Utilities surcharge to underwrite B.C.'s clean energy fund

British Columbia consumers can expect to feel the first financial sting from the provincial government's green plan in the very near future.

British Columbia consumers will soon feel the first financial sting from the provincial government's green plan.

Energy Minister Richard Neufeld confirmed Wednesday that the B.C. government plans to slap a surcharge on all public utilities to build its "Innovative Clean Energy Fund," promised as part of an ambitious plan to cut greenhouse gases laid out in last week's throne speech.

"I can tell you it would be less than one per cent … on domestic consumer utility bills," Neufeld said in an interview, noting it will likely require approval from the B.C. Utilities Commission.

Neufeld said the move will affect electricity producers BC Hydro and Fortis, as well as natural gas providers including Terasen Gas and Pacific Northern Gas.

He said his ministry is talking to all these utilities about "how we can move this forward to get enough from their revenue to cover the $25 million a year."

In the Feb. 13 throne speech, the government promised to cut current levels of greenhouse gas emissions in British Columbia by one third by 2020. It also promised to establish the Innovative Clean Energy Fund to "encourage the commercialization of alternative energy solutions and new solutions for clean remote energy."

Surcharge a surprise

The news that a utility surcharge would be used to build the fund was revealed on Tuesday when B.C. Finance Minister Carole Taylor met reporters before delivering her provincial budget.

"The fund was mentioned in the throne speech. It will be funded —it will be in the energy plan when it is released," Taylor said. "And the minister is currently looking at the notion of a small surcharge on all public utilities."

Neufeld is expected to deliver the energy plan within the next few weeks.

Critics say there is little to reflect the Liberal government's ambitious plan to combat global warming in the 2007 budget.

But Taylor countered that much work is needed on the specifics of the climate change plan before she starts allocating tax dollars. That will be the role of a new climate action team, to be headed by Premier Gordon Campbell.

Campbell said the provincial budget shows a commitment to massive action on climate change, rejecting charges the green plan has no funding.

"In this budget about $103 million has been aside specifically to support the climate change initiatives that we have in place," the premier told the Vancouver Board of Trade.

"Those are new dollars that weren't there before, but there's a substantial amount of resources that are already in place. This is not something that is new to the government."

Call it a user fee: opposition

Opposition NDP energy critic John Horgan said it is a stretch to announce a fund in the throne speech that people would assume was a government initiative, only to find it will be paid for by consumers.

"There is not a thing wrong with having a fund for innovative, clean energy now and into the future," he said. "But if you are going to make it a user fee, then call it a user fee."

He said the public assumes the Liberal government recognizes the climate change challenges and the need for clean, green energy.

"Why wouldn't you fund that from taxpayers' dollars rather than ratepayers?"

Horgan said encouraging new public behaviour through the tax system is not as controversial as many people assume.

"But if the government says on one day that it is providing a fund, and on the next day we find out it's a user fee, I think the public is going to react harshly to that."

Horgan wonders what sort of reception the plan will get from the province's utilities watchdog.

"The [utilities] commission is not receptive to whims of the government. We found that out with the Alcan deal and I think we'd find that out with the surcharge as well," he said.