Clear Full Forecast

The Written Word: Rafe Mair January 14th

By Rafe Mair

Sunday, January 14, 2007 03:45 AM

In a recent article, Ben Meisner, the voice of common sense from Prince George, examines the deal that would have had Alcan sell “new” power to BC Hydro with a mere 700% markup. (see Promises, Promises:One Man's Opinion)

The BC Utilities Commission, to the considerable surprise of the Campbell government which appoints its members, disallowed the deal. James Quail, legal counsel for the B.C. Public Interest Advocacy Centre, summed it up beautifully when he called it a "sweetheart" arrangement whereby Alcan is "turning water into gold" without consideration for Hydro customers who will have to bear the cost of the deal.

BCUC agrees.

Alcan takes the position that it should get market value “for its shareholders” which neatly ignores the fact that it can create this power cheaply because they don’t have to pay for the water, water that belongs to you and me, folks

Now I admit I wouldn’t know a watt from a whatnot but I do know something about perfidious Alcan.

 The original deal Alcan made with the provincial government back in 1948 was that if the company could reverse a river, create a lake or two and permanently screw up the Nechako River at the risk of the huge Sockeye salmon runs that pass through it, they could have power for its smelter "in the vicinity of the works."

It doesn’t take a Supreme Court judge to see that Alcan wasn’t given the right to create and sell power into the BC Hydro grid but that’s what happened.

Alcan has become, with deals with the provincial government, a power corporation that incidentally produces some aluminum.

Back in 1994 I had Bill Rich, then a vice president of Alcan and the irrepressible Ben Meisner, then a talk show host in Prince George, on my show to debate the Kemano II agreement and in frustration Rich blurted out that Alcan wasn’t just an aluminum company but was a power company as well. This in spite of the fact that the 1950 deal confined their power creation to the “works” and the “vicinity”.

The good folks of Kitimat have finally discovered that Alcan isn’t such a nice company as they thought. They’ve seen with their own eyes how aluminum production has been reduced, and jobs lose, so that Alcan could re-direct the power to BC Hydro and pocket huge profits.

Why hasn’t Alcan been legally held to the original deal instead of being permitted to break it? Why hasn’t the Province taken them to court and stopped them as one would any burglar?

Easy.

The only person in the world which has the legal status to prevent this theft is the BC government and since they, through BC Hydro have been buying this power – in other words they are the “fence” for the burglar – they can’t sue. Since no one else can sue, Alcan and the Provincial government can continue to cock a snook at the original agreement and Alcan can go right on killing the smelter at Kitimat while promising new ones all over the province – that will never be built - in exchange for the right to take power from public waters and sell it back to us at outrageous rates.

Think of this folks – it wasn’t the Campbell government that stopped this outrage but by the BC Utilities Commission who owe their jobs to Mr. Campbell.

Unfortunately – and watch for it – the Campbell government will find a way to overturn this recent decision and Alcan will get the right to do it all over again. For if nothing else, the Campbell government looks after its friends even if it has to change the law to do so.

    


Previous Story - Next Story



Return to Home
NetBistro

Comments

Well written article about who did what to whom, but the omission of the important fact that four NDP premiers during the 1990s did not forcefully confront Alcan either puts a somewhat one-sided slant on this story.

In fact, during those years vast amounts of power were purchased from Alcan Kitimat and exported to California – a precedent was established that has
far reaching legal implications now, I am sure.

That power should have been used for the production of aluminum and for other business and industrial uses in the vicinity of Kitimat, as agreed to in the original agreement.

I would love to see what exactly a NDP government would do NOW under the same circumstances as it would be bound by the same legal restraints.

Gordon Campbell may be reluctant to take the bull by the horns, but he certainly should not sweeten the pot for Alcan which already has enjoyed
one of the most rewarding arrangements for power generation given to any company anywhere for over half a century.

What would Alcan do with surplus power if nobody would buy it?

Produce aluminum, of course.
Didn't the NDP stop a tunneling project that Alcan had undertaken to increase their power production and which Government approved the project in the first place?

Must be someone out there that can tell us what happened.

Cheers
I think you are correct about the Kemano II project and that it was halted by NDP intervention. However, after doing some more investigation, I think that Alcan had (from day one) the right to build double the number of generators and divert enough water to run them. Alcan constructed only half the allowed capacity and has been running with that ever since.

However, the use of power for other uses rather than the production of aluminum in Kitimat was never stopped by any B.C. government.

How reasonable it is to expect the previous and present governments to try this is explained by Mr. Mair himself:

"The only person in the world which has the legal status to prevent this theft is the BC government and since they, through BC Hydro have been buying this power – in other words they are the “fence” for the burglar – they can’t sue."

(The B.C. government is not a "person" but as a government it can indeed enact "legal" and binding legislation; of course: it must have looked into all the legal aspects and ramifications and what the penalties to B.C. would be in case of such extraordinary action).

The BC Courts ruled last year that the City of Kitimat had no status to try to force Alcan to live up to the original agreement(1948,1951) because the City was not a part of the original agreement. The agreement was between Alcan and the Provincial Government, however the court did say that the City of Kitimat might have a case against the Provincial Government because the Ministers who allowed the sale of power to BC Hydro may not have had the authority to to this.

As I understand it the City of Kitimat is presently in the process of taking the Provincial Government to court to establish that the Ministers did in fact not have this authority.

There should be a ruling from the court in the near future.
Dear Mr. Mair,

I am disappointed in the style and content of your commentary above.

You lambaste Alcan as a Power Corporation with a sideline in aliminium - something you know to be untrue, and offer your personal opinion that the company is perfidious, and a burgler, suggesting that Alcan should not sell power onto the BC Hydro grid.

I put it to you that the very reason that Alcan was invited to the region back in the 50's was to bring on the Northwest by encouraging industry and the population that would perforce follow it. In order to make this happen a reliable power supply would be necessary, hence Alcan was invited to the Northwest to spend a fortune on the 'works' which included the Kenny Dam and the powerhouse at Kemano, so that excess power could be used for industrial purposes both here in Kitimat and as far away as the Kenny Dam, or Vanderhoof.

In the early days it was not possible to transport the power throughout the region, but when the grid was finally connected from the East it was at last possible for Alcan to fulfill its obligations.

The matter is currently before the courts and we shall shortly hear their decision, so for you to prejudge the issue and throw insulting names at the company does nothing for your reputation or the advancement of the NW. (See my reply to Mr.Meisner's 'Promises...' article)

Trusting future commentaries from your desk will be more objective.

Yours, Howard Mills.