reason for their decision, and they did not state that they felt it was 'too rich' in so many words. You like the rest of us will have to sit on your hands and wait for their reasoning.

3. You indicated that Kitimat has the highest vacancy rate in the province at 44%. This is simply wrong! The vacancy rate among the appartments in town is a high 39%, but the reason for that is that those accommodations have been bought up by investors (sound familiar Mr. Meisner?) who have refurbished them with a view to renting them out to the 2,500+ workers and their families that will arrive in the next few months to rebuild Alcan. It is virtually impossible to find a mid sized house to buy as there are none for sale, and those few that are on the market are either large houses or small starter homes. It seems to me that the town is banking on a rebuild and not siding with the Mayor who seems hell-bent on preventing it. Yes, when the new smelter has been built it will employ up to five hundred fewer workers, but it may be less. The point is that for the municipal leadership to rush around crying 'woe is me' and telling everyone in the nation that Kitimat is a dying town just could be self fulfilling. Who would bring their friends, family and business to a dying town, and yet that is exactly what the town needs. Kitimat's future is assured, but it would be much better now than in a decade or two.

4. The self entitled in the province would agree with you...'why would Alcan put conditions on a $2Bn investment? Why not just cough up the cash?'
Alcan is a business and not a charity Mr.Meisner, and although you might feel entiltled to their investment, they will be thinking of their shareholders first...hence some conditions. Mr.Prokopanko is simply the messenger for those that havn't yet got it.

5. You seem to suggest that the union would have no interest in reaching an agreement with the company...how so? Agreements exist to benefit both parties, and if there is a benefit to the union's members, why wouldn't they sign up for a perion of labour peace? This is not communist Russia nor Arthur Scargill's home town.

6. True, Alcan has looked into the possibility of building in a number of places such as in Vanderhoof, but if one takes a suggestion as a promise Mr.Meisner, one is bound to get one's fingers burned. At this end of the corridor, there are more and more people looking forward to a new smelter and all the benefits that it'll bring.

7. In your response above you seem to doubt my contention that the company will only be able to provide enough power to light and heat half of Kitimat once the new smelter is built. There will be a mere 55MW available at the Minette Bay Substation where it will be sold to BC Hydro once the new smelter is running. Kitimat consumes 80MW. If one does the maths it would suggest that my contention is correct Mr.Meisner.

I think that the rest of your response is covered in the paragraphs above.

Over to you, but remember that writing in vitriolic terms about Alcan may well help to cause a disater to befall the little town of Kitimat and the ten thousand good people that live here. Be responsible and factual in your journalism.

Yours sincerely. Howard Mills
Mr Meisner,

The name of this site is 'Opinion 250' where the people of the northwest are free to state their points of view and be heard. I was dismayed to read your debasment of another citizen's opinion at the start of your commentary - something which was not only unprofessional, but disappointing and not the type of literature one logs in to read. Please, as Mr Mills says, keep it objective and stick to the well informed facts we are all after.