Subject: Re: BC Hydro Annual Report: 2011
Date: Wed, 20 Jul 2011 21:20:29 -0700

Well no one should be surprised. From what is reported, no change has been made to the manipulation of the regulatory asset account.At the end of 2010 it was at $2,157 million and at the end of 2011 it stands at $2,436 million. To remind folks, the Regulatory asset account is made up of accounts receivables (future rate increases and incomes).  So GAPP does not yet fully apply for these statements. Hydro states they will be delaying making accounting changes until at least Jan. 1,2012.

Total assets and total liabilities increased by about $1.5 billion. This in turn means Hydro needed another $1.5 billion of capital and debt to produce/acquire and deliver 50,607 GWhrs to domestic customers (close to the same amount in 2010). The cost paid to the IPPs for contracted energy rose by $100 million so more expensive energy being blended than last year.

The most interesting feature in this 2011 report is the Auditors “Consolidated Statement of Operations”. Unlike 2010, this statement no longer discloses net income from operations before transfer of the amount from the Regulatory Asset Account. They just don’t want people to know the shell game being played. However, on page 36 of the 2011 Annual report Hydro states that $1,210 million was the amount transferred from the regulatory Asset account into the “Consolidated Statement of Operations”. Now that is a lot of money which means  operations net income before transfer there was more than a $600 million operating loss in 2011. There must be enormous pressure to have rates go higher faster so brace yourselves.

Again, as in 2010, trade income is lower; $578 million vs $739 million in 2010.