BC Hydro regulator to issue decision on rates for BC’s poor

Media Advisory

The BC Utilities Commission, which regulates the province’s electricity rates, has announced it will issue its decision in BC Hydro’s rate review process on Friday, January 20, 2017.

In its decision, the Commission will determine rate structures and conditions of service for BC Hydro’s residential, business and industrial customers.

The BC Public Interest Advocacy Centre (BCPIAC) is seeking an order that BC Hydro implement programs for low income residential customers including a discounted rate for electricity, low income customer rules, and a crisis intervention fund.

BCPIAC is seeking these programs because low income customers are struggling to pay BC Hydro’s continuously increasing electricity rates, with over 30,000 ratepayers facing disconnection every year.

BC Hydro rates have risen 51 per cent over the last 11 years and are on track to rise an additional 30 per cent over the next eight years.

Following release of the decision, BCPIAC staff lawyer Erin Pritchard can be reached for comment: 604-687-3063.

LNG plants get special deal on Hydro, not the people who need it

December 21,2016 | Erin Pritchard & Seth Klein |  The Province
Link to original article

It’s always telling to see who in our province is able to win special treatment from the B.C. government.

The B.C. Utilities Commission is currently reviewing residential B.C. Hydro rates, something they do periodically. As part of that process, the B.C. Public Interest Advocacy Centre, on behalf of numerous organizations representing low-income British Columbians and seniors on fixed incomes, has spent the last two years trying to win a special discounted B.C. Hydro rate for low-income people. In the face of steeply rising electricity rates, many low-income people have been finding it increasingly hard to pay their bills.

It’s been a painstaking process, a slow and expensive endeavour. B.C. Hydro has actively argued against such a discounted rate for low-income people despite the relatively modest cost of what is being sought. The minister of energy and mines has been dismissive of low-income bill affordability measures, stating simply that the rates are already affordable.

It turns out, however, that the provincial government is more than willing to direct B.C. Hydro to offer special discounted rates — as long as the discounts are for the liquefied natural gas industry.

On Nov. 4, the Woodfibre LNG project in Squamish became the first LNG proposal to move forward to a final investment decision. At the same time, the government and B.C. Hydro announced that in order to entice a final investment decision from Woodfibre LNG, a reduced electricity rate — called the “eDrive rate” — would be provided to LNG proponents who use B.C. Hydro electricity to power their liquefaction.

This creates a significant subsidy for these businesses – estimated at $34 million per year for the Woodfibre plant, and up to $860 million over the life of the facility. And if other larger LNG plants move forward, the cost of this subsidized LNG Hydro rate will be even greater. Notably, this special discount has been exempt from review by the B.C. Utilities Commission.

This decision speaks volumes about the government’s priorities. They are more than willing to offer a reduced electricity rate to the LNG industry but have resisted giving a break to the most vulnerable members of our communities.

Residential electricity rates in B.C. have risen 51 per cent over the last 11 years and are on track to rise an additional 30 per cent over the next eight years. And rates will continue to rise sharply after that if B.C. Hydro proceeds with multi-billion-dollar projects like the Site C dam, which the government has also conveniently exempted from full public review by the B.C. Utilities Commission.

Over this same period, social-assistance rates have remained virtually stagnant and minimum wages and average earnings have not increased by nearly the same amount as electricity rates. Low-income residents have no spare money to pay for continually rising electricity costs and, increasingly, have to make impossible choices between basic necessities like electricity, food and medicine.

During the recent review of B.C. Hydro’s rate design, the B.C. Public Interest Advocacy Centre advanced proposals designed to offset the impact of electricity rate increases on the poorest people in the province. These proposals include a discounted electricity rate, a crisis intervention fund and more flexible payment arrangements for people facing disconnection.

These proposals are modest and would offer relief to many who are struggling to keep the heat and lights on in their homes while having a negligible impact on other ratepayers. For example, if every eligible low-income resident applied for and received the discounted rate, which is unlikely, the cost would be roughly $27 million annually — less than the annual subsidy just extended to Woodfibre LNG. If the cost were spread out over all other residential customers, the impact on monthly bills would be in the range of 50 cents each.

Over the past several years, Premier Christy Clark has sought to hang her hard hat on the promised economic benefits of the LNG industry, but it is unfair to ask low-income British Columbians to pay to realize this goal.

Erin Pritchard is a staff lawyer with the B.C. Public Interest Advocacy Centre.

Seth Klein is B.C. director of the Canadian Centre for Policy Alternatives.

Anti-poverty advocates call for BC Hydro to implement an electricity affordability program for BC’s poor

For Immediate Release | BCPIAC

August 15, 2016 (Vancouver) Starting on August 16, 2016, the BC Utilities Commission (BCUC) will hold a public hearing to review BC Hydro’s Rate Design Application (RDA). In this process, the BCUC will hear evidence and submissions from BC Hydro and intervener groups and determine rate structures and terms and conditions of service for residential, business and industrial customers.

The BC Public Interest Advocacy Centre (BCPIAC) is intervening on behalf of seven organizations in this rare opportunity to ask the BCUC to order BC Hydro to implement programs for low income residential ratepayers including a discounted rate for electricity, low income customer rules, and a crisis intervention fund.

BCPIAC is seeking these programs because low income customers are struggling to pay BC Hydro’s endlessly increasing electricity rates. In support of these proposals, BCPIAC has presented evidence from two expert witnesses, and a number of advocates and low income ratepayers.

RDA-social-Final-300x300 Anti-poverty advocates call for BC Hydro to implement an electricity affordability program for BC’s poorBC Hydro has increased residential electricity rates by 50% in the last 10 years, and is on track to increase them by over 30% in the next eight years. Rates are projected to continue to rise significantly in future years as BC Hydro proceeds with multi-billion dollar projects such as the Site C dam which have been exempted from a full public review by the BCUC, and is currently estimated to cost over $9 billion.

BC Hydro’s rate increases have grossly outpaced increases in income for low income British Columbians. For example, BC social assistance rates have been frozen since 2007 at $610 per month for basic assistance and $906 for disability assistance, and in the last 10 years the BC general minimum wage has only increased by $2.45 an hour.

Keith Simmonds, a Minister with Duncan United Church in Duncan BC, who provided evidence in support of BCPIAC’s proposals, has seen an increasing number of people who are either facing disconnection or have already been cut off because they cannot afford to pay their BC Hydro bills. “Inability to pay rising Hydro costs has a huge impact on low income people, especially seniors on fixed pensions and people who rely on the very low social assistance rates that have been frozen since 2007” Simmonds said.  “Many people have to choose between paying rent, purchasing food, and paying their electricity bill.”

“About 10% of BC Hydro residential customers live below Statistics Canada’s Low Income Cut-off, which translates to about 170,000 customers”, said Sarah Khan, one of the lawyers at BCPIAC who is bringing this issue to the BCUC.  Khan added that “BC Hydro’s rates are increasing much faster than incomes for low income people, and our proposals will help to mitigate the impact of BC Hydro’s never-ending rate increases”.

BC Hydro offers no rates or terms and conditions that specifically apply to low income customers. The only programs available to these customers are energy saving kits and in more limited cases, energy efficiency audits and certain home upgrades. While these programs are important, they are not offsetting BC Hydro’s rate increases.

BCPIAC’s low income proposals were developed by Roger Colton, an expert in low income rate design from the United States, who will testify as an expert witness during the public hearing. Mr. Colton will testify that measures such as a discounted electricity rate can simultaneously address affordability concerns, improve cost reflectivity in rates, and improve the efficiency of BC Hydro’s operations.

BCPIAC will also be calling Seth Klein, Director of the Canadian Centre for Policy Alternatives, BC Office, to testify about the extent and profile of poverty in BC and the difficulties low income people in BC have paying for the basic necessities of life including residential electricity. Mr. Klein’s evidence will provide context for the need for mitigating measures like BCPIAC’s proposed bill affordability programs.

BCPIAC is representing the following groups in this proceeding: Active Support Against Poverty, BC Old Age Pensioners’ Organization, BC Poverty Reduction Coalition, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC, Together Against Poverty Society, and Tenant Resource & Advisory Centre.

The hearing will take place on August 16-18 and 23-24, 2016 in downtown Vancouver.

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FULL Press Release

Background Information

Poverty advocates criticize Hydro for number of service disconnections

June 10, 2016 | Frank Stanford | CFAX 1070

Link to original article

The Together Against Poverty Society is outraged by the sharp growth in number of households being disconnected by B-C Hydro for non payment of bills.

TAPS representative Tony Pullman was speaking on C-FAX (with Frank Stanford) this morning…

“They disconnected… in the year ended March 31st 2016…B-C Hydro disconnected 30, 283 customers. Residential customers”

Pullman says the numbers have grown dramatically since the introduction of smart metres made it possible to disconnect remotely.

Pullman admits that Hydro has since reduced the fee it charges for re-connecting, but he argues the corporation was slow in doing so, and thousands of people who could ill afford it were charged an unnecessarily high price.

BC Lags in Making Hydro Affordable for Poor: Expert

Many places in North America already reduce rates for strapped low-income users.

June 6, 2016 | Andrew MacLeod |  TheTyee
Link to original article

Adopting measures to make BC Hydro bills more affordable for people with low incomes would make good business sense for the utility, according to testimony to the British Columbia Utilities Commission from a prominent expert on North American utility pricing.

“My objective in B.C. was to look for some ways to what I call ‘rationalize’ the way BC Hydro works with and treats its low-income customers,” said economist Roger Colton in a telephone interview. That would be good for those customers as well as for the Crown corporation, he said.

Based in Belmont, Massachusetts, Colton is a principal with the firm Fisher, Sheehan & Colton and has consulted on utility issues in several American states and Canadian provinces.

Ontario, New York, Colorado, Illinois, Pennsylvania and Maine are among the jurisdictions that had introduced a variety of measures to make electricity more affordable for customers with low incomes

“Increasingly in the United States electricity utilities are adopting affordability programs for low-income customers,” Colton said. “I’ve been doing this stuff for 25 or 30 years now. There was a lull, but just in the last few years there have been either states or provinces that have moved to introduce low-income affordability programs.”

He cited Ontario, New York, Colorado, Illinois, Pennsylvania and Maine among the jurisdictions that had introduced a variety of measures to make electricity more affordable for customers with low incomes. More than 30 of the 50 states have some form of affordability program in place, he said.

Affordability, not rank, matters: Colton

Colton’s B.C. testimony was part of a 341-page document the B.C. Public Interest Advocacy Centre filed May 9 with the BCUC on behalf of seven anti-poverty and seniors’ groups.

The recommendations are designed to help 170,000 families in B.C. who live below the low-income cut-offs set by Statistics Canada, around $32,000 a year for a family of four depending on what size community they live in.

The utilities commission is reviewing the design of BC Hydro’s rates with a mandate from the provincial government that includes evaluating the current rate structures to ensure they are fair and is hearing from many interveners as part of that process.

Whether it’s the third lowest or the third highest, there are people in British Columbia who can’t afford to pay their electricity bills

The minister responsible, Bill Bennett, told The Tyee in February that BC Hydro rates are already affordable since they are the third lowest in North America, even after recent rate increases.

“The fact that it’s less expensive, [that] rates are less expensive than elsewhere, doesn’t say anything about affordability,” Colton cautioned. The question is whether people with low incomes are able to pay their hydro bills, he said. “Whether it’s the third lowest or the third highest, there are people in British Columbia who can’t afford to pay their electricity bills.”

The Tyee previously reported on testimony to the BCUC from individual ratepayers, some of whom said they faced a choice between paying their utility bills and being able to afford food, and from advocates who said it is common throughout the province for people to struggle to afford their utility bills.

Three ideas for low-income help

Colton makes three main proposals to make BC Hydro rates more affordable for people with low incomes.

He recommends introducing an essential services block that would give customers who qualify a discount of four cents per kilowatt hour on the first 400 kilowatt hours of electricity they use each month. Doing so would better reflect what it costs to serve low-income customers, who BC Hydro has acknowledged are cheaper to serve than other customers, he said.

The reduction would knock $16 a month off the bill for a low-income BC Hydro customer.

Colton also recommends creating a crisis intervention account funded with a 25 cent per month charge to all BC Hydro accounts. The estimated $5.4 million a year that would be collected could be distributed to customers who are about to have their power disconnected due to nonpayment or who owe amounts they are unlikely ever to be able to pay, he said.

Finally, he suggests various changes in the terms and conditions of service, including preventing BC Hydro from disconnecting people’s power between November and the end of March. “The termination of service during British Columbia’s cold weather months is an inherently dangerous activity,” Colton testified, noting the health impacts are well known. “The standard utility practice in cold weather jurisdictions is to provide shutoff protections during these cold weather months.”

He also recommends waiving security deposits, making more flexible payment arrangements, eliminating late-payment fees, and excusing reconnection fees for low-income customers.

Colton said on the phone that of the programs in place elsewhere, the best are ones that cap the utility rate at an affordable level based on a household’s income. The guideline is usually to cap the cost for gas and electric combined at no more than six per cent of a household’s income, he said.

His recommendations for B.C. are ones that can be made within the existing service model and are designed to be clearly within the utility commission’s jurisdiction, he said. “They all work independently, but they all work better if they work together.”

Tony Pullman is the treasurer at the Together Against Poverty Society and a former BCUC commissioner. BC Hydro rates have been steadily rising while minimum wage and social assistance rates have seen little or no increase, he said.

The proposed changes would make a difference for the many people who are surviving on shockingly low incomes in the province, he said. “It’s probably a couple hundred dollars a year, which is a lot, believe you me.”

BC Hydro’s rebuttal evidence is due in early July and oral hearings are set for August.

Power Bills Rising, ‘My Clients Are Panicking’

Hydro costs push many low-income British Columbians to edge, say support experts.

June 1, 2016 | Andrew MacLeod | TheTyee
Link to original

Advocates who work closely with people surviving on low incomes have testified to the British Columbia Utilities Commission that it is increasingly common for their clients to struggle to pay the rising cost of electricity, often with severe consequences.

My clients are aware of the recent and upcoming rate increases, and they are panicking

“My clients are aware of the recent and upcoming rate increases, and they are panicking,” said Stacey Tyers, the manager of counselling support services at the Terrace and District Community Services Society.

Throughout 12 years of anti-poverty work Tyers has seen clients with trouble paying their electricity bills, she said. “It is definitely getting worse though,” said Tyers, who also is a Terrace city councillor. “We are now seeing a much larger number of people with BC Hydro issues.”

Keith Simmonds, the co-ordinating minister at the Duncan United Church, said that over the past 18 months more people have sought help from the church because they can’t afford to pay their BC Hydro bills. “Inability to pay rising hydro costs has a huge impact on low-income people. Many people have to choose between paying rent, purchasing food and paying their BC Hydro bill.”

“Contacts about BC Hydro issues have definitely increased in recent years,” said Audrey Schwartz, the executive director of Active Support Against Poverty in Prince George. About 79 per cent of the people who turn to the agency for help with tenancy and housing are First Nations, she said.

“Our office saw a significant spike in contacts about BC Hydro issues in 2014,” said Stephen Portman, the advocacy lead at the Together Against Poverty Society in Victoria. “The increasing unaffordability of BC Hydro rates for our clients means that people are unable to pay their bills, and are more often disconnected.”

The statements from six advocates from throughout B.C. are part of a 341-page document the B.C. Public Interest Advocacy Centre filed May 9 with the BCUC on behalf of seven anti-poverty and seniors’ groups.

The Tyee reported this week on testimony the submission included from three people who were themselves struggling on low incomes to pay their BC Hydro bills. The document also includes statements from experts on poverty and utility pricing.

The utilities commission is reviewing the design of BC Hydro’s rates and has a mandate from the provincial government that includes evaluating the current rate structures to ensure they are fair.

Losing power bad for health

According to the testimony from the advocates, high BC Hydro rates contribute to poor health, families losing custody of their children, and difficult choices. One advocate described providing candles to a disabled senior so that he would have light after BC Hydro disconnected his electricity.

Emma Gauvin is the social work team lead for the STOP HIV/AIDS program at Vancouver Coastal Health, which provides services to “Aboriginal people, LGBTQ2S (lesbian, gay, bisexual, transgender, queer/questioning and two-spirited) communities, youth, immigrant and refugee communities, and people with mental health and/or addiction issues.”

“We work with people who are HIV positive, and the majority of our clients struggle with addictions and mental health issues and have low incomes and live in unstable housing,” her testimony said.

Trouble paying BC Hydro bills is a frequent problem, Gauvin said. “BC Hydro issues relate to the social determinants of health, and interfere with our ability to provide services to our clients,” she said. “If someone is cut off by BC Hydro, then their lack of electricity becomes a priority. If our clients do not have electricity, this can derail treatment plans for other health issues.”

Clients who lose electricity in their homes risk having refrigerated and frozen food spoil, she said. “Many of our clients are prone to opportunistic infections, so not having access to proper nutrition can affect their health.” Also, she said, two common drugs for HIV need to be refrigerated.

Skipping medicine to pay bills

“When it comes to low-income communities, every time there is a rate increase, you are taking food out of someone’s mouth,” said Tyers in Terrace.

When it comes to low-income communities, every time there is a rate increase, you are taking food out of someone’s mouth

She described one client who lived in a trailer and faced a monthly BC Hydro bill of $300, a significant part of her budget. “She got to the point where she stopped buying her blood pressure medication so that she could keep up with her bills.”

Others avoid using power, Tyres said. “I know of many people that keep their heat well below where it should be in order to reduce costs,” she said. “It is not healthy or safe for those people or their families. No one else would keep their heat that low.”

BC Hydro says it’s not the Crown agencies problem when families have their electricity disconnected and no longer have heat, light or hot water, Tyers said. “However, I have seen the Ministry of Children and Family Development remove children from a home, citing lack of electricity along with other reasons for removal of the children.”

People often get behind on their bills in the winter when they are higher, she said. “If someone is heating their house with electricity in the winter in a northern community, the bills can be enormous. It is much darker and colder here in the winter than in other parts of the province, and people use light and heat a lot more.”

Simmonds, the minister in Duncan, said many of the families his church works with worry that their children will be taken into government care if they can’t afford to pay for electricity for heat or to refrigerate food.

“In the region where I live and work, a particularly high number of kids are apprehended by the Ministry of Children and Family Development,” he said. “I understand that lack of electricity could lead [the ministry] to consider removing children from a home if the weather is cold for a longer period of time and the children’s parents or guardians could not afford to pay their electricity bill.”

Stagnant incomes, rising rates

People with stagnant incomes struggle to pay their BC Hydro bills, Simmonds said. “Seniors with pensions that seemed adequate in the past cannot afford current BC Hydro rates, nor can those living on provincial and on reserve welfare rates that have been frozen since 2007.”

Already the available assistance isn’t enough to cover bills, including those for utilities, he said. “Low-income people we see will absolutely be unable to cope with increases in BC Hydro rates without receiving a discount on their electricity bills or a corresponding increase in income (income assistance and disability assistance, and minimum wage).”

The high cost of electricity is a problem for people with low incomes, said Schwartz in Prince George. “Low-income people do not have a financial cushion that allows them to pay huge bills in a way that will actually make the problem go away,” she said. “Even if they manage to avoid disconnection one month, the rates mean they could be in the same place with the next bill.”

In Prince George, in the winter, it is impossible to survive without heat, she said. “For our clients with electric heating, this is a life and death crisis.”

Many of the cheaper places to rent in the northern city are electrically heated, she said. “This creates problems because low-income people move in because the rent is cheaper, and they don’t realize until they move in that electricity costs can be $300 per month.”

Often it is low-income, single-parent families in that situation, Schwartz said. “Facing large bills and disconnection because you cannot pay your bills is so stressful for people,” she said. “Our clients are people who are stressed to begin with, given their lack of financial stability. Every penny counts.”

Worrying about making ends meet is all consuming for many people, Schwartz said. “I cannot imagine how single parents deal with figuring out how to pay for these increasing costs, and still manage to sit down and help their children with their schoolwork.”

Choosing between food and electricity

“The impact of not having electricity should be obvious, but is particularly problematic when someone has a disability, or has small children and due to a lack of electricity is unable to cook,” said Portman at Together Against Poverty Society, a non-profit in Victoria that helps more than 5,000 low-income people per year.

“Being unable to afford electricity means not being able to clean laundry, shower and prepare for work, and heat your home in the middle of the winter — especially since a lot of low-income housing in the Victoria area has electric baseboard heating,” he said. “Getting cut off has a big impact very quickly.”

Many low-income clients are unaware that BC Hydro is planning further rate increases, Portman said. “The people we serve will clearly be unable to cope with additional rate increases. Most clients that present with BC Hydro issues are already using their food money to pay for BC Hydro — further increases mean less food in the cupboard. Keeping the power on is a tradeoff with feeding themselves and their families.”

He noted that there have been no increases to income assistance rates in B.C. since 2007. “Each year people become more desperate trying to cope with increasing pressures on their income. This amplifies the impact of BC Hydro rate increases and the resulting competition with meeting basic needs.”

Patty Edwards is the constituency assistant for Alberni-Pacific Rim MLA Scott Fraser and has been helping people with tenancy problems for 25 years in Port Alberni. In the past decade more of the issues have been related to BC Hydro she said.

“These problems seem to be coming up more and more now,” she said. “A lot of people just cannot afford the big BC Hydro bills they are receiving. Many of my clients are making their monthly payments and just getting by, and when BC Hydro rates go up, they can’t keep up.”

Lighting with candles

Many people with low-income renters move frequently and don’t realize how big their BC Hydro bills will be in a new home, Edwards said. “I often see clients that have moved into a new place and did not realize it was poorly insulated. There are lots of pre-war houses in this area that are poorly insulated and hard to heat — people move in because the rent is cheaper, and are blindsided when they get a massive bill.”

She testified she recently helped an elderly person with mental and physical disabilities who depends on disability benefits from the province. “The client is on an equal payment plan with BC Hydro, and the ministry pays the BC Hydro bill directly,” she said. “The client arranged to have the ministry pay the BC Hydro bills directly as the client is unable to cope with bills.”

But when BC Hydro reconciled the client’s actual usage with what he’d paid, the utility found he owed them money. “He was hit with a very large bill, which my client was unable to pay,” Edwards said. “His electricity was disconnected, and he didn’t understand why…. Even though the client had never missed a payment, he was cut off.”

for those that end up getting disconnected, living without electricity has huge health impacts

The power stayed off for him for about six months. “He had no light or heat,” she said. “I took him candles to use for lighting at one point, and a neighbour gave him an extension cord to their house so he could use his oven and fridge.”

Eventually someone in the community paid his bill so he could get reconnected, she said.

“Those who cannot afford their BC Hydro bills get so beaten down and disheartened,” Edwards said. “The stress can exacerbate their disabilities, and for those that end up getting disconnected, living without electricity has huge health impacts.”

Both the minister responsible, Bill Bennett, and BC Hydro president and CEO Jessica McDonald have told The Tyee that when it comes to affordability B.C. already has the third lowest rates for electricity in North America.

“Our view is the rates being the third lowest in North America are already affordable,” Bennett said in a February interview. “How low do they need to be before someone says they’re affordable? If you factor in inflation, people are paying the same thing for electricity in 2016 that they were paying in the 1990s. That sounds affordable to me.”

PIAC is proposing a suite of measures that would make electricity more affordable for some 170,000 families in B.C. who live below the low-income cutoffs set by Statistics Canada, around $32,000 a year for a family of four depending on what size community they live in.

Lens on Poverty in BC: Pay Hydro or Go Hungry

Poorest rate payers plead for relief but ministry and corporation say no.

May, 30, 2016 | Andrew MacLeod | TheTyee
Link to original

People living on low incomes cut back on buying food and other essentials so they can pay their electricity bills, according to testimony submitted to the British Columbia Utilities Commission as part of an ongoing hearing on BC Hydro rates.

After I pay my rent, I have $110 per month to spend on other expenses

“After I pay my rent, I have $110 per month to spend on other expenses,” said Curtis Barton, a 57-year-old First Nations man living in Prince Rupert. “I have to choose between utilities and food. I have given up other expenses, including gas heating and internet in my home, and owning a car.”

Christopher Shay, a 43-year-old man who lives in Coquitlam and has been deaf since birth, said he foregoes other essentials so he can pay his BC Hydro. “I do not have enough money left over each month to feed myself a healthy diet,” he said. “I am six feet tall and I am often hungry.”

The statements were included in a 341-page document the B.C. Public Interest Advocacy Centre filed May 9 with the BCUC on behalf of seven anti-poverty and seniors’ groups as part of BC Hydro’s ongoing rate-design review in front of the utilities commission.

Launched by the provincial government, the review’s mandate includes evaluating the current rate structures to ensure they are fair.

PIAC is proposing a suite of measures that would make electricity more affordable for some 170,000 families in B.C. who live below the low-income cut-offs set by Statistics Canada, around $32,000 a year for a family of four depending on what size community they live in.

Along with testimony from advocates for people living in poverty and experts on utility pricing, the Vancouver advocacy group’s filing quotes low-income ratepayers who explain the financial hardship rising electricity rates cause them.

Rising rent leaves little

Shay, whose first language is American Sign Language, receives $906 a month in disability payments from the provincial Ministry of Social Development and Social Innovation, according to his testimony for the BCUC submission.

“I want to work full time, I do not want to be on disability assistance,” he said. “But I haven’t been able to find ongoing, full-time employment. I do not have any assets or savings. I have debt, including student loans.

“I rent a one bedroom apartment in Coquitlam. The rent is currently $821, and will go up on June 1, 2016 to $845. My heat is included in my rent. My landlord has been increasing the rent every year. I have been on the waitlist for BC Housing for more than a year.”

Shay said he pays about $20 a month for BC Hydro. “I manage to pay my BC Hydro bill by cutting back on other essential expenses, particularly in months where I have no or little employment income,” he said.

“Aside from rent, I prioritize paying my BC Hydro and cell phone and internet bills, because… I rely on my cell phone and internet for communication and accessibility purposes and I need electricity to power my cell phone and internet. I also need to use lights, the fridge and stove.”

He said he eats the same simple diet every day: toast, sandwiches and spaghetti. “In the past, I got food from food banks, but the food made me sick so I stopped using food banks.”

Drafty house, electric heat

Conrad Dennis is a 46-year-old First Nations man living on $610 a month in social assistance payments in Williams Lake. He lives with his mother, who is almost 80 and who he believes receives a pension of about $1,000 a month, plus one other person.

“I live with my mum as she has health problems, and I want to help her out,” he said. “I do not have any assets or savings. I also have quite a bit of debt.”

He said he spends $350 on rent, $86 for BC Hydro and $100 for food. “Once my regular monthly expenses are paid, I am left with less than $100 for the month.”

Their house in Williams Lake is older and is heated using electric baseboards and space heaters, he said.

“We have difficulty paying the BC Hydro bill because rates keep going up, and our income stays the same,” Dennis said. “I am right against the wall in terms of expenses.”

Sometimes when they couldn’t pay BC Hydro, the electricity was disconnected. “The first time was about two years ago,” he said. “The account was in my name, and I could not keep up with payments because I wasn’t always getting contributions from the other people in the house in time. My mum managed to get us reconnected.”

Recently the utility disconnected them again. “We had a $600 bill we couldn’t pay,” he said. “BC Hydro phoned and said we owed $700, but I got a letter after that that said that $400 was past due. I didn’t understand how much we owed. I also didn’t understand how we had a debt because the [income assistance] ministry was still paying my monthly amount directly.”

Dennis said he applied for a crisis grant from the ministry, but it was denied. “My advocate helped me apply for a reconsideration of the ministry’s decision, but the reconsideration decision took too long, and our power was disconnected before we had the ministry’s decision.”

He said his mother paid out of her pension to have the power reconnected. “Now we owe BC Hydro $30 for the reconnection fee as well.”

Electricity is essential, especially since they heat with it, said Dennis. “It is really cold in Williams Lake in the winter. My mum is older, and she gets cold easily. She turns up the heat, and uses space heaters for a couple of hours each morning to heat up the house — sometimes she forgets to turn them off. The space heaters really affect the electricity bills.

“Our house is really old and drafty, and it loses heat easily. All the cold air comes in where the vents used to be, when the house used to be heated by natural gas. We can’t really turn the heat down or off to save money, because my mom has a bad heart and brittle bones.

“I find it so stressful, and I get worried. I don’t care so much about phone or lights, but we need heat — and my mom really needs a phone, lights, a fridge and heat.”

BC Hydro rates keep going up, Dennis said. “I can’t afford to pay any more for electricity,” he said. “I saw a flyer from BC Hydro about upgrades, but I thought I had to buy and install things myself. I did put in some energy-efficient lightbulbs, but they don’t seem to do anything to make my BC Hydro bills go down.”

Thankful for mild winters

Chris Barton lives alone with his dog in Prince Rupert, and without assets or savings he survives on $610 a month in provincial social assistance payments.

“I have quite a bit of debt and I have tapped out my friends and family for borrowing more money,” he said. “My rent is $500 per month, which leaves me $110 per month to spend on other expenses. My BC Hydro bill is $133 every two months.”

He lives in an old, poorly insulated trailer that’s heated with gas. “The gas has been cut off for about ten months now.”

Barton’s struggled to pay his BC Hydro bill since going on assistance. “I used to be a heavy equipment operator,” he said. “However, I have been unemployed for a couple of years. There is a high rate of unemployment in Prince Rupert right now.”

He said he owed BC Hydro $500 after his payments were reconciled with his actual electricity usage and he expected to be cut off again.

“The [income assistance] ministry has on two occasions assisted me with my BC Hydro bill in response to a disconnection notice,” he said. “On one of those occasions, the ministry did not assist me quickly enough and my electricity was disconnected. I went several days without electricity before it was reconnected. The ministry has told me that it will not assist me again to prevent a utilities disconnection.”

BC Hydro asks him to check his account online, something that’s difficult since he doesn’t have internet at home, Barton said. “It has been difficult to resolve issues with BC Hydro,” he said. “I have requested paper copies of my month-to-month usage, but BC Hydro has not sent them.”

Barton said he often lacks money for food. “I often do not have enough to eat,” he said. “I use food banks to supplement my diet. My friends and family also give me food.”

He stopped using gas for heat because he couldn’t pay the bills. “I currently use an electric heater and blankets to stay warm,” he said. “I am lucky that Prince Rupert has mild winters, because if I lived somewhere colder I would be in trouble.”

Hydro cheap enough says minister

PIAC asked the BCUC to keep the statements from two other witnesses confidential to protect the privacy of their children, said Sarah Khan, a lawyer with PIAC. The statements speak to the difficulty single parents have trying to raise children while living on very low wages, she said.

PIAC’s proposal would set a “lifeline rate” where low-income customers would have the basic charge of 17.64 cents per day waived and would pay a lower-than-normal rate of five cents per kilowatt hour for the first 250 kilowatt hours of electricity they use each month.

It would also provide up to $500 in emergency assistance to low-income households who have overdue BC Hydro payments and are facing disconnection. And it would create new terms and conditions for low-income customers, such as waiving security deposits, making more flexible payment arrangements, eliminating late payment fees and excusing reconnection fees.

Both the minister responsible, Bill Bennett, and BC Hydro president and CEO Jessica McDonald have told The Tyee that when it comes to affordability B.C. already has the third lowest rates for electricity in North America.

“Our view is the rates being the third lowest in North America are already affordable,” Bennett said in a February interview. “How low do they need to be before someone says they’re affordable? If you factor in inflation, people are paying the same thing for electricity in 2016 that they were paying in the 1990s. That sounds affordable to me.”

NDP leader John Horgan in March reintroduced a private member’s bill that would allow the BCUC to require a utility to provide a “lifeline rate” to low-income households. The Liberal controlled legislature failed to pass Horgan’s bill.

[Tyee]

As Hydro Rates Climb, an Idea to Reduce Bills for Low-income Folks

Advocates pitch affordability program, but minister insists rates are modest.

February 27, 2016 | Andrew MacLeod | TheTyee

Link to original

With electricity rates continuing to spiral upwards, an advocacy organization is pushing to have BC Hydro adopt measures to make bills more affordable for people surviving on low incomes. “Most other jurisdictions in North America have bill affordability programs,” said Sarah Khan, a lawyer with the British Columbia Public Interest Advocacy Centre. “We don’t.”

Confirmation of the latest BC Hydro rate hike came Friday when president and CEO Jessica McDonald said the Crown utility is seeking to raise rates by four per cent on April 1, consistent with a 10-year plan set out in 2013.

Most other jurisdictions in North America have bill affordability programs

BC Hydro rates have gone up by 50 per cent over the past 10 years and they are scheduled to go up another 11 per cent over the next three years, Khan said.

They’ll rise even further when the $10-billion Site C dam is completed on the Peace River and customers start paying for it, she said.

Meanwhile, the provincial minimum wage and welfare rates haven’t kept up while the cost of living has become more expensive, leaving many struggling to pay their bills, Khan said.

Rate review an opportunity, says lawyer

The advocacy centre has a proposal to make bills more affordable for some 170,000 families in B.C. who live below the low-income cut-offs set by Statistics Canada, around $32,000 a year for a family of four depending on what size community they live in.

On behalf of seven anti-poverty and seniors’ groups, the centre plans to submit the proposal in April as part of BC Hydro’s ongoing rate design review in front of the B.C. Utilities Commission. Launched by the provincial government, the review’s mandate includes evaluating the current rate structures to ensure they are fair.

A rate design review is done every eight to 10 years, so it will be a long time until there’s another chance to make such a change, Khan said. “We need to take this opportunity because low-income people are having great difficulty paying their BC Hydro bills.”

She added, “This is important because BC Hydro’s rates have been increasing astronomically over the last 10 years and they are projected to rise at potentially even greater levels.”

The Site C dam project should be halted until it’s certain the power is needed and the project has been independently reviewed, Khan said. The money that’s borrowed to build the dam will eventually need to be paid for through rates, she said.

“It is particularly unfair to low-income ratepayers,” she said. ”They can’t afford to pay continuing higher costs for electricity which is an essential service.”

Lower rate, more flexibility

The bill affordability proposal outlines three measures.

First, it would set a “lifeline rate” where low-income customers would have the basic charge of 17.64 cents per day waived and would pay a lower-than-normal rate of five cents per kilowatt hour for the first 250 kilowatt hours of electricity they use each month.

The rate would save low-income customers about $13 a month on their hydro bills, the advocacy centre calculated.

Second, it would provide up to $500 in emergency assistance to low-income households who have overdue BC Hydro payments and are facing disconnection.

Third, it would create new terms and conditions for low-income customers, such as waiving security deposits, making more flexible payment arrangements, eliminating late payment fees, and excusing reconnection fees.

Similar programs already exist in other provinces and are extensive throughout the United States, Khan said.

The B.C. government could create such programs, but it seems more likely it will oppose the proposal at the BCUC hearings, she said.

“We don’t think the government’s going to do anything,” Khan said. “They just keep taking dividends out of BC Hydro and ordering projects we don’t think we need.”

Rates low already, says Hydro head

At a news conference about the progress on Site C, The Tyee asked BC Hydro president and CEO McDonald about the bill affordability proposal.

“B.C., as you may be aware, has relatively very low rates for electricity,” McDonald said. “This is something our customers don’t necessarily know.”

For residential customers, the rates are the third lowest in North America, even after increases in recent years, she said.

BC Hydro offers help with energy efficiency so people can reduce their electricity use and receive lower bills, she said.

The minister responsible for BC Hydro, Bill Bennett, said he hadn’t seen the proposal, but also doesn’t see a pressing need to make hydro rates more affordable.

“Our view is the rates being the third lowest in North America are already affordable,” he said. “How low do they need to be before someone says they’re affordable? If you factor in inflation, people are paying the same thing for electricity in 2016 that they were paying in the 1990s. That sounds affordable to me.”

Rates are going up as fast elsewhere as they are in B.C., Bennett said. “It’s not that we don’t care about affordability. We’re already doing a couple of dozen things within BC Hydro and government to take pressure off rates. But rates are going to go up as long as you have to spend $2.4 billion a year on capital to upgrade your system and keep your system reliable,” he said.

BC Hydro’s cost-cutting measures since 2012 have included cutting some $418 million in operating costs and eliminating 1,140 positions, a ministry spokesperson said.

Horgan ahead on hydro, says Dix

The NDP opposition critic for BC Hydro, Adrian Dix, said he hadn’t seen the bill affordability proposal but that his party supports making electricity more affordable. “We’ll be very interested to see what [the centre] proposes,” he said.

NDP leader John Horgan has previously put forward proposals to help people with low incomes afford their electricity bills, both during his 2011 leadership campaign and in a 2013 private member’s bill in the legislature, Dix said. “Based on California, where this exists, John Horgan was on top of this years ago.”

The provincial government has used dividends from BC Hydro to fund tax cuts for the rich, Dix said. “This government has consistently used BC Hydro as a vehicle to reward its friends.”

He criticized the increase that BC Hydro announced Friday, saying, “This is a rate increase that hurts the economy and hurts people when they can least afford it.” Hydro rate increases amount to a tax increase on working people and businesses, he said.

Increasing BC Hydro rates drive request for an electricity affordability program for BC’s poor

Erin Pritchard | BCPIAC

Original article published on ClickLaw Blog

In September 2015, BC Hydro filed a Rate Design Application (RDA) with the BC Utilities Commission (Commission). This means the Commission, BC Hydro and stakeholders will review rate structures (how BC Hydro charges customers for its services) and terms and conditions of service for residential, business and industrial customers.

In this proceeding, the BC Public Interest Advocacy Centre (BCPIAC) will ask the Commission to implement rate relief, emergency bill assistance, and specific terms and conditions for low income BC Hydro ratepayers.

BC Hydro rates are increasingly unaffordable for low income customers

Since electricity is essential to survival, energy bills can only be paid at the expense of competing household necessities, such as food and medicine

About 170,000 (10%) of BC Hydro’s residential customers are “low income”, meaning they are living at or below Statistics Canada’s Low Income Cut Off (LICO).  People living in poverty have a hard time paying for essential services such as electricity when their incomes are stagnant. Since electricity is essential to survival, energy bills can only be paid at the expense of competing household necessities, such as food and medicine.

BC Hydro’s rate increases have far outpaced increases in provincial income and disability assistance rates and the BC general minimum wage over the same time period. Over the last 10 years, BC social assistance rates have only gone up by $100 or less (for a single person) and the BC general minimum wage by $2.45 an hour.BC Hydro residential electricity rates have increased by 47% in the last 10 years, and are on track to increase by another 10.5% in the next three years. Rates are projected to continue to rise significantly in future years as the government continues to order BC Hydro to build multi-billion dollar projects like the Site C dam without a full public review of those projects by the Commission. While rate caps are currently keeping BC Hydro rates artificially low, project expenditures will eventually be collected from ratepayers.

BC Hydro currently offers no rates or terms and conditions that specifically apply to low income customers.  It offers two programs to its low income customers:

  1. energy_povert_cta-300x188 Increasing BC Hydro rates drive request for an electricity affordability program for BC’s poorEnergy Savings Kits that include a few energy saving products which, if fully installed, might save $30 per year, and
  2. In more limited cases, energy efficiency home upgrades through BC Hydro’s Energy Conservation Assistance Program. This program is not available to BC Hydro customers living in apartments.

While such energy efficiency programs are important, they are not a stand-alone response to low income customers’ increasing inability to afford their power bills – they are only one element of what must be a comprehensive low income bill affordability strategy.

What is BCPIAC doing to help?

In the RDA, BCPIAC will ask the Commission to order that BC Hydro:

  • implement a “lifeline rate” for low income BC Hydro residential customers, so that these customers can get basic electricity at a reduced price;
  • introduce a low-income emergency bill assistance program of up to $500/year for low income households (this would be like a crisis grant, not intended to address ongoing bill affordability issues); and
  • adopt terms and conditions for service that would apply to low income ratepayers, including policies that would allow:
    • waiver of security deposits and the ability to build up a security balance over time;
    • flexible payment arrangements, including modifications to the equal payment plan program;
    • elimination of late payment fees;
    • suspension of disconnections during cold weather periods and for customers using lifesaving medical equipment; and
    • waiver of reconnection fees.

Read more about how you can help

BC Utilities Commission orders reduction of BC Hydro’s Minimum Reconnection Charge

The BC Utilities Commission has just ordered that BC Hydro’s Minimum Reconnection Charge (MRC) of $125.00 plus GST be reduced to $30 on an interim basis, starting on December 1, 2015. BC Hydro had requested that the lower MRC be implemented by April 1, 2016, but we successfully argued that the MRC is unjust and unreasonable as it no longer reflects BC Hydro’s actual costs to reconnect a customer.

The Commission’s decision is important as the reduced MRC will make a significant difference to customers that are disconnected, particularly during the winter months.  Paying a large and unfair MRC in addition to the arrears that led to the disconnection is a major barrier to low income customers across the province – a group that includes seniors, people with disabilities, and single-parent families.

As part of BC Hydro’s recently filed Rate Design Application, BCPIAC will also ask the Commission to direct BC Hydro implement a bill affordability program, including special terms and conditions such as more flexible arrears payment arrangements, so that electricity bills can become more affordable for low income BC Hydro residential customers. We will argue that BC Hydro needs a program to address the increasing unaffordability of electricity bills as a result of ever-increasing BC Hydro residential rates.

The Commission’s full decision on the MRC can be found here at page 6 of the Reasons for Decision.

New Ontario program helps low income ontarians with electricity bills

November 2, 2015 | Ontario Energy Board

Link to Ontario Energy Board Press Release

Ontario Energy Board Ontario Energy Board released an announcement introducing a new program to help low income residential customers to make electricity more affordable. See the press release.

As part of BC Hydro’s recently filed Rate Design Application, BCPIAC will ask the BC Utilities Commission to implement a bill affordability program so that electricity bills can become more affordable for low income BC Hydro residential customers. We will argue that BC Hydro needs a program to address the increasing unaffordability of electricity bills as a result of ever-increasing BC Hydro residential rates.

Ontario Electricity Support Program (OESP) Now Accepting Applications

TORONTO, Nov. 2, 2015 /CNW/ – The new Ontario Electricity Support Program is now accepting applications and will help make electricity more affordable for low-income families. The OESP was developed by the Ontario Energy Board and is designed to lower electricity bills through an on-bill credit. Starting January 1, 2016, eligible consumers will receive an on-bill credit of between $30 and $50 a month.

To qualify, applicants must receive an electricity bill and meet certain household income thresholds. Consumers are encouraged to apply online at OntarioElectricitySupport.ca and they can also call 1-855-831-8151 for more information and to be connected with a local intake agency for application assistance. Eligible consumers can expect the credit to appear directly on their bill about six to eight weeks from the date their application is approved.

More than 90 community groups are now ready to help consumers apply. For some consumers who heat their home with electricity or rely on certain medical devices that use a lot of electricity, the program offers a higher rate of assistance. First Nations and Métis consumers may also qualify for a higher rate of assistance.  First Nations electricity consumers should contact the Ontario Native Welfare Administrators Association (ONWAA) to confirm eligibility and to complete their applications at 1-844-885-3157.

The Ontario Energy Board is an independent and impartial public regulatory agency. We make decisions that serve the public interest. Our goal is to promote a sustainable and efficient energy sector that provides consumers with reliable energy services at a reasonable cost.

Quotes:
“The Ontario Energy Board is responsible for protecting the interests of all consumers and is pleased to be able to offer the Ontario Electricity Support Program.  Designed with input from consumer and community groups including First Nations and Métis, the OESP could assist as many as 500,000 low-income Ontario households,”
-Rosemarie Leclair, the Ontario Energy Board’s Chair and CEO

The OESP will help low-income consumers with their electricity bills and may help avoid disconnection of service,” said Mary Todorow, Research/Policy Analyst at the Advocacy Centre for Tenants Ontario (ACTO) and one of the Low-Income Energy Network’s (LIEN) founding members.”The OESP is an important element in a comprehensive approach to reducing energy poverty, alongside low-income targeted conservation programs, special customer service rules and emergency financial assistance.”

Ce document est aussi disponible en français.

BACKGROUNDER

New Ontario Electricity Support Program (OESP)

Help For Low-Income Ontarians

At the Minister of Energy’s request, the Ontario Energy Board (OEB) has developed a new rate program to lower electricity bills forOntario’s low-income households. This Ontario Electricity Support Program (OESP) is now open and ready to accept applications.

The Need

Designed with input from social service agencies, utilities, low-income advocates, First Nations and Métis communities, the OESP could benefit more than 500,000 low-income Ontario households. For low-income Ontarians, paying their electricity bill can be a challenge. Electricity represents a significantly greater share of their monthly expenses. For example, for households with an annual income of $20,000, a typical electricity bill could be 10 per cent or more of their income. The OESP is one of several programs designed to help electricity consumers with limited financial resources.

The OESP is available to all eligible low-income consumers of electricity utilities, unit sub-meter providers and electricity retailers. The Statistics Canada Low-Income Measure (LIM) is used to determine eligibility.

Most eligible consumers will have to reapply every two years or whenever personal circumstances change such as a move, increase or change in income levels.   

How OESP Helps – On-Bill Credits Between $30 to $50 A Month

Starting January 1, 2016, the OESP will provide a monthly, on-bill credit to eligible consumers based on household income and number of people living in the home. For example, a family of three earning a total household income of $30,000, will receive an on-bill credit of $30 a month.

OESP Monthly Credit Amounts

Household Income

Household Size (Number of people living in household)

1

2

3

4

5

6

7+

$28,000 or less

$30

$30

$34

$38

$42

$50

$50

$28,001 – $39,000

$30

$34

$38

$42

$50

$39,001 – $48,000

$30

$34

$38

$48,001 – $52,000

$30

The OESP offers a higher level of assistance to low-income First Nations and Métis households, consumers whose homes are electrically heated, and those who rely on certain medical devices requiring a lot of electricity. The credit for those receiving a higher level of assistance is between $45 and $75 a month.

OESP Monthly Credit Amounts – Energy Intensive

Household Income

Household Size (Number of people living in household)

1

2

3

4

5

6

7+

$28,000 or less

$45

$45

$50

$55

$60

$75

$75

$28,001-$39,000

$45

$50

$55

$60

$75

$39,001-$48,000

$45

$50

$55

$48,001-$52,000

$45

Program Costs and Funding

The OESP is funded by all electricity ratepayers. A per kilowatt-hour charge will be included under regulatory charges on all consumers’ bills. The OESP will cost the typical residential electricity consumer about $1 a month.

Consumer Information
For general information visit OntarioElectricitySupport.ca or call 1-855-831-8151 (TTY: 1-800-855-1155).

The Ontario Native Welfare Administrators Association (ONWAA) will work with First Nations communities to provide personal support. Call 1-844-885-3157 or email oesp@onwaa.com for more information.

SOURCE Ontario Energy Board

For further information: Media Inquiries: 416-544-5171; Public Inquiries: 416-314-2455 or 1-877-632-2727

Debt, subterfuge will cost BC Hydro ratepayers

October 24, 2015 | Brady Yauch | Consumer Policy Institute

Link to article at Consumer Policy Institute website

Why ratepayers in BC can expect their electricity rates to go in one direction: up.

This article originally appeared in the Times Colonist. 

Ratepayers in BC can expect dramatic electricity-rate increases for years to come.

Those rate increases will be needed to pay off B.C. Hydro’s soaring long-term debt and other costs the company has shunted to future ratepayers to make itself seem profitable and offset the impact of its spending on current customers.

Meanwhile, residential ratepayers — who have been cutting back on electricity consumption in recent years — will consume less, yet pay more each month.

B.C. Hydro has increasingly issued debt to finance its activities, with the company’s long-term debt having increased from $6.8 billion in 2004 to $16.7 billion last year — an increase of 146 per cent. The amount spent each year in interest payments alone has increased 35 per cent since 2004 and now amounts to $685 million, up from $507 million.

B.C. Hydro’s ability to take on ever-increasing levels of debt comes of the implicit guarantee of the province and its strong credit rating.

Across the private sector, utilities typically maintain a 60/40 debt-to-equity ratio. Yet, B.C. Hydro currently has a debt-to-equity ratio of 80/20, meaning it is more highly leveraged than private-sector utilities and uses the province’s credit rating to keep its borrowing costs lower than they would otherwise be. On a standalone basis, investors would require a higher interest rate when purchasing bonds from a highly leveraged company.

In contrast, in Ontario — where most of the electricity utilities are also publicly owned — the energy regulator has in recent years ensured that distributors move toward a 60/40 debt-to-equity ratio to better align with the private sector.

B.C. Hydro is also banking on future rate increases to support its current net income.

Since 2005, when the company established what are known as regulatory deferral accounts, “regulatory assets” have grown from $155 million to $5.4 billion.

“Regulatory assets” are funds that the company expects to earn from rates charged to future ratepayers. Each year, the company uses a portion of the money from these “regulatory assets” to boost its net income. The company argues that today’s spending should be pushed off to future ratepayers and so shouldn’t be deemed an expense — an accounting move which lifts its current net income.

The benefit of counting money today, but actually collecting it sometime in the future, is obvious: It makes the company more profitable and avoids the blowback it would receive from current ratepayers who would experience even higher monthly bill increases than they currently see.

If residential ratepayers were on the hook for moving B.C. Hydro to a debt-to-equity ratio of 60/40 and clear its deferral accounts over the next five years, it would cost them an additional $5,831, or $1,166 annually — on top of the rate increases that the company is already considering.

But even with the ability to kick the rate-increase can down the road, B.C. Hydro hiked residential rates by nine per cent in 2014 and six per cent at the beginning of this year. While the provincial government has set a “rate cap” of four per cent, 3.5 per cent and three per cent in 2016, 2017 and 2018, respectively, the company’s spending will likely be higher than what that cap will allow it to collect. The difference will be recorded in a deferral account and collected from future ratepayers.

Furthermore, the ability to charge those rates to future customers rests on the energy regulator, the B.C. Utilities Commission, signing off on the spending after an extensive review to determine whether those costs were “prudent.” The regulator hasn’t been allowed to complete a full rate review of B.C. Hydro for more than two decades.

Still, while the company maintains that it has a plan to deal with the “regulatory assets” — essentially get a handle on the rate hikes that it is planning for future ratepayers — the amount of money in the regulatory accounts has grown faster than B.C. Hydro’s own forecasts.

The current figure for regulatory assets is nearly $600 million more than the company predicted in 2013 that it would be at this point. The amount of money in the regulatory assets is already hundreds of millions of dollars more than the “peak” amount the company expected it to hit by 2020.

Meanwhile, capital expenses have grown faster than both inflation and electricity demand.

Annual capital expenditures have increased by 224 per cent, from $669 million in 2004 to $2.169 billion last year. Provincial demand for electricity over that time has grown by just two per cent from 2004 until 2014, or about 0.2 per cent on average per year. Demand last year was actually lower than it was in 2012. and has been declining for three consecutive years.

The combination of a dramatic increase in debt and capital spending, accounts brimming with IOUs from future ratepayers and a decline or flattening in demand will ensure that ratepayers will see their monthly bills going in one direction: up.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or by phone at (416) 964-9223 ext 236

Increasing BC Hydro rates drive request for an electricity affordability program

For Immediate Release | BCPIAC

Legal advocacy group, the BC Public Interest Advocacy Centre (BCPIAC) will ask the BC Utilities Commission (BCUC) to implement an electricity affordability program for BC Hydro’s 160,000 low income residential customers. The proposal consists of three strategies to address the hardship caused by high hydro rates on low income customers:

  • lifeline rates to keep rates more affordable for the poorest customers;
  • low income customer service rules including more flexible arrears payment arrangements and waiver of reconnection fees; and
  • emergency bill assistance to avoid disconnection.

BC Hydro has increased residential electricity rates by 47% in the last 10 years, and is on track to increase them by at least 10.5% in the next three years. Rates are projected to continue to rise significantly in future years as BC Hydro proceeds with multi-billion dollar projects such as Site C dam which have been exempted from a full public review by the BCUC.

BC Hydro’s rate increases have grossly outstripped increases in income for low income British Columbians. For example, BC social assistance rates have been frozen since 2007 at $610 per month for basic assistance and $906 for disability assistance, and in the last 10 years the BC general minimum wage has only gone up by $2.45 an hour.

“Electricity is an essential service, and low income BC Hydro customers have no spare money to pay higher electricity costs. Since electricity is essential to survival, people can only pay their electricity bills at the expense of competing household necessities, such as food and medicine” said Trish Garner, community organizer with the BC Poverty Reduction Coalition.

Electricity is an essential service, and low income BC Hydro customers have no spare money to pay higher electricity costs.

“About 10% of BC Hydro residential customers live below Statistics Canada’s Low Income Cut-off”, said Sarah Khan, one of the lawyers at BCPIAC who is bringing this issue to the BCUC, adding that “Continuous rate increases and stagnant incomes are causing low income people to struggle to pay for their BC Hydro bills.”

BC Hydro offers no rates or terms and conditions that specifically apply to low income customers. The only programs available to these customers are energy saving kits and in more limited cases, energy efficiency home upgrades. While these programs are important, they are not offsetting BC Hydro’s rate increases.

BC Hydro has just filed a Rate Design Application with the BCUC, and BCPIAC will intervene in this proceeding on behalf of the following groups to request low income programs: Active Support Against Poverty, BC Old Age Pensioners’ Organization, BC Poverty Reduction Coalition, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC, Together Against Poverty Society, and Tenant Resource & Advisory Centre.

-30-

Download the Press Release

Media Backgrounder

Province seeks to exempt two BC Hydro projects from review

September 16, 2015 | Justine Hunter | The Globe and Mail 

Link to original article

The provincial government is seeking to bypass a regulatory review to fast-track two major projects designed to supply the natural gas industry with clean energy for production.

The bid to exempt the transmission line projects from an independent evaluation comes on the heels of a commitment last spring from the B.C. Liberal government to restore the powers of BC Hydro’s watchdog, the B.C. Utilities Commission.

Critics say the projects should not proceed without independent scrutiny to determine if the plans are sound.

The Crown corporation says it needs to move quickly to respond to what it calls “some of the most dramatic, single industry load growth in a discrete area that it has experienced over the past 50 years.” That demand is fuelled by plans to electrify gas plants developing the Montney shale gas deposits in the Peace region in B.C.’s northeast.

Critics say the projects should not proceed without independent scrutiny to determine if the plans are sound.

“Both projects will see BC Hydro ratepayers subsidizing the oil and gas industry,” NDP energy critic Adrian Dix said. “It is unlikely these projects would make it through regulatory approval.”

The B.C. Utilities Commission (BCUC) is responsible for regulating natural gas and electricity utilities, but the provincial government has allowed BC Hydro to avoid regulatory reviews of a string of major projects by the BCUC, including the Site C megaproject, the Smart Meters program and the Northwest Transmission Line – projects collectively worth more than $10-billion.

Last February, Energy Minister Bill Bennett vowed he would restore the authority of the BCUC after a report he commissioned blasted his government for decades of cabinet interference that undermined the watchdog’s credibility. That report said the government should allow the regulator to review major projects even when the cabinet wants the final say.

“To be effective, the BCUC needs to have credibility, public confidence and independence within the exercise of its mandate as set by government,” Mr. Bennett’s blue-ribbon panel concluded.

This summer, however, the energy ministry launched a consultation with stakeholders about allowing the two power lines – the North Montney Power Supply and the Peace Region Electricity Supply – to go ahead without obtaining a “certificate of public convenience and necessity” from the BCUC.

The projects are intended to deliver Hydro power to industrial customers. Hydro warns that without approval, those customers would likely acquire their electricity needs by self-supplying with natural gas.

The Crown corporation says the BCUC review of the Peace Region project would lead to delays of a year or more. “An exemption would provide greater certainty around the timing of the project for our customers and allows us to work toward an earlier in-service date,” BC Hydro spokeswoman Simi Heer said in a statement.

A review by the BCUC will provide a full and transparent assessment by an expert tribunal in which members of the public as well as organizations such as ours and other intervenors experienced in utilities regulation can probe the need, cost, siting, alternative options and other relevant issues relating to the proposed projects

A group representing low and fixed income residential ratepayers is opposing the exemption application. “A review by the BCUC will provide a full and transparent assessment by an expert tribunal in which members of the public as well as organizations such as ours and other intervenors experienced in utilities regulation can probe the need, cost, siting, alternative options and other relevant issues relating to the proposed projects,” the BC Public Interest Advocacy Centre stated in a response to the consultation.

Sarah Khan, a lawyer for the organization, said hydro rates are going up at an unsustainable pace because of BC Hydro projects that have not been examined by the regulator.

“The cost of the projects exempted are so significant, and those costs are going to be borne by BC Hydro ratepayers,” she said in an interview. “We are concerned because the rate increases just keep going, and low-income ratepayers are having a great difficulty paying for their residential hydro bills.”

BC Hydro, provincial and federal governments oppose anti-poverty and seniors’ organizations’ application to intervene in Site C legal cases

For Immediate Release | BCPIAC

Vancouver – BC Hydro and the federal and provincial governments are opposing the participation of anti-poverty and seniors’ groups in Site C Dam Project legal cases.

Active Support Against Poverty, BC Old Age Pensioners’ Organization, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC and Together Against Poverty Society have applied to intervene in support of the Peace Valley Landowner Association (PVLA) challenges in BC Supreme Court and Federal Court of the approval of BC Hydro’s Site C Project, in order to represent the interests of low and fixed income residential ratepayers.

The Site C Project is currently projected to cost almost $9 billion, costs which will eventually have to be paid by BC Hydro ratepayers or taxpayers. The groups are asking for one hour of time in the PVLA’s BC Supreme Court case in order to explain how the flaws in the Site C approval process could result in significant rate increases to low-income ratepayers who are already having difficulty paying electricity bills.

“We plan to focus on the need for a thorough review by the BCUC of the need for and cost of the Site C Project, as recommended by the federal/provincial Joint Review Panel, to ensure that low-income people, including seniors and people with disabilities, aren’t required to pay unnecessary costs for electricity service,” said Sarah Khan, a lawyer with the BC Public Interest Advocacy Centre who is representing the groups.

Over the past decade, BC Hydro residential rates have increased by more than 41%, and will rise another 6% on April 1, 2015, for a total increase of 47% over 11 years.  BC Hydro’s rates could increase by another 10.5% between 2016 and 2018. These increases have not been matched by corresponding increases in BC’s welfare rates or minimum wage.

Because of government and BC Hydro opposition, a full day hearing has now been set to decide whether the groups and other intervenors will be allowed to participate before the BC Supreme Court.

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