The Moses Creek waterfalls.

IPP developer who is BC Hydro engineer to divest from Moses, Begbie Creek projects

BC Hydro engineer serving as director in IPP companies to divest directorship, equity in local projects.

A BC Hydro engineer who is the developer of the Begbie Creek independent power project (IPP) and co-developer of the Moses Creek IPP will divest himself of directorship and partnership roles in companies developing the local IPPs due to a perceived conflict of interest.

Bruce Granstrom, a Revelstoke-based senior engineer with BC Hydro, has been involved with these and at least two other local IPP projects in the past decade, but will now resign following an unusual turn of events last week. The resignation notice came in a media statement from BC Hydro sent on Oct. 25.

The impetus for the resignation is an Oct. 20 email inquiry from the Times Review to Revelstoke-based BC Hydro spokesperson Jennifer Walker-Larsen.

“I have a question about BC Hydro employees developing IPP projects. Can you give me a ring?” wrote the Times Review in a preliminary enquiry to Walker-Larsen.

A response from Bruce Granstrom came the next morning, when he emailed noting Walker-Larsen had passed the message along to him.

The muddied line of communication was immediately a concern; is it appropriate for the public utility’s communications department to pass along media and other stakeholder enquiries to the developer of IPP projects – especially general enquiries not even referencing the proponent? Is the problem exacerbated in a rural office where BC Hydro employees work closely together? Is it appropriate for a BC Hydro senior engineer, who earned remuneration of $121,283 from the Crown corporation in 2011/12, to be a director and partner in a company whose business model is to sell private power back to BC Hydro?

That Bruce Granstrom has been involved in local IPP projects is no secret. He’s been referenced in Times Review stories as far back as 2011 in projects such as the proposed IPP project on Begbie Creek, and more recently the Moses Creek IPP project. The Moses Creek project was in the news due to a public referral that came to Revelstoke City Council on Oct. 8. Part of that project is within city limits and will need city zoning consideration.

In past stories, Granstrom told our reporters he was a consultant on the projects. A corporate registry search showed that Granstrom is the director of Streamflow Energy Inc., which is developing the Begbie Creek IPP project.

He is one of two listed directors of Moses Creek Power Inc., along with Alex Szirmai.

Both are small-scale, run-of-river power projects. Granstrom is also listed in McKay Creek Power Company partnership dissolution papers filed in late 2008 with the B.C. Ministry of Finance registry service. Granstrom was also involved in the Akolkolex hydro project.

In an interview with the Times Review, Granstrom said he had cleared his involvement with the projects through an internal BC Hydro code of conduct process. Granstrom said he studied micro-hydro in university and had been involved in consulting on projects as far back as 1992. “It’s a very specialized field,” he said. Granstrom said he worked with “friends and acquaintances” on local projects they’d like to develop.

He said he’d taken steps to avoid the media spotlight on the projects as part of an effort to adhere to BC Hydro code of conduct rules. “I have an obligation to my employer not to be in the media … making them come up in the media in a negative way.”

In an Oct. 25 written statement, Chris O’Riley, B.C. Hydro Executive Vice-President of Generation, concurred that Granstrom, “received the appropriate approvals from management and our ethics office.”

Employees can pursue outside work, investments and contracts on their own time, O’Riley said, as long as they use their own resources, don’t use confidential Hydro information, and don’t harm Hydro interests – amongst other requirements.

O’Riley stated that, despite the official approval, “I recognize that a perceived conflict still existed. As of today, the employee has advised me that he will divest himself of all equity in and directorship of the hydroelectric development projects he was a part of. I think this was the right decision for him to make.”

Granstrom was not available for a follow-up interview after the BC Hydro statement; it’s unclear what will happen to the ongoing IPP projects.

The Times Review filed a series of follow-up questions with BC Hydro, but answers weren’t available by press time.

Opposition energy critic plans Revelstoke open house

B.C. New Democratic energy critic John Horgan played down the resignation, saying he respected O’Riley, and felt that conflict rules at the Crown corporation were adequate.

Horgan said the BC Liberals have mismanaged BC Hydro, noting documents leaked in early September pointing to a 26 per cent Hydro rate hike in in the next few years, adding more than $260 to the average B.C. family’s electricity bill. Horgan said IPP contracts were a contributing factor driving up electricity bills.

“The Liberals say there’s a need for infrastructure and we have to invest now, and that’s partly true. But the numbers are fairly graphic. You’re buying power at $124 a megawatt hour, and the spot market price is about $25. You can’t continue to do that year after year after year.”

He said the recent government announcement that 11 IPP projects had been suspended and another eight are under review are an admission of the problematic and costly structure of the private power.

Horgan said the liquid natural gas (LNG) rush in northern B.C. makes determining the province’s actual electricity needs difficult, and the problem is exacerbated by political interference with BC Hydro and the B.C. Utilities Commission (BCUC).

“There is confusion in the marketplace when it comes to electricity. Overlaying the top of this is BC Hydro’s plan (the BC Hydro Integrated Resource Plan) – which is a 20-year document  that the Liberals dumped on a Friday afternoon in August. The response period is over. It’s not going to the [BCUC], it’s going to cabinet,” Horgan said.

The Integrated Resource Plan consultation period ran from Sept. 3 to Oct. 18.

“The same boneheads that have been making decisions – the cabinet of the B.C. Liberal party for the past 13 years – are going to sign off on a document that the [BCUC] doesn’t get a sniff at. That doesn’t make a lot of sense.”

Horgan said he is planning a tour of the region and will appear at a public open house with Columbia River–Revelstoke MLA Norm Macdonald in late November or early December.

“I hope people will come out and … talk about these challenges and what we can do to fix them. First and foremost, my mom used to say, ‘If you’re in a hole, the best thing to do is stop digging. I think that’s something that BC Hydro should want to take heed of as well.’”

Update: Oct. 31

Following press time, BC Hydro spokesperson Simi Heer emailed answers to several outstanding questions.

Is the practice of BC Hydro employees consulting or owning IPP projects widespread? Heer said Hydro is aware of one other employee who “had an interest” in an IPP project, but that the project’s application was denied.

Heer also said Walker-Larsen had spoken with Granstrom following the Times Review’s initial inquiry, but that the local public relations spokesperson hadn’t requested Granstrom contact us.

In their own words:

Here is the complete statement issued on Oct. 25 by Chris O’Riley, BC Hydro Executive Vice-President, Generation:

Similar to many other organizations, matters like this are governed by BC Hydro’s Code of Conduct. Employees can engage in outside employment as long as they declare their outside business activities and avoid any conflicts of interest or other breaches of the Code’s provisions. The outside work must be done on their own time, using their own resources and must not adversely affect their performance or objectivity at BC Hydro. Employees are required to get approval from their supervisor to avoid any potential conflict of interest. And, of course, employees cannot use confidential information or resources in doing the outside work.

In the case you are inquiring about, the employee received the appropriate approvals from management and our ethics office. However, I recognize that a perceived conflict still existed. As of today, the employee has advised me that he will divest himself of all equity in and directorship of the hydroelectric development projects he was a part of. I think this was the right decision for him to make.

— Chris O’Riley, Executive Vice-President, Generation

 

 

 

 

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