April 29, 2011 Features & Images » Feature Story

The Great Green Shakedown 

Why your hydro rates are going up, and who's responsible


By now you know the bad news: your power rates are going up and there's nothing you can do about it.

Through an application to the B.C. Utilities Commission, BC Hydro is seeking a rate increase of 32 per cent over three years to help it pay for upgrades to its power-generating facilities.

It's a bitter pill to swallow for British Columbians. In a time of economic recession, residents already have to deal with rising prices for homes, food and fuel. And now they have to contend with the rising cost of electricity.

It's worse yet for residents of Whistler and communities north of here, where the monthly home bill is far more expensive than in the Lower Mainland.

Rich Coleman, B.C.'s minister of energy, vows to bring them down after a review of the increase by a panel of three bureaucrats. More recently he halted an interim rate increase of 9.73 per cent to start on April 1. Arguing it down to 8.23 per cent, it is due to take effect on May 1.

That is surely good news for a family dealing with a higher cost of living. But the fact is, he's merely prolonging power rates that are certain to rise beyond the 32 per cent BC Hydro has requested, an increase that Coleman's government has helped trigger through its own actions.

Here's how.


The Cause


BC Hydro's rate increases can be laid at the feet of two main issues: aging infrastructure and rising demand.

Many of BC Hydro's power-generating facilities were built 40 to 50 years ago and their bones are slowly disintegrating. One facility, the Ruskin Dam in the Fraser Valley, was built 80 years ago and is an elder to BC Hydro itself. Upgrades to projects such as this are estimated to consume about 44 per cent of BC Hydro's expenses between 2012 and 2014.

It's not the first time that expenditures in the billions have been made by BC Hydro. Revenue Requirements Application documents show that between 1967 and 1983, for example, capital investments regularly exceeded $2 billion a year. It was during this time that BC Hydro built facilities such as the WAC Bennett Dam, the Mica Dam and the Revelstoke Dam and Generating Station.

Then, for almost two decades, capital expenditures for BC Hydro dipped well below spending in other years. The reason, says Mike Farnworth, a member of successive NDP governments from 1991 to 2001 and more recently a candidate for the party leadership, is that facilities built in the 1970s and 1980s hadn't yet reached the point that they needed billions of dollars in upgrades.

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