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

Abbotsford Hospital auxiliary donates biomedical freezer to forensic nursing

Donation, valued at over $14,000, preserves medical evidence

Abbotsford Community Services announces name change

50-year-old non-profit agency now called Archway Community Services

Vancouver Canucks playing pre-season game in Abbotsford

Canucks hosting Ottawa Senators on Monday, Sept. 23

Abbotsford water polo talent earns national gold

16U athletes Sarah Portas and Annika Reinfjell help lead Fraser Valley to first

Harrison Hot Springs to consider single-use plastics ban

Village staff will come back to council with a report on what a possible ban could look like

VIDEO: Trans Mountain expansion project gets green light, again

Prime Minister Justin Trudeau announced the decision in Ottawa on Tuesday afternoon

MPs hear retired B.C. nurse’s petition to change compensation for fatal medical errors

Teri McGrath wants provinces to implement no-fault system for medical errors

Horgan says he’ll still defend B.C. coast after second Trans Mountain approval

Meanwhile, one B.C. First Nation has announced plans for a legal challenge

Metro Vancouver’s air quality could be the worst yet this wildfire season

As wildfire season approached, Metro Vancouver experts predict the air will be an issue for many

Demonstrators on either side of Trans Mountain debate clash in Vancouver

Crowd heard from member of Indigenous-led coalition that hopes to buy 51% of expansion project

Update: Multiple fires along the railway tracks in Pitt Meadows

CP rail has closed tracks while firefighters work

Grieving B.C. mom hopes Facebook message leads to new investigation into son’s Surrey homicide

Criminal Justice Branch didn’t lay charges, concluding no substantial likelihood of murder or manslaughter conviction

B.C.’s measles vaccination program gains traction in May

More than 15,000 doses of the MMR vaccine has been administered across the province

B.C. farmers concerned Agricultural Land Reserve changes choking their livelihood

Dozens voice concerns at special meeting hosted on Vancouver Island

Most Read