BC Hydro applies for 4% interim rate increase
Hydro says rate hike is an interim request while it reviews declining mining and LNG prospects
BC Hydro has applied to the B.C. Utilities Commission for an interim rate increase of four per cent for fiscal 2017, effective April 1.
The requested hike is equivalent to an extra $4 per month per residential customer according to Hydro CEO Jessica McDonald.
McDonald says the increase is in line with the utilities' 10-year plan, but the application is for an interim increase while Hydro buys time to rework its forecasts in light of the decline mining sector and changes to the LNG landscape.
"The changes, that we need a little bit of time to rework our forecast around, are due primarily to changes in the mining sector, said McDonald.
"As you know there's been a continued decline in commodity prices. At the same time, over the last couple of weeks, you've heard a couple of LNG companies make announcements about a shift in their decisions, and so we'll incorporate those changes at the same time."
Yesterday AltaGas announced it was shelving its Douglas Channel liquified natural gas project near Kitimat due to tanking gas prices. Three weeks ago Shell Canada announced it was postponing a final investment decision on the giant LNG Canada project, also near Kitimat, until the end of the year.
The B.C. mining sector is in line to get a boost through a recently announced provincial program that would allow mining companies to defer electricity costs, but McDonald says that will have no impact on the proposed customer rate hike.
The mining industry is a large consumer of hydro energy, as the LNG industry will be, when and if it gets off the ground in B.C.
BC Hydro's rate increases are capped at four per cent in 2017, 3.5 per cent in 2018, and three per cent in 2019.
Hydro says it expects to file a full three-year plan with the BC Utilities Commission within the next few months.