BC Politics

Promise Denied with No Hydro Rate Freeze for BC

NDP government doesn’t like BCUC’s rejection of a rate freeze, but chooses to respect its independence.

By Andrew MacLeod 2 Mar 2018 |

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

British Columbians won’t get a promised break on BC Hydro rates following a British Columbia Utilities Commission ruling that nixes the government’s plan.

“Very disappointed today, obviously,” said Energy, Mines and Petroleum Resources Minister Michelle Mungall. The BCUC had approved the former Liberal government’s rate increase instead of approving the NDP’s freeze, she said.

“I know this news is going to be quite disappointing for a lot of British Columbians,” Mungall said. “[The BCUC panel] were very clear in a nutshell that this is a mess, there is a mess at BC Hydro, it needs to be cleaned up, and I hear that.”

Mungall announced in early November that the government was working with BC Hydro to cancel the three per cent rate increase that had been planned for April 1. A freeze would save British Columbians about $150 million, she had said.

BC Hydro then amended its application for the increase that was already in front of the B.C. Utilities Commission to instead ask for a zero per cent increase.

On Thursday the BCUC released its decision. “BC Hydro’s Amended Application is not approved and rates are set at the amount requested in the original application,” it said. “The Panel finds that there is insufficient regulatory justification to approve the zero per cent rate increase in the Amended Application.”

The panel considered the recent history of rate increases, the risk that a freeze might add more pressure to raise rates in the future, and concerns about further growing BC Hydro’s deferral and regulatory accounts, the decision said.

The government could have ordered the BCUC to allow the freeze, but chose not to, Mungall said. “We thought that was an inappropriate way to start our relationship with this independent regulator. Rather, we want to respect their role in making sure that the public’s interest is met when it comes to our utilities, and that’s exactly what they did.”

BC Liberal leader Andrew Wilkinson said in an emailed statement that the NDP government had made a “reckless promise” it couldn’t keep.

“John Horgan and the NDP made a firm commitment to British Columbians that hydro bills would be frozen,” he said. “Today, we have learned that rates are in fact going up. The same NDP that found it so easy to make big promises during an election campaign finds itself, once again, unable to deliver on them when in government.”

BC Green Party leader Andrew Weaver said he was glad the government is respecting the BCUC’s independence. “BCUC makes its decisions based on evidence and in what is the best interests of ratepayers,” he said in an emailed statement. “Respect for proper process is essential for public trust in government and for the integrity of our democracy.”

In its arguments for the rate freeze, BC Hydro cited Premier John Horgan’s mandate letter to Mungall and said the BCUC in making its decision should give weight to the fact the freeze was government policy.

While the BCUC was deliberating, Horgan said publicly that targeting help to people in need might be better than providing a rate freeze to everyone, which caused a delay in the regulator’s proceedings while it heard arguments from intervenors on the premier’s comments.

“I am now more convinced than ever that the better course of action on affordability is not blanket reductions or freezes, but targeted to those who can best benefit from relief in this area,” Horgan said Jan. 16.

“For those who are seeing a significant increase in their hydro bills, if they can’t find power-smart ways to reduce those costs, then perhaps relief from the utility or from the province is the way to do that, and I’ve directed the [BC Hydro] board chair to take a look at that.”

Mungall said today that the government will work towards introducing lifeline rates for low-income BC Hydro customers, and starting in May will provide crisis grants of up to $600 to people in an emergency, such as a job loss, pending eviction or unanticipated medical bills.

The BCUC’s ruling was disappointing, she said, but “this does not mean we’re not going to ensure that life is affordable for British Columbians when it comes to hydro rates.”  [Tyee]

Read more: Energy, Politics, BC Politics

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