Anyone who’s followed my work on electricity had to expect that a story like this was coming. Being a local paper, you get a little more time to localize the story and focus a little deeper on extensive reports like the BC Hydro Rate Review.
Initial rate increase would have cost company an extra $1 million annually; rate cut means it only costs an extra $500,000
By Jesse Ferreras
A provincial government order to cut hydro rate increases will save Whistler Blackcomb up to $500,000 in annual power bills.
“That’s a good move,” said Doug Forseth, senior vice-president of operations at Whistler Blackcomb of the cuts.
Following a rate review, the results of which were announced last week, BC Hydro will cut its planned increase from 32 per cent to 16.6 per cent over three years.
Forseth said that if the power authority had gone with its initial increase, the cost to Whistler Blackcomb would have been an additional $1 million every year. With the cut, it only comes up to about $500,000.
“It’s a big chunk of change for a large business like ours,” he said. “Sixteen per cent is a large increase for anybody that has a hydro bill.”
The report also showed that BC Hydro’s staffing levels grew 41 per cent between 2006 and 2010.
The review panel, consisting of three public servants, said the Crown corporation’s full-time equivalents grew from 3,976 employees to 5,615, with an engineering department that had grown to six times the size of that belonging to B.C.’s Ministry of Transportation and Infrastructure, which boasts a similar capital program.
“While there has been a strong focus on being the best, there has not always been a focus on cost-efficiency,” said Cheryl Wenezenki-Yolland, one of the panel members.
“The explanations were that there was a renewed focus on maintenance, capital investment and demand increases for energy. However, they also acknowledge that those full-time equivalent increases were not monitored, not controlled, so we saw excessive amounts of duplication.”
The panel suggested 4,800 employees as an appropriate staffing level for BC Hydro – cuts, it said, that could help claw back the projected rate increase from 32 per cent to 16.6 per cent. Rates will go up by eight per cent in 2012 and 3.9 per cent in 2013 and 2014.
The rate review also provided a glimpse into the true cost of energy from independent power producers (IPP’s).
The review indicated in a section covering energy acquisitions that electricity from the private sector, such as run-of-river projects located throughout Sea to Sky, costs more than twice the most expensive energy that can be acquired through market purchases.
The report states that the cost of energy from the 2008 Clean Power Call is $124 per megawatt hour, more than the most expensive market rate of $52.43 per megawatt hour and still more than the most expensive estimate for power from Site C, which at $95 per megawatt hour would likely be the priciest electricity from a public source.
Susie Gimse, chair of the board of directors for the Squamish-Lillooet Regional District and a councillor with the Village of Pemberton, said BC Hydro and the companies building such projects should do more to ensure that the communities hosting IPP’s should benefit from them directly.
“My view is if we’re generating power in an area, that area should benefit with reduced rates,” she said. “If you look at those areas that have IPP’s up and running, there should be a direct benefit to those communities. The most obvious one would be a reduction in hydro rates.
Asked whether British Columbians are paying too much for electricity from private sources, Joan McIntyre, MLA for West Vancouver-Sea to Sky, said that B.C.’s power rates remain low compared to prices throughout North America.
“If you look at the comparison of our rates, we’re the third lowest in North America,” she said. “We have had huge strength over the years in attracting investment and business to the province based on our low hydro rates and one of the goals of BC Hydro, who is using both private and public sources, has been to keep the rates low.”