Linemen install new power infrastructure in downtown Victoria. (Tom Fletcher/Black Press)

B.C. Hydro’s $5.5 billion in deferred debt puts pressure on rates

Auditor General says 29 accounts a complicated system

B.C. Hydro customers will have to pay off $5.5 billion in operating debt that has been pushed into the future to keep rates from spiking, and it’s not yet clear how the NDP government is going to tackle that.

Energy Minister Michelle Mungall’s initial effort to freeze rates was blocked by regulators, requiring a 3.5 per cent increase in 2017. Last year’s increase was another three per cent, similar to what the B.C. Liberal government had scheduled in its 10-year rate plan.

RELATED: B.C. Hydro freeze refused, rates go up 3% for 2018

RELATED: NDP looks for ways to rein in B.C. Hydro rates

In June of 2018, Mungall announced separate reviews of Hydro’s capital and operating debt, with outside experts to find a way forward, after the NDP government reluctantly decided to complete the $10 billion Site C project.

A key goal for Mungall is to return rate-setting to the B.C. Utilities Commission, after a series of directives from the previous government that drew accusations of political interference to make B.C. Hydro’s financial picture look better than it is.

On Wednesday, B.C. Auditor General Carol Bellringer released the latest report on B.C. Hydro’s deferred operating debt, which is separate from the billions in capital debt racked up for project such as Site C on the Peace River, the John Hart Dam reconstruction on Vancouver Island and the Ruskin dam and powerhouse rebuild in the Fraser Valley.

Deferring the bills of major storms and other unexpected spikes in operating costs is normal practice for utilities, Bellringer says. But B.C. Hydro’s network of 29 accounts is unusually complicated, with “rate smoothing” effects on future rates unclear.

In their response to Bellringer’s report, the ministry and B.C. Hydro emphasize that current customer rates are already on track to pay off 25 of the 29 deferral accounts.

Three that are not are the “customer crisis fund” account, the “Site C regulatory account” and the “rate smoothing regulatory account.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

‘Priceless’ hat stolen from Indigenous art store in Campbell River during break-in

Ernie Smith, co-owner of Awatin Aboriginal Art, looking for help in recovering stolen hat

BC Hydro increasing flow down Elk Falls to assist steelhead migration and spawning

Water flows within Elk Falls Canyon are increasing today to assist steelhead… Continue reading

B.C. BUDGET: Surplus $374 million after bailouts of BC Hydro, ICBC

Growth projected stronger in 2020, Finance Minister Carole James says

InspireHealth workshop in Campbell River supports those with cancer

The free event takes place at Berwick by the Sea on Feb. 2

Habitat for Humanity North Island wants to keep momentum going

Organization asks City of Campbell River for more land to build homes for young families

VIDEO: 8 things you need to know about the 2019 B.C. budget

Surplus of $247 million with spending on children, affordability and infrastructure

‘Bullet missed me by an inch’: Man recounts friend’s killing at Kamloops hotel

Penticton man witnessed Summerland resident Rex Gill’s murder in Kamloops

B.C. BUDGET: Income assistance raise still leaves many below poverty line

$50 per month increase included in funding for poverty and homelessness reduction

B.C. BUDGET: Indigenous communities promised billions from gambling

Extended family caregiver pay up 75 per cent to keep kids with relatives

B.C. BUDGET: New benefit increases family tax credits up to 96 per cent

BC Child Opportunity Benefit part of province’s efforts to reduce child poverty

B.C. BUDGET: Carbon tax boosts low-income credits, electric vehicle subsidies

Homeowners can get up to $14,000 for heating, insulation upgrades

B.C. man survives heart attack thanks to Facebook

A Princeton man suffered a heart attack while at an isolated property with no cell service

B.C. man sues Maxime Bernier’s People’s Party over trademark

Satinder Dhillon filed application for trademark same day Maxime Bernier announced the new party

New trial ordered over banning whales, dolphins at Vancouver aquarium

Park board’s appeal reverses previous decision that found it had no right to implement a ban

Most Read