The B.C. government has applied to freeze B.C. Hydro electricity rates for one year and cancel a proposed three per cent hike originally planned for next year.
Energy Minister Michelle Mungall said Wednesday the one-year freeze will give time for a complete review of B.C. Hydro’s debt and its projects. That will start affter the cabinet decides the fate of the Site C dam project on the Peace River.
In debate on her ministry’s budget Tuesday, Mungall cited a B.C. Hydro esitmate that cancelling the Site C project would translate into a 10 per cent rate increase for the utility, or additional debt of $4 billion to cancel the dam project and return the site to the state it was two years ago when construction began.
“That is why we are commencing our review of B.C. Hydro following our decision on Site C, so we’re not speculating but we are working with factual information in terms of the direction that we’re taking,” Mungall told reporters at the legislature Wednesday.
B.C. Liberal finance critic Tracy Redies said the one-year freeze takes $150 million in revenue away from B.C. Hydro, and cancelling Site C would make matters worse.
Premier John Horgan campaigned on a promise to freeze rates and complete an independent review of Site C by the B.C. Utilities Commission.
Hydro rates have increased 24 per cent over the last four years, as the utility has taken on major construction upgrades and deferred debt to keep rates from rising even higher.. The rate freeze follows a budget commitment made in September to phase out the provincial sales tax on electricity sold to businesses.
Horgan said his government will be meeting with B.C. Hydro officials in the new year to discuss a number of issues including deferred debt, the steady increase in electricity pricing and also the two-tier billing system that charges a higher rate to large residential consumers.