BC Hydro deferral accounts at $5.5 billion, says rate review by auditor general
Posted February 6, 2019 11:31 am.
Last Updated February 6, 2019 6:41 pm.
This article is more than 5 years old.
VICTORIA – Auditor general Carol Bellringer says BC Hydro has deferred $5.5 billion in expenses that it plans to recover from ratepayers over time.
Bellringer focuses on the deferred expenses in a report on the public utility’s use of rate-regulated accounting to control the prices it charges customers.
She says rate-regulated accounting is used widely across North America, but cautions that the government has largely overridden the role of the independent B.C. Utilities Commission to regulate rates.
“While rates are expected to increase no one can predict exactly what the impact will be because it depends on how well by hydro manages its affairs and as all of the future events impacting its operations,” Bellringer adds.
But she notes some changes are being made, “the removal of the requirement for BC Hydro to produce financial statements in a way that is different from normal accounting has been removed and that’s a big step forward.”
However, she says it’s hard to say how moving away from deferring costs, as has been done, will affect individual ratepayers.
If we had to pay off that $5.5 billion today it would cost each home $1,300, $10,000 for each small commercial business and nearly $5 million for large industries.
Last June, the B.C. government launched a two-phase review of BC Hydro to find cost savings and look at the direction of the Crown utility.
The review came shortly after a planned government rate freeze was overturned by the utilities commission, which resulted in a three per cent rate increase in April 2018.
A statement by BC Hydro and the government says a key objective of the review due this month is to enhance the regulatory oversight of the commission.
Speaking on behalf of the B.C. government, Bruce Ralston says the NDP is doing everything it can to “clean up the financial mess that the BC Liberals left.”
“It will take time but we’ve taken some strong first steps and the Auditor General supports those.”
He says the provincial government will continue its commitment to keep rates affordable for British Columbians.
Ralston says a broader report on BC Hydro governance will be coming late this month.
