Energy Minister Bill Bennett and BC Hydro CEO Charles Reid announced a 28 per cent electricity rate hike over five years, with a nine per cent jump coming April 1, 2014.
In a press conference in Victoria this morning, Bennett and Reid said the rate hikes were part of a 10-year plan to keep rates as low as possible, while still allowing BC Hydro to invest in infrastructure and future power projects.
"The goal of the 10-year-plan is to keep rates predictable," Bennett said in a phone-in conference.
"We believe it's a balanced and responsible plan. It keeps rate increases as low as possible while BC Hydro makes investments in the system."
BC Hydro's proposed rate increase:
- Year 1: 9 per cent
- Year 2: 6 per cent
- Year 3: 4 per cent
- Year 4: 3.5 per cent
- Year 5: 3 per cent
Note: Each year's increase is a percentage of the previous year's rates.
Government must get the approval of the B.C. Utilities Commission (BCUC) for the first five rate increases, which start at nine per cent in the first year and compound to 28 per cent by 2019.
The BCUC will then be responsible for setting any subsequent rate increases in the final five years of the plan.
Bennett said a nine per cent increase amounts to about $8 more per month for the average residential customer and $20 for a small industrial or commercial user.
But, he said, it could mean around $139,000 per month more for the province's heaviest industrial users.
Bennett claimed the hikes were down from previous proposals, including a document leaked in August which described a 26 per cent increase by 2016.
"We just decided that an increase of that magnitude was not acceptable," Bennett said.
BC Hydro CEO Charles Reid said users could mitigate the higher electricity costs by conserving more power, but noted B.C. consumers are already getting a fairly good deal.
"Our rates are still among the lowest in North America," said Reid, citing a 2013 Hydro Quebec study of electricity rates in major cities.
The study determined Vancouver customers pay 8.91 cents per kilowatt-hour of electricity consumed, while neighbours in Toronto pay 12.48 cents per kilowatt-hour.
According to the study, Calgarians pay 14.81 cents per kilowatt-hour. Only Montreal had a lower rate, at 6.87 cents per kilowatt-hour.
"If you were in Calgary you'd be paying, you know, instead of $80 or $90 a month, you'd be paying $150 a month,” said Reid.