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

SAR leads helicopter Family Day rescue to retrieve injured climber

Pilot had to hover over waterfall as rescue team lifted two people to safety

Kitimat resident is Conservative choice for fall election

Claire Rattée is a former Kitimat councillor

Canadian Snowbirds may return to Terrace after 20 years

Terrace would kick off three B.C. Snowbird performances in 2020 if approved

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

Growth projected stronger in 2020, Finance Minister Carole James says

City of Terrace reacts to $8 million provincial infrastructure grant

This is the largest grant ever received by the city, mayor says

‘Riya was a dreamer’: Mother of slain 11-year-old Ontario girl heartbroken

Her father, Roopesh Rajkumar, 41, was arrested some 130 kilometres away

CRTC report finds ‘misleading, aggressive’ sales tactics used by telecom industry

Report recommends measures to make a fairer situation for consumers

Trudeau takes personal hit amid SNC-Lavalin controversy: poll

Overall, 41 per cent of respondents believed the prime minister had done something wrong in the affair

B.C. photographer captures otters on ice

A Langley photographer was at the right place at the right time on the Fraser River

Do you live with your partner? More and more Canadians don’t

Statistics Canada shows fewer couples live together than did a decade ago

B.C. child killer denied mandatory outings from psychiatric hospital

The B.C. Review Board decision kept things status quo for Allan Schoenborn

Searchers return to avalanche-prone peak in Vancouver to look for snowshoer

North Shore Rescue, Canadian Avalanche Rescue Dog teams and personnel will be on Mt. Seymour

Market volatility, mortgages loom over upcoming earnings of Canada’s big banks

Central bank interest hikes have padded the banks’ net interest margins

Hearings into SNC-Lavalin affair start today, but not with Wilson-Raybould

She has repeatedly cited solicitor-client privilege to refuse all comment

Most Read