Revenue Requirements Application
For Fiscal 2009/10
As B.C.'s economy and population grow, BC Hydro faces an increased demand for electricity.
For many years we have relied on the firm, reliable power generated from our heritage hydroelectric assets. But these dams and infrastructure, built in the 1950s, '60s and '70s, require significant reinvestment. And we need to add new sources of clean, renewable power to our system to meet demand for reliable power.
To accomplish these and other important objectives, BC Hydro has applied for a rate increase over the next two years with the British Columbia Utilities Commission (BCUC).
For an explanation of this rate increase and how it might affect you, visit our Residential Rates page.
What's new
The Revenue Requirements Application [PDF, 13.3 Mb] includes a rate increase for all customers – effective April 1, 2008 – that reflects the operating costs we will require over the next two years. The increase will be 6.56 per cent in the first year and 8.21 per cent in the second year.
Who will be affected by rate changes
All customer classes will be affected equally by the general rate increase from the Revenue Requirements Application.
Why rates are increasing
BC Hydro requires additional revenue to:
- Reinvest in our existing electricity generating assets and ensure they continue to produce power well into the future. This means replacing, updating and upgrading components, systems, and structures within our generating facilities.
- Invest in transmission and distribution systems to ensure the electricity generated in our facilities reaches homes and businesses when it is needed.
- Acquire additional clean energy to ensure we continue to meet the growing demand for electricity.
Specifically, BC Hydro's main cost drivers include:
Economic and population growth: Economic growth in British Columbia is expected to remain strong for the next three years leading up to and beyond the 2010 Olympics. This translates into high electricity demand growth.
Beyond this, BC Hydro's long-term forecasting indicates that in two decades our province will require as much as 45 per cent more electricity than we have today.
Aging facilities and infrastructure: Aging infrastructure has a profound effect on the ability of the electric system to be secure, safe and reliable. Many of BC Hydro's large generation facilities were built in the 1950s, '60s and '70s. Many of the mechanical and electrical components are near the end of their life. Today's investments will extend the life of our facilities.
For example, BC Hydro is making significant investments to renew several dams and generating facilities, including: Seven Mile Dam, Peace Canyon Generating Station, G.M. Shrum Generating Station (WAC Bennett Dam), Aberfeldie Generating Station, and the Coquitlam Dam.
BC Hydro is also expanding electricity generation at the Revelstoke Generating Station by adding a fifth 500-megawatt turbine (with the potential to add a sixth turbine), and is considering the addition of two new turbines at the Mica Generating Station.
Increased energy costs: Historically, BC Hydro has been able to use the surpluses created by investments in the 1950s, '60s and '70s to meet growing demand. By 2001, BC Hydro was no longer in a surplus position and became a net importer of electricity.
To meet this growing demand for electricity, BC Hydro is acquiring additional clean and renewable energy from independent power producers, as well as continuing to purchase from the market.
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 BCUC's public hearing process, visit http://www.bcuc.com.
