British Columbia Utilities Commission approves majority of BC Hydro’s proposals on rate design

VANCOUVER – The British Columbia Utilities Commission (BCUC) has issued a decision on Module 1 of our Rate Design Application. Key proposals on residential, commercial and industrial rates were approved, following extensive stakeholder and customer feedback.

BC Hydro filed Module 1 of the Rate Design Application in September 2015, and received a decision from the BCUC on January 20.

Highlights from the decision include:

  • Residential rate structure will remain the same. Residential customers are charged one rate for electricity up to a certain threshold in each billing period, and a higher rate for electricity use beyond that threshold. BC Hydro found that this stepped rate is delivering conservation benefits and is well understood by our customers. The BCUC agreed. In Module 2 of the Rate Design Application (taking place this year), we will be exploring optional rates to help facilitate customer choices that reduce GHG emissions, like electric vehicles.
  • Small General Service rate structure will remain flat.
  • Medium and Large General Service customers will move to a flat rate. BC Hydro proposed this revenue neutral change because it was identified that the two-tiered structure was not well understood and it was not leading to conservation. The BCUC agreed.
  • Transmission rate structure will remain the same.BC Hydro proposed to continue with the conservation rate for industrial customers taking service at transmission voltage. There was strong customer support for this rate.
  • Approved amendments to the Electric Tariff.The BCUC approved changes to BC Hydro’s standard charges to address increases in the costs of delivery and the reality of how we now deliver certain services. For example, the Minimum Reconnection Charge has decreased from $125 to $30, since smart meters have increased the efficiency and cost-effectiveness of reconnections.

Any changes will take effect on Apr. 1, 2017.

The BCUC did not accept BC Hydro’s proposal to adjust the terms and conditions of the E-Plus rate, instead deciding to phase out the rate over five years starting Apr. 1, 2017. This is a special rate that has not been available to new customers since 1990. It provides a 50 per cent discount on electricity used for heating purposes in exchange for BC Hydro having the right to interrupt that service during periods of peak demand.

The BCUC has directed BC Hydro to submit a filing within 30 days of the decision which outlines a proposal to achieve the five-year phase out of the E-Plus rate. During that five-year period, BC Hydro would waive the requirement for E-Plus customers to have an alternative heating system. There also would not be a possibility of service interruption during that time. We are determining the steps that would be involved and will work with our customers to ensure that this is a smooth transition for them.

The BCUC did not support a low income rate proposed by an intervener group on the grounds that the rate would be subsidized by other customers, instead requesting that BC Hydro submit a proposal for a Crisis Intervention Fund pilot program within six months. This pilot would test the concept of a fund to provide support to residential customers who are unable to pay their electricity bills.

The Crisis Intervention Fund is an interesting idea that could provide even more support for customers that are facing difficult circumstances. BC Hydro will work with the BCUC and customers over the coming months to develop a proposal for the pilot program.

The Crisis Intervention Fund would be in addition to the support BC Hydro currently offers low income customers, including:

  • Investing $7.8 million in low income conservation programs over the next three years and more than doubling the number of eligible customers.
  • Offering payment plans for customers that need extra time to pay their bills. For example, this winter season, because we’ve seen record consumption due to colder than average temperatures, BC Hydro is offering a special Winter Payment Plan option that gives residential customers the choice to spread their bill payments over six months.
  • Implementing a number of changes based on feedback from the Rate Design Application like establishing a low income advisory group, delaying disconnections for customers who have a medical reason for requiring power and reducing the Returned Payment Charge from $20 to $6.

For more information on the decision, visit the BCUC website.