BC Hydro Working Group Forecasts Rate Increases

An internal BC Hydro Rates Working Group document leaked to the press suggests that residential, small business and industrial electricity users may face a 26.4% increase in their rates from 2014-2016.  The document, dated August 23, 2013, attributes the required rate increase to a rise in BC Hydro's revenue requirement from an estimated $3.8 billion in 2014 to $4.8 billion in 2016.  According to the document, this increased revenue requirement is driven by the following costs:

• capital additions – $515 million, accounting for 13.4% or roughly half of the 26.4% rate increase
• rate smoothing – $160 million (4.2%)
• contracts with independent power producers – $135 million (3.5%)