Revenue Requirements Application
For Fiscal 2007/08
At BC Hydro, our purpose is to provide reliable power, at low cost, for generations.
To ensure that we have enough revenue to provide a reliable supply of electricity, BC Hydro filed a Revenue Requirements Application in May 2006 with our regulator, the British Columbia Utilities Commission (BCUC), only the second in the last ten years.
In November 2006 a negotiated settlement agreement was reached for Fiscal Years 2007 (covering April 2006 to March 2007) and 2008 (covering April 2007 to March 2008), and approved by the BCUC. This agreement was reached following active dialogue with various stakeholders in a negotiation process, thereby avoiding a lengthy hearing.
Why BC Hydro has applied for a rate increase
A growing province means a growing demand for electricity in British Columbia. The current economic expansion in B.C. means that both the number of customers and their overall demand for electricity is growing. At the same time the water supply in BC Hydro's reservoirs is forecast to be lower than normal this coming year, which affects the capability of hydro generation plants. Increased revenue will go toward:
- Meeting incremental load growth through market-based purchases and long-term contracts with Independent Power Producers, which cost more than generation from existing heritage assets
- Building new electricity system infrastructure to serve the higher demand
- Upgrading our existing infrastructure to assure continued reliability with higher utilization
How BC Hydro's rates compare
BC Hydro's rates have remained low and stable for over a decade. This is only the second application made by BC Hydro in ten years. The first application, filed in 2004, resulted in a 4.85% rate increase that year.
Since 1992, BC Hydro rates have fallen relative to the Consumer Price Index and other utility and commodity costs.
|BC Hydro's rates versus the Consumer Price Index and its various components
Basic Residential Service (when applicable)
January 1992 to April 2006
|1992 = 100
Sources: Statistics Canada (Table 326-0001); BC Hydro data supplied by BC Hydro. Chart does not reflect proposed rate increase.
If the BCUC approves the requested rate increase, BC Hydro customers would still enjoy, on average, the third-lowest electricity rates in North America. An average B.C. household using 1,000 kWh per month would pay $67.10 per month, compared with $79.40 in Seattle, $89.40 in Edmonton and $118.10 in Toronto.
|Residential Electricity Bills*
1,000 kWh per month
Increases for commercial customers would also be relatively small:
- A typical restaurant or medium-sized school (with a demand of 40 kW and consumption of 10,000 kWh) would pay $734.38 per month, an increase of $32.63.
- A typical hospital, large hotel or large office (with a demand of 100 kW and consumption of 400,000 kWh) would pay $20,600.34 per month, an increase of $915.35.
Commercial Customers: Small*
|Average rate per kWh
Based on consumption of 10,000 kWh per month and 40 kW demand
Commercial Customers: Medium*
|Average rate per kWh
Based on consumption of 400,000 kWh per month and 1,000 kW demand
|Average rate per kWh
Based on consumption of 30,600,000 kWh per month and 50,000 kW demand
* Graphs reflect 2006 interim rate increase only. All bills and average rates are in Canadian currency and exclude taxes. "B.C." refers to BC Hydro service territory. A U.S. exchange rate of $0.88 was used. Source for rates: April 2005 Hydro Quebec Survey, updated to May 2006. Updated bills and rates to May 2006 have been estimated by BC Hydro and may differ from actual bills.
How you can manage your energy costs
BC Hydro recognizes that any rate increase can be a challenge to customers. Fortunately, our Power Smart initiative provides a range of programs and ideas that can partially or completely offset an increase by helping you save energy and reduce your energy costs.
For residential customers, we provide tips to make your home more comfortable and energy efficient, and information on Power Smart products that can help you save. Learn about programs and rebates to help you replace inefficient equipment and purchase energy-efficient products for your home.
Business customers can take advantage of Power Smart programs such as the Product Incentive Program, which provides financial incentives to organizations that replace existing inefficient products with energy-efficient technologies. Find up-to-date information on the best energy-efficient practices and technologies available to help you improve your bottom line, and see how other B.C. businesses have benefited from implementing Power Smart projects.
The rate application process
As a Crown corporation, BC Hydro is regulated by the British Columbia Utilities Commission (BCUC), an independent agency of the provincial government. The BCUC oversees our electricity generation and distribution operations, electricity plans, services and revenues, including the electricity rates we charge our customers.
The BCUC will review BC Hydro's Revenue Requirements Application through a public process before making a decision on any changes to electricity rates. Any change from an interim increase would be adjusted following the final decision.
To express your comments or suggestions on the proposed rate increase, or to learn about the B.C. Utilities Commission's public hearing process, visit the BCUC website.