BC Hydro applies for rare cut in electricity rates next year

Province wrote off $1.1 billion debt to help reverse rate increase

BC Hydro has applied for a rare rate decrease to take effect next spring — before the cost of hydroelectricity to B.C. consumers is forecast to climb again.

Documents released Friday by BC Hydro project a rate decrease of just under one per cent, an abrupt change from an upward trend in recent years driven by debt piling up to upgrade aging facilities and build the Site C dam on the Peace River.

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The rate decrease is subject to approval by the B.C. Utilities Commission and would take effect on April 1, 2020. It would be followed by a 3.5 per cent rate increase a year later, according to the latest rates forecast.

BC Hydro CEO Chris O’Riley cited lower that forecast debt costs, stronger income from Powerex, the utility’s power trading subsidiary, and reduced costs from purchasing independent power.

The B.C. NDP government tried to freeze rates in 2018, but the BCUC rejected its application. Since then, it has suspended independent power contract purchases and, in Finance Minister Carole James’ latest budget, wrote off $1.1 billion of BC Hydro’s deferred debt by transferring it to the provincial debt.

“I’m thrilled that BC Hydro is now able to apply for a rate reduction for the first time in decades,” said Energy Minister Michelle Mungall, whose term got off to a rocky start when she promised a rate freeze and couldn’t deliver.

The NDP government moved to suspend BC Hydro’s “standing offer program” for independent power projects, after years of characterizing independent power as a key driver in rising costs. Exceptions would be made for Indigenous partnerships to develop power in remote regions that are off the BC Hydro grid, Mungall said at the time.

The NDP government produced a controversial report in February, entitled Zapped, that said former premier Gordon Campbell’s 2002 push into contracted run-of-river, wind and biomass power will cost the Crown corporation $16 billion over the next 20 years.

B.C. Liberal energy critic Greg Kyllo said the NDP’s “assault on clean energy producers” was a move to protect the unionized monopoly of BC Hydro production.

“British Columbia has been a leader in green tech and clean energy, and the advances we have seen over the past decade have been thanks to entrepreneurs, private businesses and First Nations investing in the future, certainly not government bureaucrats,” Kyllo said.

© Kamloops This Week

 


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