Negotiated Settlement Agreement
Summary of the Negotiated Settlement
The Negotiated Settlement Agreement [PDF, 790 KB] impacts customer bills as follows:
- The initial interim rate increase of 4.65% was changed to 1.54%
- Customers have been paying the initial interim 4.65% increase since July 1, 2006.
- Their bills will be calculated using the 4.65% rate increase until January 31, 2007.
- According to the settlement, the final rate increase will be 1.54% instead of 4.65%.
- That means customers will be refunded the difference between 4.65% and 1.54%, with interest, for the period covering July 1, 2006, to Jan 31, 2007.
- Customers will see a refund as a credit adjustment, with interest, on bills in the April/May 2007 billing cycle.
- The rate increase of 1.54% will change to 1.64% in February 2007
- The 1.64% rate is effective February 1, 2007, to March 31, 2008.
- This represents a 0.10% increase over the prior period (i.e., July 1, 2006, to January 31, 2007).
- A separate “rate rider” increase of 2% was approved
- Rate rider is effective February 1, 2007, to March 31, 2008.
- Customers will see this as a separate line item on their bills.
- Amounts received from the rate rider will be used to pay down BC Hydro’s deferral accounts. Deferral accounts are used by BC Hydro to defer unexpected costs so that customers do not face sudden rate fluctuations, for example, resulting from higher-than-forecast market prices for energy.
- The combined effect of the rate change February 1, 2007 plus the rate rider will be an increase of 3.64% above the rate prior to the interim increase of July 1, 2006, which is a decrease of 1.01% from the amount with the interim increase, which remains in effect till January 31, 2007.
The Revenue Requirements Application was intended to address the gap between existing supply and the growing demand of our customers. The rate increase will help BC Hydro upgrade our existing system and purchase the additional power needed to ensure that we continue to provide reliable power, at low cost, for generations.
Even with the approved increase, BC Hydro customers will continue to enjoy among the-lowest electricity rates in North America. We know that our customers value our low and stable rates, and our aim is to ensure low rates well into the future.
This is only the second rate increase in the last ten years. Revenue Requirements Applications will be made every two years from now on.