Hydro Rate Jump "A Dishonest Tax Increase"

BC Citizens for Public Power says Government Giving British Columbians an Unwelcome Christmas Gift of Nearly 10% Rate Hike

BC Hydro watchdog group BC Citizens for Public Power says a nearly 10% BC Hydro rate hike announced today is a dishonest tax increase for the benefit of a money-hungry provincial government.

BC Hydro watchdog group BC Citizens for Public Power says a nearly 10% BC Hydro rate hike announced today is a dishonest tax increase for the benefit of a money-hungry provincial government.

In a submission to the BC Utilities Commission (BCU.C.) today, BC Hydro is seeking to raise power rates by 9.23% over the next 18 months. An initial rate increase of 7.23% will hit British Columbians on April 1, 2004 with the next rate increase of 2% to kick in on April 1, 2005 - just before the next provincial election.

Over the last 5 years, BC Hydro has averaged net revenues of $350 million. And both the government and Bermuda-based Accenture have consistently claimed that the privatization of one-third of BC Hydro to Accenture is supposed to save British Columbians $250 million over ten years. In light of the Crown Corporation's consistent profitability and the purported savings of privatization, British Columbians will surely be asking why rates are going up.

"With a record deficit, a promise to balance the budget and a struggling economy, citizens across the province may well see this proposed rate increase as a dishonest tax hike from the government. At a time when so many families are struggling to get by, today's announcement looks like a mean-spirited Christmas present from Premier Gordon Campbell," said John Young, Executive Director of Citizens for Public Power.

While the BC Utilities Commission is now preparing to hold its first rate hearings in ten years, the recent passage of Bill 85 by the BC Liberal government may well undercut the independence of the hearings. That's because the legislation gave Cabinet the power to overrule or disregard BCU.C. decisions.

"Having talked for literally 10 years about the importance of the independence of the BC Utilities Commission, Gordon Campbell and the BC Liberals have now institutionalized political interference in the Commission's mandate to protect the public interest. While rate hearings will presumably go ahead in the coming months, it is not at all clear that Cabinet will respect the Commission's findings with regard to whether or not rate increases are warranted," said John Young.

The timing of the rate increase may lead some to wonder if the government isn't trying to load up bad news revenue measures (i.e. tax hikes) before the upcoming provincial election in May 2005.