LNG delays affecting hydro bills

Delays in B.C. LNG projects may already be affecting your hydro bill.

The Prince Rupert Gas Plant is one of BC Hydro’s northwest assets in the province. The service provider is re-evaluating capital expenditures and capital additions due to adjusting the 10 Year Rates Plan from 2013.

The delay in B.C. LNG projects may already be affecting your hydro bill.

If you’re starting to see your totals rise in the past few months, don’t fret (any more than you normally might).

BC Hydro has filed its three-year Revenue Requirements Application to the BC Utilities Commission in late July, and permanent general rate increases are in store for three straight years.

Starting April 1, 2016, BC Hydro was approved an interim rate increase of four per cent and that number would be permanent in the approval of the application by the BC Utilities Commission (BCUC).

In the same application, BC Hydro has applied for a further increase of 3.5 per cent starting April 1, 2017 and another three per cent on April 1, 2018, totaling a 10.5 per cent increase in three years.

The rate increases are part of BC Hydro’s 10 Year Rates Plan, which was originally developed in 2013 “to keep rates low and predictable even in the face of an unprecedented program to refurbish and expand our system,” describes the application.

The service provider is anticipating a $3.5 billion loss in revenue compared with original forecast figures developed in 2013, partly because of a current world market of low commodity prices such as oil and gas, and partly because of the delay of regulatory approval and final investment decisions on B.C. LNG mega-projects.

The company adjusted its original application filing (set for late February 2016) and delayed it to July largely because of  “a recent decline in the rate of industrial customer load growth” and as a result reduced forecast capital expenditures by $381.2 million, reduced capital additions by $392.5 million and dismantling costs by $70 million from fiscal 2017 to fiscal 2019.

The three outlined rate increases are “capped” and would be higher (8.9 per cent, five per cent, three per cent respectively) if not for BCUC agreements and directions.

The application also states that demand for power is expected to increase 39 per cent over the next 20 years (with LNG) in the province, before taking into account new energy adjusting incentives and measures in the future. BC Hydro is also continuing to move into more and more First Nations territories in the province with consultation and is dealing with a boost in energy demand in the northern areas of the province, specifically northeast B.C.

With that 39 per cent forecasted increase in thirst for energy, BC Hydro predicts one million more people living in the province 20 years from now, with 80,000 new homes built by the end of 2019 alone.

Jessica McDonald, BC Hydro president and CEO emphasized the predictability of low rates for customers.

“A lot has changed since the 2013 10 Year Rates Plan was introduced,” she said.

“Many of our industrial customers are facing declining prices for the commodities they produce, which means $3.5 billion less revenue for BC Hydro over that period. In preparing this application we had a choice: instead of passing those issues onto our customers, we gave careful thought to new measures to reduce our costs even further so we could stick to our plan to ensure low and predictable rates.”

The four per cent rate increase for fiscal 2017 equals $4.65 more per month for a family of four in a single detached home, $2.88 more per month for a couple living in a townhouse, and $1.37 more per month for a single occupant in an apartment.

Currently, BC Hydro’s system maintains 1 million utility poles, over 300 substations, 30 hydroelectric generating stations, 325,000 individual transformers, 77,000 kms of transmission and distribution lines and the company services four million customers.

The BCUC is looking for public input on the application.

“To get involved, individuals are encouraged to visit the BCUC website at www.bcuc.com or contact the BCUC directly at (604) 660-4700 or Commission.Secretary@bcuc.com for more information on how they can participate,” said Katharine Carlsen, BCUC acting director, policy, planning and customer relations last week.