The proposed interim one-year rate increase will replace revenue lost by the slumping resource sector
VICTORIA—British Columbia’s slumping mining industry and delays facing development of a liquefied natural gas industry have prompted BC Hydro to update its forecasts for electricity demand, which includes seeking approval to increase rates.
BC Hydro CEO Jessica McDonald said Friday the utility is applying for an interim one-year rate increase that would add about $4 a month to residential power bills.
The request for a four-per-cent increase has been filed with the B.C. Utilities Commission, the government’s independent regulatory agency. It would go into effect April 1, 2017, and is part of the Crown corporation’s 10-year rate plan announced three years ago, McDonald said at a news conference.
Recent events in the mining and LNG sectors prompted the utility to seek extra time to update its forecasts before making its formal three-year rate application later this summer, she said.
“As you know, there’s been a continued decline in commodity prices. But this, we anticipate, will be counteracted by the program that government has recently announced.”
Earlier this year, the Liberal government said it will allow mining companies to defer portions of their hydro bills, paying only interest during periods when commodity prices are low and repaying the deferred portion, with interest, when prices recover.
The province’s LNG industry remains in the planning stages. The government sees the industry as a generational opportunity that could create up to 100,000 jobs.
At least two proposed multibillion-dollar LNG proposals, both in northwest B.C., remain on hold as the companies await government approvals and improving market conditions.
BC Hydro’s 10-year rate plan, announced by the government in 2013, called for set rate increases amounting to 28 per cent over five years, with the utilities commission setting the rates for the remaining five years.
NDP hydro critic Adrian Dix said the rate hike is a hidden tax increase.
McDonald said the utility still anticipates long-term increases in electricity demand as B.C.’s population is estimated to increase by almost 40 per cent over the next 20 years.