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

Controversial Langley condo developer fights extradition on U.S. fraud charge

Mark Chandler’s lawyer argued before the B.C. Court of Appeal Friday to keep him in Canada.

Snowfall warning: 5-10 cm expected in Lower Mainland

The snowfall will start Tuesday and carry on into the evening, before tapering off Wednesday

Snowfall warning issued for Surrey, Langley

Environment Canada warns to ‘be on the lookout for adverse weather conditions and take necessary safety precautions’

Langley playing host to B.C.’s best high school wrestlers

A pair of champion women wrestlers share stories and experience with younger generation.

VIDEO: Winterhawks end Giants winning streak at seven

Playing on home ice in Langley, Vancouver’s G-Men fell 5-3 during a Family Day game against Portland.

‘Our entire municipality is heartbroken’: Seven children die in Halifax house fire

A man and woman remained in hospital Tuesday afternoon, the man with life-threatening injuries

Okanagan ski resort officials displeased with Family Day roll-out

From one peak of the Okanagan to the other, resort officials have raised concerns

B.C. high school robotics team ranked first in the world for programming

The Surrey team was also named tournament finalists at VEX Robotics Competition on Feb. 1

Man shot dead in front of Kamloops hotel may be case of mistaken identity: RCMP

Rex Gill, 44, was not previously known to Kamloops police unlike second shooting victim

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

Payless to close 248 Canadian stores, saying it’s ‘ill-equipped’ for market

The company will begin closing stores at the end of March

Make sure measles shots up to date, Public Health Agency says

Measles causes high fever, coughing, sneezing and a widespread painful rash

Super snow moon set to rise across B.C.

It is the biggest and brightest moon of the year

5 to start your day

IHIT investing South Surrey homicide, B.C.’s budget set to focus on climate change, poverty and more

Most Read