Business Rates
As B.C.'s economy and population grow, BC Hydro faces an increased demand for electricity.
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BC Hydro's capital projects [PDF, 575 Kb] |
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 is applying for a rate increase over the next two years with the British Columbia Utilities Commission (BCUC).
- What's happening to business rates
- Why rates are increasing
- How are rates determined
- What's happening to rate rider
- How customers can reduce the impact on their bills
What's happening to business rates
The Revenue Requirements Application (RRA) 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% in the first year and 8.21% in the second year.
BC Hydro filed its RRA with the British Columbia Utilities Commission (BCUC) in February 2008. The RRA is two-year plan covering the period of April 1, 2008 to March 31, 2010 that reflects the cost of energy and operating costs needed over the next two years.
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% 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.
How your rates are determined
The rates your business pays depend on these factors:
- Your demand for electricity. Customers who have an electricity demand of 35 kilowatts (kW) and over are billed on a rate schedule that includes a basic charge, a charge for electricity consumption and a charge for demand. Customers who have a demand less than 35 kW are billed on a rate schedule that includes a basic charge and a charge for electricity consumption.
- Your supply voltage. Hydro supplies its general service customers with electricity either at primary voltage (750 volts or more) or secondary voltage (less than 750 volts).
- The area of the province in which you are located. Customers in Zone II remote locations not connected to Hydro's grid are charged under different rate schedules. Customers in Zone II with demand greater than 45 kVA (kilovolt amperes) may be required to be served under a special contract.
BC Hydro's Business rates apply to most commercial and industrial electricity users in Zone I. Your Hydro bill shows the rate schedule and electricity rates that apply to your business.
Zone I The integrated system served mainly by hydroelectric (water) generation, to which 99% of our customers are connected.
Zone II The non-integrated system (areas with no access to the integrated system) where electricity is generated by diesel and some small hydroelectric plants.
The following rates are as of April 1, 2008. As of this date, a 0.5% Rate Rider* is shown on a separate line on customer bills (not included in the rates below). The 0.5% applies to all charges, before taxes and levies.
*The rate rider is applied to the total of all charges, before taxes and levies. Amounts received from the rate rider will be used only to pay down BC Hydro's deferral accounts. BC Hydro uses these accounts to record unexpected costs and prevent sudden rate fluctuations that could result, for example, from higher-than-forecast market prices for energy.
| General Service (Commercial): Under 35 kW for 2 months | |
| Small businesses such as stores, small warehouses, offices, auto repair shops. Demand is less than 35 kW and a demand meter is not normally installed. Schedule 1220 of the Electric Tariff. | |
| Basic Charge: | 15.48 cents per day |
| All kWh: | $0.0736 kWh |
| Minimum Charge: | The Basic Charge |
| Rate Rider: | 0.5% Rate Rider applied to all charges, before taxes and levies |
| General Service (Commercial): 35 kW and Over for 1 month | |
| Retail stores, medium industry, manufacturing, schools, office buildings, supermarkets. Demand is 35 kW or over and a demand meter is usually installed. Schedules 1200, 1201, 1210, 1211 of the Electric Tariff. | |
| Basic Charge: | 15.48 cents per day |
| Demand Charge: | First 35 kW for NIL |
| Next 115 kW at $3.77 per kW | |
| All additional kW at $7.23 per kW | |
| Energy Charge: | First 14,800 kWh $0.0736 per kWh |
| All additional kWh $0.0354 per kWh | |
| Discounts: | 1.5% on entire bill if customer's electricity is metered at primary potential. |
| $0.25 per kW if customer supplies transformation from a primary to a secondary potential. | |
| If a customer is entitled to both discounts the 1.5% discount is applied first. | |
| Minimum Charge: | 50% of the highest maximum demand charge billed in any month within an on-peak period (1 November to 31 March inclusive) during the preceding 11 months. |
| Rate Rider: | 0.5% Rate Rider applied to all charges, before taxes and levies |
| Industrial: Transmission Service | |
| Mines, chemical plants, large sawmills, pulp and paper mills, large manufacturing. Schedule 1823 Transmission Service, of the Electric Tariff. | |
| Demand Charge: | $5.036 per kVA of billing demand |
| Energy Charge: | $0.02462 per kWh applied to all kWh up to and including 90% of the customer's baseline load (CBL) in each billing year |
| $0.07360 per kWh applied to all kWh above 90% of the customer's baseline load (CBL) in each billing year | |
| Minimum Charge: | $5.036 per kVA of billing demand per billing period |
| Rate Rider: | 0.5% Rate Rider applied to all charges, before taxes and levies |
**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 $0.85 was used. Source for rates: April 2006 Hydro Quebec Survey. B.C. rates effective February 1, 2007 (inclusive of 2% rate rider).
What's happening to the Rate Rider?
As of 1 April 2008, the existing pre-tax rate rider will be lowered from the existing rate of 2% to the proposed 0.5% (subject to BCUC approval). The rate rider will appear as a separate line item on customer bills. Revenue generated by the rider will be allocated to paying down existing debts incurred due to unpredictable events such as storm damage and fluctuating energy prices.
How customers can reduce the impact on their bills
BC Hydro recognizes that any rate increase can be a challenge to customers. However, customers can reduce or completely avoid these increases by changing a few habits and conserving electricity.
We're committed to helping you achieve energy efficiency and sustainability through Power Smart solutions. Power Smart for Business can help you learn about tools designed to enhance your energy management expertise and improve your bottom line through efficient energy use.
