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

 

Just Posted

Monday sees rain with high of 10 C

Plus your weekly forecast

Number of ancient humans continues to grow after discovery

Scientists identify at least 12 species outside of Homo sapians following discovery in Philippines

Peninsula grandmothers salute Roaring ’20s fashion

May 3 event in Sidney benefits Grandmothers Helping African Grandmothers

Deep Cove man running 50 km every month through his 50th birthday year

Ultrarunner hopes Deep 50 Challenge will raise $5,000 for Help Fill A Dream

WATCH: Movie star and PACE alum Calum Worthy talks musical theatre and his career

“American Vandal” and “Austin and Ally” actor has been returning to the program for over 20 years

POLL: How often does your family use BC Ferries?

Navigating the lineups for BC Ferries is a way of life for… Continue reading

Crime Stoppers most wanted for Greater Victoria for the week of April 16

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Bodies of 3 mountain climbers recovered after last week’s Banff avalanche

The men disappeared while attempting to climb the east face of Howse Peak in the Icefields Parkway

Happy birthday: Queen Elizabeth II turns 93 on Easter Sunday

Sunday is the first of two birthday celebrations each year for the queen

RCMP confirm witnesses say body found at Kelowna’s Gyro Beach

Police tape is blocking part of the beach and several RCMP officers are on scene.

B.C. fire department rescues kittens

Enderby homeowner not aware kittens in wood pile near garbage pile fire that got out of hand

QUIZ: How much do you know about Easter?

Take this short quiz and put your knowledge to the test

Most Read