Natural resource development and the role of the state : the case of hydroelectric power planning in British Columbia
Creators: name: Payne, Raymond W.
Publisher: name: University of British Columbia
Year: 2010

description: This thesis explores the role played by the state at the provincial level in the planning of hydro-electric power development in British Columbia. The electric power industry has been a primary focus for government intervention in the economic affairs of most western industrialized countries. Not only has the structure and scope of the state's regulatory activity in the industry been more extensive than most others, but governments have often gone beyond such regulatory supervision to assume a more direct role in the production of the commodity itself. In British Columbia, however, the direct entrepreneurial role played by successive provincial governments led to major planning failures. Serious social and environmental costs were ignored in development decisions, economically dubious projects were constructed, and the electric power system as a whole was seriously overbuilt. This thesis argues that the problems associated with state-directed hydro-electric power development were institutional rather than technical in nature. Two types of institutional factors are shown to have played a key role. First, the scope of power planning has been limited by the role played by the provincial state in the broader political economy of British Columbia. This role has been basically non-interventionist in nature, with the exceptional interventions in economic affairs being associated with the removal of barriers to the private exploitation of the natural resource base. This broad economic role has conflicted with the state's central position as arbiter among opposing societal interests and has biased subsequent government planning activities toward facilitating the supply of electric power rather than evaluating the demand for it. Second, rigidities within the institutions employed by the state to undertake power planning activities inhibited the adaptation of these activities to a changing economic environment. Organized structures were created to implement particular power policy initiatives, and these organizations developed their own set of interests and priorities. Hence, a bias against the re-evaluation of previous policy and planning approaches was created, even in the face of clear evidence of their failings. In Chapter 2, the conceptual and theoretical groundwork for the study is laid with an examination of four alternative approaches to the economic role of the state in western capitalist societies. The key questions explored are the rationale for state intervention, the choice of policy instruments employed, and the effectiveness of these instruments in undertaking goal oriented planning. In Chapter 3, the stage for the analysis of power policy is set with an overview of the economic context of electric power production in British Columbia. This chapter establishes the staple-based nature of the B.C. economy and analyses the changing role played by electric power in this economy. Chapters 4 through 8 detail the historical evolution of power planning and policy in British Columbia. Chapter 4 documents the predominantly laissez-faire approach to power policy during the pre-World War II period and the gradual emergence of demands for a more active regulatory role by government. Chapter 5 documents both the implementation of electric power regulation during the 1950s and the emerging policy preoccupation with underwriting the development of British Columbia's large-scale hydro resources. The chapter focuses on the links between this overall role, the creation of a dominant Crown corporation in the power industry, the decision to undertake an economically dubious sequence of hydro development, and the lack of attention given to environmental issues. In Chapter 6, the focus is on the use of the Crown hydro corporation as an economic policy instrument during the 1960s. The preoccupation with initiating large-scale hydro developments shifted to a concern with producing power at the lowest possible direct cost to the consumer. Chapters 7 and 8 focus on the shift from power policy to power planning. From the late 1960s through the 1970s, policy making at the provincial level was largely replaced by an institutionalized, formally rational decision making process dominated by technical experts. This shift, by creating a powerful set of established interests within the provincial power utility, gave added momentum to the expansionary power policies of the 1950s and '60s during a period when their underlying justification was being increasingly questioned. Finally, Chapter 8 concludes by examining the re-assertion of regulatory control by the provincial state over the now publicly-owned power industry. The conclusion summarizes and interprets the evidence presented in Chapters 4 through 8 in light of the theoretical concepts introduced in Chapter 2. The central problem of state involvement in the electric power industry is shown to be the representativeness and adaptability of policy and planning institutions. A number of recommendations are made to overcome the deficiencies identified in the study.