Hydro rate increase small

BC Hydro's rate increase 1.44 per cent next year, despite dam refits and private power contracts

  • May. 25, 2012 11:00 a.m.

Tom Fletcher

Black Press

Despite controversial private power contracts and approval of two pricy dam refits, BC Hydro’s rate increase will be only 1.44 per cent next year, Energy Minister Rich Coleman announced Tuesday.

Coleman said the B.C. government is instructing the B.C. Utilities Commission (BCUC) to limit rate increases to a total of 17 per cent for the three-year period ending April 1, 2014. With rates up 7.1 per cent since April of this year and last year’s eight-per-cent hike, the 1.44 per cent increase for next year is to meet a political commitment made by Coleman and Premier Christy Clark last year to reduce planned rate increases by half.

The smallest rate increase in years is to take effect April 1, 2013, just weeks before the next provincial election. And the latest government instruction means a BCUC public hearing on the latest rates won’t proceed.

Coleman said in an interview the directed increase was not done for election purposes, but because it was the simplest way to proceed. A “negotiated settlement” with major ratepayer groups means a BCUC hearing that could run for months isn’t necessary, he said.

NDP energy critic John Horgan said Tuesday the government’s move is the latest in a series of political interventions into BC Hydro policy. It forced the utility to buy private power on expensive long-term contracts, it imposed the smart meter program and moved ahead on the Site C dam on the Peace River, all without review by the BCUC to see if they are in the best interests of ratepayers, he said.

“This is a Crown corporation, the envy of North America, and these guys have run it into the ditch,” Horgan said.

Coleman launched a review of BC Hydro last year, after Clark spoke out against the prospect of a 50 per cent increase in hydro rates expected over five years.

The review by deputy ministers said reducing BC Hydro staff and in-house engineering, along with other cost-saving measures, would meet the government’s target of keeping annual rate increases below four per cent.

But the BCUC’s rate hearings pushed the increase for the current year up to 7.1 per cent, to increase repayment of debt that has been stacked up in recent years. Auditor General John Doyle issued a report last year that said the government was taking annual dividends from BC Hydro that were not justified by its earnings, and the utility was increasing deferred debt as a result.

Coleman announced Tuesday that the province was able to reach its rate goal by forgoing $75 million in dividends over three years.