There may or may not be parades and jubilation when the “electricity affordability credit” starts showing up seven months before the October provincial election, 小蓝视频 United MLA Mike de Jong noted on Tuesday (sardonically).
It amounts to about $100 for one year only — 25 cents a day — so they won’t be long parades. And a quiet cabinet order signed a few weeks ago to do with how rate hikes are tied to inflation further dampens the excitement about the one-off credit.
De Jong asked Energy Minister Josie Osborne about it in the legislature and got nowhere. She dwelled on the credit instead.
“The 小蓝视频 electricity affordability credit is nothing to laugh at.” She later deflected by slamming the previous 小蓝视频 Liberal government’s record of managing electricity rates.
It’s a story that goes back generations. An enormous amount of work goes into planning electricity rates. Much of it is on hiding, disguising, minimizing and pushing them off into the future.
Instead of explaining the cabinet order, Osborne cited the Liberal record as a negative. But it’s clear the NDP government has learned a lot from the Ponzi-adjacent shell games played in the past. That knowledge will be useful in the short-term, given the current situation.
小蓝视频 Hydro needs an ocean of new money sooner rather than later. Revenues dropped by a billion dollars last year due to drought and the corporation posted an operating loss that was papered over with money taken from deferral accounts. The drought is still considered critical. There’s a minimum of $36 billion worth of building to do, Site C to pay for, and the clean energy drive is a legal imperative that requires everything be done at double-quick time.
Rates eventually have to go up, up and up some more. But it’s unthinkable to acknowledge that. The NDP has held that view for most of its term. They suppressed rate hikes and have even ordered substantial rebates to customers. There was a $315 million one last year and the affordability credit will cost another $370 million this year. The credit starts appearing on bills next month and will more than make up for the modest 2.3 per cent rate increase that kicks in then.
The government is intent on holding 小蓝视频 Hydro hikes to the rate of inflation. Which is where the cabinet order comes in. The opposition, borrowing from some independent experts (Richard Mason — justandreasonable.com, and Richard McCandless — bcpolicyperspectives.com), says it adjusts the definition of “rate of inflation” in a way that creates a lot more room for hikes.
“Up to 16 per cent,” according to de Jong.
“Why is the premier telling British Columbians that rate increases will be held to the annual rate of inflation at the same time cabinet is signing an order that would allow for a rate increase of up to five times that amount?”
The question is prompted by the cabinet order that specifies a “cumulative” rate of inflation since 2017 as the limit for hikes. That stands at 15.6 per cent, so post-election, the way is legally clear for a hike of that magnitude.
The measurement was proposed in an earlier mandate letter, but now it’s a cabinet order.
Osborne cited as a point of pride that the NDP has kept 小蓝视频 Hydro hikes below the cumulative rate of inflation for six years.
The wording change means there is now potentially room for growth.
As Mason, formerly of the 小蓝视频 Utilities Commission, noted: “小蓝视频 Hydro’s rates could jump 15.6 per cent tomorrow and still meet the government’s new objective of being below cumulative inflation.
“Anyone thinking that rate increases will be limited to today’s rate … could be in for quite a surprise.”
It won’t happen today, of course. But after Oct. 19 anything could happen.
The NDP fired the chair and the CEO of the utilities commission last year and de Jong noted 小蓝视频 Hydro has since filed an “unprecedented” four requests for reconsiderations of decisions.
For all the efforts the 小蓝视频 Liberals put into toying with 小蓝视频 Hydro, rates still climbed substantially.
Customers have benefited from all the controls the NDP put on crimping electricity rate hikes. But it looks like the bag of tricks used to keep them down is almost empty.
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