BC Hydro applies to lower electricity rates next year, but rates still going up long-term
Utility has asked to reduce rates by 1 per cent in 2020
The province says BC Hydro customers could see their bills go down for the first time in decades next year, but overall, rates are still rising over the next several years as previously forecast.
The province announced a five-year rate hike in February, after a report found customers would be on the hook for $16 billion over the next two decades. It was set to be an eight per cent hike.
On Friday, the province said it has sent a new plan with decreased rates to the B.C. Utilities Commission (BCUC) for approval.
The new proposal would include a one per cent rate reduction as of April 2020. It also includes an increase of 2.7 per cent in 2021, a decrease of 0.3 per cent in 2022 and an increase of 3 per cent in 2023
The overall hike over the next five, yo-yoing years would be 6.2 per cent instead of eight per cent.
The proposal needs to be greenlit by the BCUC, which is independent of the government, before plans could come into effect.
A statement from the Ministry of Energy, Mines and Petroleum Resources said Friday the new application is based on its audited fiscal 2019 financial results and the latest financial forecast.
The change reflects higher-than-anticipated income from BC Hydro's trading subsidiary, Powerex, and lower than expected forecasted debt financing costs and purchases from independent power producers, it says.
"The reality at BC Hydro is that the rates and the revenue have to reflect the expenses in any given year and if we're able to find savings in any given year, we want to pass that on to British Columbians," Energy Minister Michelle Mungall said in a phone call Friday.
In February, B.C.'s auditor general Carol Bellringer also said BC Hydro had amassed $5.5 billion in 29 deferred expense accounts, some of which are scheduled to be repaid over 40 years.
When Mungall announced the eight per cent hike over five years in February, she said the NDP government would write down $1.1 billion in deferred expense costs on BC Hydro's books to reduce the amount of rate increases.
With files from the Canadian Press