For the first time in decades, British Columbians could be paying less for their electricity.
The provincial government has announced that BC Hydro is applying to decrease their rates.
The change would come into effect for spring of 2020 but must first be approved by the BC Utilities Commission (BCUC).
Michelle Mungall, Minister of Energy, Mines, and Petroleum Resources, says it’s part of the government’s ongoing focus to make sure “BC Hydro works for people again.”
“I am thrilled that BC Hydro is now able to apply for a rate reduction for the first time in decades,” she says in a statement. “If approved by our independent regulator, lower rates would make life better and more affordable for British Columbians.”
The statement explains that there are several key reasons which have lead to BC Hydro’s rate decrease application.
The first is “higher-than-anticipated income” from its trading subsidiary Powerex. The Crown Corporation is also anticipating lower debt financing costs and fewer purchases from other independent power producers (IPPs).
Although customers could see a rate reduction next year, BC Hydro’s rate forecast actually shows an increase over a longer period of time.
If approved, users would see a short-term decrease of 1% in 2020. There would be an increase, however, of 2.7% in 2021 and a 3% increase in 2023.
The provincial government says that the cumulative bill increase over the next five years is estimated to be 6.2%.
The BCUC is expected to make a decision on BC Hydro’s 2019-2020 and 2020-2021 rates next year.
If approved, the rate decrease could come into effect for BC Hydro customers on April 1, 2020.
Increased rates due to mistakes of the previous government
The announcement for a short-term rate decrease also comes six months after the release of a report by former BC Treasury Board Director, Ken Davidson. The report said that poor decisions by the previous government would actually increase the cost of electricity.
According to Davidson, BC Hydro was pressured into long-term contracts with IPPs, which would cost customers more than $16 billion over the course of 20 years.
The report says that the previous provincial government would restrict and control how BC Hydro could acquire and generate power.