BCUC OK’s Hydro rate increase

Turn off the lights and unplug the phone … your hydro rates are going up.

Despite a directive from the NDP to freeze hydro rates, the British Columbia Utilities Commission has approved a BC Hydro rate increase of three per cent April 1. It also officially approved rate hikes of four per cent and 3.5 per cent that have already been applied. Since April 1, 2016, Hydro rates have jumped 10.5 per cent.

The 2017 and 2018 increases were implemented as interim pending the BCUC’s public review process, and are now approved as final. BC Hydro filed an amended application on November 8, 2017, reducing its requested rate increase for April 1, 2018 from three per cent to zero after receiving a government mandate letter, in which the Minister of Energy, Mines and Petroleum Resources outlined an expectation that BC Hydro will work with the ministry to “freeze BC Hydro rates…”

The BCUC did not approve BC Hydro’s amended application for a zero per increase. The BCUC panel reviewing the matter acknowledged that these increases are significant, and are the maximum allowable under the provincial government’s direction No. 7 to the BCUC. The panel ultimately found there to be insufficient regulatory justification to warrant lower increases because even these increases do not fully recover BC Hydro’s forecast revenue requirement, which includes items such as operating costs, new capital expenditures, and carrying costs on capital expenditures. Last fall the provincial government approved proceeding with the Site C dam project, now estimated to cost $10.7 billion.

Minister of Energy, Mines and Petroleum Resources Michelle Mungall is not happy with the decision.

“I am disappointed the BCUC turned down BC Hydro’s request for a one-year rate freeze, and instead, approved the previous government’s rate increase,” she said. “We completely understand the affordability crisis so many families face, and will be taking action quickly to address the need to reduce electricity costs for those who need it most.”

She said government will work with BC Hydro and customer groups on a lifeline rate program. The program could mean that people who have demonstrated need would have access to a lower rate for their electricity.

In addition, starting in May, BC Hydro residential customers who find themselves in an emergency – such as loss of employment, unanticipated medical expenses or pending eviction for example – will be eligible for a grant toward their outstanding BC Hydro bill. The grant is up to $600 and does not need to be repaid.

“Last month, BC Hydro announced enhanced measures to help customers manage higher winter bills, including a winter payment plan, giving customers the option to spread bill payments over a six-month period, and increased funding for low-income energy-conservation programs,” she said. “To lower electricity costs for B.C. businesses and industries, we are phasing out the provincial sales tax (PST) on electricity. Following the 50 per cent reduction that started on Jan. 1, 2018, government will completely eliminate the PST on non-residential electricity on April 1, 2019. Residential use of electricity is already PST-exempt.

She added government will also undertake a comprehensive review of BC Hydro. The review will identify changes and cost savings to keep rates low, while ensuring BC Hydro has the resources it needs to continue to provide clean, safe and reliable electricity.

“We respect the BCUC’s work and diligence as British Columbians’ independent regulator,” she said. “Although disappointed with its decision, we understand the commission’s concerns and will work to address them, while implementing ways to make life more affordable for B.C. families.”