B.C. Hydro rates set to go up 8.1 per cent over the next five years
The B.C. government will be handing over more power to the B.C. Utilities Commission (BCUC) to regulate BC Hydro.
Energy Minister Michelle Mungall announced on Thursday that the BCUC would have greater independent oversight to “take the politics out of decisions.”
The province commissioned a full review of the Crown corporation and released Phase 1 of that review on Thursday. As part of the review, the government has committed to controlling electricity rates.
Pending BCUC approval, BC Hydro customers are looking at a 1.8 per cent rate increase effective April 1 and another 0.7 per cent increase on April 1, 2020. This is part of a projected 8.1 per cent increase over the next five years.
The provincial government promised to freeze rates in the last election campaign, but the BCUC rejected the idea.
According to the provincial government, electricity rates have risen by more than 70 per cent in the past 10 years.
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“The previous government made choices that put their own interests ahead of what’s best for the province and BC Hydro customers,” Mungall said.
“Following this review, it’s our government’s job to fix what’s broken, put BC Hydro onto a sustainable path and make sure rates stay as affordable as possible for customers.”
As part of the review, the government released a report on Wednesday that found BC Hydro ratepayers are expected to overpay by billions of dollars for electricity it doesn’t need, due to costly and unnecessary contracts with independent power producers (IPP).
Mungall commissioned the independent report, written by former B.C. Treasury Board director Ken Davidson, which pinned the blame for the power deals on the previous BC Liberal government.
“The annual impact of this surplus energy to BC Hydro ratepayers is estimated as $808 million per year or ~$200 per year per residential ratepayer, which is equivalent to $4,000 per residential ratepayer over 20 years,” the report said.
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“The $16.2-billion estimate is believed to be conservative.”
The report concluded BC Hydro bought too much energy, the wrong type of energy and paid too much for it.
One of the changes coming is the province will be indefinitely suspending Hydro’s Standing Offer Program. The province will be engaging with First Nations to discuss the extent to which the suspension may affect the economic interests of individual Indigenous communities.
The province will be paying off $1.1 billion in deferred costs in response to the Phase 1 review. There will be new legislation introduced that gives BCUC the ability to make decisions on rate increases, deferral accounts and capital projects.
“BC Hydro is committed to working with our customers, Indigenous peoples, stakeholders, the BCUC and government as we build on the work of the review to limit rate increases, enhance regulatory oversight and support the province in its social, economic and environmental priorities,” BC Hydro President Chris O’Riley said.
— With files from Simon Little
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