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The move marks further intervention by the province

The move marks further intervention by the province in the regulatory process and further undermines the independence and credibility of the BCUC. The NDP had promised on the campaign trail to improve the regulatory process and restore the independence of the BCUC. Instead, the decision to freeze rates — another campaign promise — only makes the situation worse.

In 2013, the government introduced a 10-year plan that directed what level of rate increases the BCUC was allowed to approve for BC Hydro over the first five years. Because those rate increases were below BC Hydro’s cost to generate and deliver power, the difference between rates and costs went into deferral accounts. The price that ratepayers now pay is largely a political determination.

Undercharging consumers will encourage wasteful consumption and lead to the overbuilding of the energy system. Megaprojects like the $10-billion (and counting) Site C dam — which a recent review by the BCUC concluded wasn’t needed, even though $2 billion has already been spent on construction — would be even more unnecessary if consumers paid a rate for power that reflected the cost of generating it.

Undercharging consumers will encourage wasteful consumption

And this same story has already been written in Ontario. This summer, the province passed the Fair Hydro Act, which allows the minister of energy to set electricity rates as he sees fit. Prior to the legislation, the province’s regulator, the Ontario Energy Board (OEB), forecast the cost of generating electricity and then set rates to fully recover those costs. The price consumers paid for power reflected the “real” cost of generating it.