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

Easter Fun Day packs ‘em in for Penticton child and youth development centre

It’s expected record numbers of people turned up for the ninth annual Easter Fun Day

Community bands together as #PentictonStrong after fatal shootings

Many in Penticton have turned to social media to express their condolences

Medieval Faire in South Okanagan cancelled, Desert Park wooing other events

The Desert Park Exhibition Society board is looking into hosting another major event

City of Penticton has survey to get resident feedback

The City of Penticton is conducting a survey of residents to get feedback on local issues.

Mounties identify woman found dead on Kelowna beach

“Our investigators do not believe criminality was involved.”

Homeless activists outside Notre Dame demand ‘a roof too’

Wealthy people have donated millions to effort to rebuild cathedral after devastating fire

Pacific Poke bowl lovers can get a free taste at the restaurant’s ‘Grand Opening Event’

The restaurant will offer some of its specials Thursday evening at its Kelowna location

PHOTOS: Green Party Leader Elizabeth May says ‘I do’ on Earth Day

May and John Kidder got married Monday morning in Victoria

Okanagan resort seeking connnection to rail trail

Predator Ridge Resort slated to present wish for trail from resort to ORT to Vernon council

Youth Shelter Fundraiser encourages kids to play for a good cause

The fundraiser takes place April 27 at the EnergyPlex

Waterway Houseboats wins $2 million for damages caused in 2012 flood

Houseboat company wins lawsuit involving Province of British Columbia, District of Sicamous

Okanagan power outage scuttles – but not ruins – city’s mission’s Easter meals

Vernon’s Upper Room Mission will serve Easter dinner a day later due to downtown power outage

Sri Lanka invokes war-time military powers after nearly 300 killed in Easter bombings

Sri Lanka’s minister of tourism says 39 foreign tourists were killed in the Easter Sunday attacks

Netflix filming in North Okanagan

Multiple downtown locations and scenic areas to star in TV production

Most Read