B.C. VIEWS: Get ready for Hydro rate hikes

Construction and maintenance costs rising, and so is government demand for BC Hydro revenue to balance budget

Energy and Mines Minister Bill Bennett

VICTORIA – There’s a new sheriff in town for BC Hydro, and it didn’t take long for the political range war to resume.

The new sheriff, Kootenay East MLA Bill Bennett, found himself on the barricades as soon as he got the hugely complex responsibility for energy and mines. His saddlebags bulge with reports on BC Hydro’s seemingly runaway costs, along with Premier Christy Clark’s “core review” to cut $50 million a year from government operations.

NDP energy critic John Horgan highlighted the latest BC Hydro troubles in his assault on the B.C. Liberal budget. First there was a $140 million cost overrun on the Northwest Transmission Line, under construction north from Terrace to the tiny Tahltan village of Iskut and adjacent mine properties.

Then BC Hydro revealed results of an audit of its earthquake preparedness. “Condition red” was the key message. Basically, the sprawling utility has disaster plans for each of its dams or other power facilities, but no overall way to get the provincial power grid back up after a major earthquake.

Horgan recited his list of BC Hydro sins after a decade of meddling by the BC Liberals: huge deferred debt revealed by the Auditor General, enormous liabilities for private power contracts, and more rate increases that Bennett has already admitted are on the way. And now they can’t even keep us safe from the big one.

Bennett fired back. About $2 billion of that debt is for seismic upgrades for the 80-year-old Ruskin Dam in Maple Ridge, and the equally frail John Hart Dam on the Campbell River, built with wooden water pipes. Major BC Hydro works slowed down after completion of Revelstoke and Mica dams in the 1980s, and now the work is more expensive.

The Northwest Transmission Line is a partnership with Imperial Metals, which wants to power its Red Chris copper-gold-silver mine. Bennett said the company is not only paying for the last section to Iskut and the mine site, but pitching in for the main line as well. Ottawa paid $130 million to get remote communities off decades of dependence on diesel generators.

AltaGas, owner of one of those private power projects in the region, puts in $180 million to get connected to the grid. The line will open up more mining and hydro possibilities.

The cost overrun traces back mainly to the shortage of high-skill labour such as geotechnical engineering that the remote region already faces. And this is before natural gas pipelines and LNG plants gear up.

Bennett takes over from the last sheriff, Rich Coleman, who put BC Hydro through the wringer in 2011. Coleman soon abandoned his idea of putting off the Ruskin and John Hart upgrades (again) to keep rates low through the election, and saw the B.C. Utilities Commission jack up the rate increase to seven per cent to help slow the ballooning debt.

What’s ahead for rates? The utility is looking for 32 per cent in the next three years, says energy lawyer David Austin. He calculates that only 2.5 per cent is attributable to increased private power costs. Among other things, BC Hydro needs regional emergency centres capable of functioning after a Japan-sized quake, plus expansion.

Bennett came clean on another reason for rate increases – the government’s increasing dependence on taking a “dividend” as BC Hydro’s lone “shareholder.”

The newly updated budget tells us this annual “dividend” is past $500 million and rising fast: $545 million this year, $611 million next year and $684 million the year after.

Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COLUMN: Democracies don’t always have to agree

In no democratic system of governance is there ever 100 per cent agreement on any issue

EDITORIAL: Revisiting cannabis regulations

Recent retail license application has brought up concerns about present policy in Summerland

Guidelines regulate Summerland cannabis stores

The municipality’s policy, 300.6 establishes the 50-metre buffer zone around schools and parks

AlleyCATS Okanagan: Pet of the week

Meet Softy a five-year-old Himalayan cat available for adoption

Penticton MLA urges government to address fatal stretch of Hwy 97

“People are being injured and lives are being lost on this stretch of highway.” - MLA Dan Ashton

Okanagan divers ready to take on 2020 B.C. Winter Games

The athletes have been training four days a week

B.C.’s soda drink tax will help kids lose weight, improve health, says doctor

Dr. Tom Warshawski says studies show sugary drinks contribute to obesity

A&W employees in Ladysmith get all-inclusive vacation for 10 years of service

Kelly Frenchy, Katherine Aleck, and Muriel Jack are headed on all-expenses-paid vacations

B.C. mom’s complaint about ‘R word’ in children’s ministry email sparks review

In 2020, the ‘R’ word shouldn’t be used, Sue Robins says

B.C., federal ministers plead for meeting Wet’suwet’en dissidents

Scott Fraser, Carolyn Bennett says they can be in Smithers Thursday

EDITORIAL: Revisiting cannabis regulations

Recent retail license application has brought up concerns about present policy in Summerland

Guidelines regulate Summerland cannabis stores

The municipality’s policy, 300.6 establishes the 50-metre buffer zone around schools and parks

Largest aircraft to operate at YLW begins service to Toronto this summer

The Boeing 767-300ER will increase seat availability for flights to Toronto by 40 per cent

B.C. budget fails to ‘excite’ Kelowna business community

Chamber says Budget 2020 lacks a clearly defined competitiveness strategy

Most Read