BC Hydro’s rates will increase by 1.8% on April 1, if the BC Utilities Commission (BCUC) approves the utility’s rate increase request. But rates could drop 1% in 2021 – a good time for an NDP government seeking re-election – then rise by 2.
BC Hydro’s rates will increase by 1.8% on April 1, if the BC Utilities Commission (BCUC) approves the utility’s rate increase request.
But rates could drop 1% in 2021 – a good time for an NDP government seeking re-election – then rise 2.7% in 2022.
This is indicated by interim reports of the comprehensive review of BC Hydro ordered by the NDP government to adjust electricity rates, which were expected to rise 13.7% over the next five years as part of its previous ten-year plan.
BC Hydro now says it can keep that rate hike at 6.2% over five years, as follows:
• 1.8% increase, 2020
• Decrease of 1%, 2021
• 2.7% increase, 2022
• Decrease of 0.3%, 2023
• 3% increase, 2024
The first interim report, released last year, found that the reduction in required increases was mainly due to the $ 1.1 billion write-off of BC Hydro’s debt by the NDP government and the cancellation of the agreements. purchasing power with independent power producers for the electricity it does not need.
The second interim report, which was released last week, envisions a number of changes in the way BC Hydro does business, in part to help facilitate the goals of the CleanBC plan.
For example, BC Hydro appears to be considering eliminating the two-tier rate plan which essentially penalizes users who consume more electricity.
He also notes a potential for increased clean energy trade between British Columbia and US states which has increased the development of wind and solar energy.
BC Hydro’s two-tier system was designed to encourage conservation. Beyond a certain threshold, customers encounter a higher level and pay higher tariffs for electricity.
But at a time when the government wants to discourage the use of natural gas for home heating and industrial uses, and encourage greater use of electricity, a two tier system that actually discourages greater use of electricity. electricity may be at odds with this goal.
BC Hydro is now considering replacing the two-tier system with an optional rate design, in which customers could choose different rate plans, such as a “time-of-use” option.
The report – which is now open for public comment – cites the example of an owner who owns an electric vehicle opting for a tariff designed for night-time use of electricity to recharge the vehicle.
The report also suggests that smart meters could be leveraged in a way that BC Hydro customers can choose plans that allow BC Hydro to control things like water heaters.
A customer could, for example, opt for a plan that would allow BC Hydro to remotely turn down the heating of hot water tanks and baseboards during the day when people are at work.
“That was the promise of the smart meter investment and I don’t think it was fully realized,” said Bruce Ralston, Colombia’s new Minister of Energy, Mines and Petroleum Resources. British, at Business in Vancouver.
BC Hydro has been criticized for overestimating the future demand for electricity in British Columbia. When the new Site C dam starts producing electricity in 2025, for example, it is expected to produce surplus electricity for years to come.
There are, however, a few wilds in play that could cause an increased need for power in British Columbia.
One is the adoption of electric vehicles, which last year exceeded all expectations, with electric vehicles reaching 10% of all new car sales in British Columbia.
If EV adoption continued at the current rate, this could absorb some of Site C’s surplus, although it would also require additional investment in electrical infrastructure. The continued adoption of electric vehicles at the rate of 2019 will depend to a large extent on maintaining government rebates.
Another wild card is the amount of electricity BC Hydro may need to generate for industry. The attractiveness of this sector is difficult to predict in the long term with great certainty.
The electrification of northeastern British Columbia, where the plan is to electrify the natural gas sector, could lead to significant new attractions. But all it takes is for a large mine or pulp mill to shut down to blow up the forecast.
“Significant reductions in load would mean that more of BC Hydro’s existing system costs would have to be recovered by other customers, which could impact rates,” the interim report warns.
Regarding energy trading, the report suggests that the increased development of wind and solar energy in the Pacific Northwest – particularly in California – could present increased opportunities for energy trading. own.
The idea would be that British Columbia could buy more clean electricity at low cost when it is produced in surplus in the United States, and resell the hydroelectricity when demand and prices are high.
“Since Washington, Oregon, and California are very progressive jurisdictions when it comes to electrifying their economies, there are opportunities for trading electricity,” said Ralston. “There are synergies on the West Coast with the power regimes in Washington, Oregon and California. “
David Austin, energy lawyer for Stirling LLP, said British Columbia would use its hydroelectric resources to support the independent power industry in the United States, to the detriment of local independent power producers.
“There is too much emphasis on importing electricity, which would be at the expense of investing in generation in British Columbia, with the taxes, jobs and other national economic benefits that come with it.” “, did he declare.
“There is no evidence that there will be an overall economic benefit for British Columbia by importing electricity. Jobs, investments and taxes end up in the United States, not in British Columbia.
“We need our existing system to support production in British Columbia to meet our greenhouse gas reduction targets.”