The privatization deal that started in 1988 with BC Hydro selling its gas division to BC Gas, now called Terasen, is about to get even worse.
The sale of Terasen to Kinder Morgan Inc. has set off a wave of public concern reflected in 6,000 letters from B.C. residents to the British Columbia Utilities Commission. All the letters oppose the deal. So far the BCUC has refused to hold any public hearings on the sale.
Kinder Morgan is plagued with problems. It has a poor record when it comes to environmental protection and health and safety of workers. It also has a debt management problem, according to professor Laurence Booth of the University of Toronto’s Rotman School of Management. Kinder Morgan has a financial structure similar to how Enron was run before its implosion, he said. Kinder Morgan’s founder, Richard Kinder, is a former president of Enron.
Booth quotes a report from BMO-Nesbitt Burns that states, “An Enron-type problem could hit KMI” with a chance that Terasen revenue would be used to support Kinder Morgan’s faulty structure.
Terasen’s sale would not even have been possible if the B.C. Liberals’ hadn’t changed legislation around the original privatization of public gas infrastructure. They increased the number of non-B.C. directors allowed at a company, did away with the 20 per cent limit on foreign ownership and eliminated the rule that the company headquarters had to be in B.C. Terasen lobbied the Liberals for these changes and donated $50,000 to the party.
The BCUC should be telling the B.C. Liberals to slam the brakes on the deal until the commission can hold public hearings. Not only are NAFTA rules a concern (http://www.cupe.ca/www/s4316233dd7dc5/17342), but the public good should come before the profits of a financially troubled corporation. Terasen has never come close to being a leader on worker health and safety or environmental issues, but compared to Kinder Morgan they look like the better option.