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

One-day-a-year open house for Okanagan raptor rehab centre on May 5

The 31st annual open house for SORCO Raptor Rehab Centre is May 5

Witnesses say body found at Kelowna’s Gyro Beach

Police tape is blocking part of the beach and several RCMp officers are on scene.

Okanagan-Shuswap weather: A sunny Easter Sunday

Temperatures will peak at approximately 20C region-wide

Children gather for Easter festival in Summerland

Fourth annual Easter Egg-stravaganza included activities and egg hunt

Summerland student examines effects of sound

Science fair project will go to national competition in New Brunswick

‘No answers:’ Canadians react to Sri Lanka bombings that killed hundreds

The co-ordinated bomb attacks killed at least 207 people and injured 450 more on Easter Sunday

Pets still missing after Peachland home fire

Two Pomeranians and two cats are missing after fire

Regional district backs more consultation on plans to help caribou

It is feared that the caribou recovery plans could result in closure of backcountry areas

Okanagan student shows skill at provincial finals

Aidan Eglin of Armstrong won website development event at Skills Canada’s B.C. finals in Abbotsford

Kootnekoff: Easter Bunny legal woes

Several years ago, our young daughter needed to know: “Is Santa Claus… Continue reading

Okanagan fire department rescues kittens

Enderby homeowner not aware cats were in wood pile in yard near garbage pile fire that got away

Okanagan township’s open burning winds down

Spallumcheen reminds residents of regulation changes as open burning concludes April 30

Most Read