Minister of Energy and Mines
WHEN Premier Christy Clark asked me to become the Minister of Energy and Mines, she instructed me to do everything possible to spare families in this province from a forecasted electricity rate increase of more than 50 per cent over five years.
Since then, I have been working hard to keep rates low for all British Columbians.
One of my first steps as minister was to appoint a panel of senior officials to review BC Hydro and develop options to reduce the impact of electricity rate increases on B.C. families in April 2011.
Our government's work began with the comprehensive administrative and financial review of BC Hydro that was released last August. It laid out a plan to enable us to reduce the proposed rate increases by 50 per cent, while allowing us to make the capital investments required to reposition ourselves for the future.
On Nov. 24, 2011, BC Hydro requested that B.C. Utilities Commission confirm the reduction. The commission approved an interim rate increase of 3.91 per cent, plus a 2.5 per cent increase to five per cent on the rate rider for a total cumulative increase of 7.1 per cent.
The following spring, the commission concluded that more discussion would be required before making a decision on final rates. As a result, this conclusion would not come until two years into a three-year rate period. This process had already generated 24,000 pages of evidence and responses to 4,200 information requests - costing BC Hydro ratepayers $1.3 million. It was expected to generate another $2.1 million in legal fees and other costs.
As the accountable and elected minister, I concluded the clock could no longer continue to tick. It was abundantly clear that to let further process occur would not be in the best interest of British Columbians, and a decision was required for the provincial government to fulfil its commitment to keep electricity rates as low as possible.
On May 24, 2012, our government directed B.C. Utilities Commission to implement the 50 per cent reduction in BC Hydro's proposed rates over three years. This has successfully curbed the total increase of about 17 per cent, including a 1.44 per cent increase next year.
Our decision ensures families will continue to pay among the lowest electricity rates in North America. It also allows BC Hydro to reduce their regulatory accounts by more than $250 million over the next two years. As well, we are working closely with BC Hydro to further address expected growth in the regulatory accounts over the long-term.
Direction to the commission is nothing new. Since 1981, the province has issued 11 directions.
Moving forward, the utilities commission will also continue to regulate our public utility and scrutinize BC Hydro projects like the Dawson Creek/Chetwynd Area Transmission reinforcement project, John Hart Dam Generating Station replacement, and the Ruskin Dam upgrade project.
Some have criticized our government's commitment to keeping rates low. But ours is the responsible approach. It will ensure ongoing delivery of reliable power and, it will enable us to create valuable jobs for families while we grow our economy.
The financial health of BC Hydro was recently confirmed with superior credit ratings of AA high by Dominion Bond Rating Service and a Triple A rating from Moody's Investors Service. That confirms BC Hydro has the capacity to pay its long-term financial obligations.
We're working hard to create a brighter future for our province and BC Hydro is an important part of that future. Our path forward is to keep rates affordable and renew our grid so it can benefit us both today and tomorrow.
