BRITISH Columbians will pay less for electricity next spring if the B.C. Utilities Commission (BCUC) approves BC Hydro’s request for a decrease in rates.
“For the past two years, our government has been focused on making sure BC Hydro works for people again,” said Michelle Mungall, Minister of Energy, Mines and Petroleum Resources. “I am thrilled that BC Hydro is now able to apply for a rate reduction for the first time in decades. If approved by our independent regulator, lower rates would make life better and more affordable for British Columbians.”
BC Hydro’s application to the BCUC is based on its audited fiscal 2019 financial results and latest financial forecast that reflect, among other things, higher-than-anticipated income from its trading subsidiary Powerex, lower-than-anticipated forecast debt financing costs and lower-than-anticipated purchases from independent power producers (IPPs).
“As a result of our updated financial forecast, we’re in the unique position to apply for a rate decrease for our customers that would start on April 1, 2020, if approved by the B.C. Utilities Commission,” said Chris O’Riley, President and Chief Operating Officer, BC Hydro. “We’re committed to continue to work with government and the B.C. Utilities Commission to keep rates affordable while ensuring we continue to provide safe, reliable power to the province.”
The proposed lower rates build on the results of Phase 1 of government’s comprehensive review of BC Hydro, which was completed in February 2019. Measures flowing from the review include actions to keep electricity rates affordable for customers by cutting costs – including by indefinitely suspending the Standing Offer Program for IPPs – and expanding independent oversight of BC Hydro by the BCUC.
The BCUC is expected make a final decision on BC Hydro’s 2019-20 and 2020-21 rates early in 2020.
How a rate decrease would look
On August 22, 2019, BC Hydro submitted a request for a rate reduction of 1% starting April 2020 in an update to its Fiscal 2020 to Fiscal 2021 Revenue Requirements Application with the BC Utilities Commission.
* As part of BC Hydro’s fiscal 2020-21 revenue requirements application the BCUC has already approved an interim net bill increase of 1.8% for 2019-20, which came into effect April 1, 2019.
* If approved, the net bill impacts of the new rates forecast will be:
– April 2020: decrease of 1%
– April 2021: increase of 2.7%
– April 2022: decrease of 0.3%
– April 2023: increase of 3%
* If approved, the cumulative bill increase over the next five years is estimated to be 6.2%. This is:
– 23% lower than the 8.1% cumulative increase announced in February 2019 as part of the results of Phase 1 of government’s review of BC Hydro; and
– 55% lower than the 13.7% cumulative increase for the same period under the previous government’s 10-year rates plan.
* Lower rates also support the government’s goals under CleanBC to encourage the switch from fossil fuels to clean, renewable electricity in vehicles, homes and buildings, and industries.
In July 2019, government launched Phase 2 of the BC Hydro review with the objective of creating a strategy, for the benefit of British Columbians, for BC Hydro to continue to provide its customers with clean energy at competitive rates through the continuing evolution of BC Hydro in response to changes in climate, consumer demand, technology and B.C.’s commitment to reconciliation with Indigenous Nations. Phase 2 will continue to maintain the affordability of BC Hydro rates and the independence of the BCUC.
For a graph of BC Hydro’s rates forecast, visit: https://news.gov.bc.ca/files/BCH_Rates_Forecast.jpg
For information on BC Hydro’s Fiscal 2020 to Fiscal 2021 Revenue Requirements Application, visit: https://www.bcuc.com/
To read the final report on Phase 1 of the BC Hydro review, visit:
To learn about Phase 2 of the BC Hydro review, visit: