VICTORIA — The British Columbia government says BC Hydro customers could see their bills go down for the first time in decades as part of a smaller than anticipated five-year rate hike if approved by an independent regulator.

The Crown utility is applying to the B.C. Utilities Commission for approval and the commission is expected to make a decision early next year, Energy Minister Michelle Mungall said.

“For a lot of people, every dollar counts. So we take that seriously and we’re hoping we can deliver on this rate decrease and that the B.C. Utilities Commission will approve it,” she said in an interview Friday.

The proposal would see a rate decrease of one per cent in April 2020, an increase of 2.7 per cent in 2021, a decrease of 0.3 per cent in 2022, followed by an increase of three per cent in 2023.

That would mean an overall rate hike of 6.2 per cent over the next five years. It’s a drop from the eight per cent announced by Mungall in February after a report found customers would be on the hook for $16 billion over the next two decades.

That report, commissioned by the NDP government, found the former Liberal government manufactured an urgent need for electricity but restricted BC Hydro from producing it, forcing the utility to turn to private producers and sign long-term contracts at inflated prices.

The new application is based on BC Hydro’s latest audited fiscal 2019 financial results and the most recent financial forecast. They reflect higher than anticipated income from BC Hydro’s trading subsidiary Powerex and lower than expected forecasted debt financing costs and purchases from independent power producers, the ministry said.

“As a result of our updated financial forecast, we’re in the unique position to apply for a rate decrease for our customers that would start on April 1, 2020, if approved by the B.C. Utilities Commission,” Chris O’Riley, BC Hydro’s president and chief operating officer, said in a statement.

“We’re committed to continue to work with government and the B.C. Utilities Commission to keep rates affordable while ensuring we continue to provide safe, reliable power to the province.”

Greg Kyllo, the B.C. Liberal critic for BC Hydro, questioned why the proposal would see rates yo-yo between increases and decreases each year.

“Ratepayers I think across the province would like to see consistency and have a look at having rates normalize,” he said.

“To see a reduction in rates one year only to see them go up as significantly the following year, it’s a little bit cold comfort to British Columbians and a bit of smoke and mirrors with respect to what’s really happening.”

He also questioned whether the proposed decrease in 2020 was coming directly from BC Hydro or from the NDP government’s cabinet table.

“Maybe they’re looking for a spring election,” he said.

B.C.’s auditor general Carol Bellringer said in February that BC Hydro had amassed $5.5 billion in 29 deferred expense accounts, of which some are scheduled to be repaid over 40 years.

The NDP government wrote off $1.1 billion in deferred expense costs on BC Hydro’s books to reduce the burden on ratepayers, Mungall said.

“That was a one-time write off to deal with some of the debt at BC Hydro that was incurred under the previous Liberal government,” she said.

“That’s what brings us to this point where we can actually apply for a rate decrease,” she said, adding that it’s part of a broad financial management strategy.

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The new plan would not see BC Hydro take on any additional debt, she said.

The utilities commission has already approved an interim net bill increase of 1.8 per cent for 2019-20, which came into effect April 1 as part of BC Hydro’s fiscal 2020-21 revenue requirements application.

Mungall said she’s hopeful the utilities commission will approve the request, even though it rejected the government’s previous request to freeze rates.

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