BC Hydro rates are going up more than seven percent this year, according to the B.C. Utilities Commission – but the provincial NDP says a significant part of the increase is to cover the utility’s growing debt.
The rate hike would have been lower, but the utilities commission made Hydro double the amount of money it was setting aside to cover $2 billion in deferred debt, NDP Energy critic John Horgan said.
Horgan also said that each year, the provincial government has been collecting hundreds of millions of dollars in dividends on profits that critics argue don’t really exist.
"The deferral accounts are projected to grow from $2.2 billion this year to as high as $5 billion by 2017," Horgan told CBC News.
Horgan said that means electricity rates will continue to rise.
"Not just do we have to meet the cost of new energy supply, new capital projects, but we also have to pay off this debt," he said.
In October, B.C. Auditor General John Doyle revealed that Hydro has been showing profits by deferring debt that it has steadily incurred in its operations.
Doyle acknowledged that the deferral had become an accepted accounting practice but noted that sooner or later, BC Hydro customers would have to pay the debt off.
Energy Minister Rich Coleman disagreed with Doyle’s view, saying the utility’s investments would pay the debt down.
Hydro originally asked for a rate hike of nearly 30 per cent over three years before Premier Christy Clark stopped the plan, prompting the utility to cut hundreds of jobs instead.
The utility commission announced Thursday that BC Hydro rate would jump 3.91 per cent April, but said it was adding a second 2.5 per cent surcharge as what it called a "Deferral Account Rate Rider."
"With compounding, the net annual impact for customers is 7.07 per cent," the government said in a news release about the utility commission ruling.