BC Hydro floats a trial balloon that many don’t want to see fly

BC Hydro has developed what in effect will be a two tiered system of hydro payments for the provinces electricity users, a plan that has a number of residents already firing off the letters of intervention.

Hydro intends to charge a base rate for consumption up to 1600 kilowatt hours in the two month billing system, should a user go above that 1600 threshold then a second tier of pricing will kick in, increasing the hydro bill for those that flick the switch more frequently.

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In the best bureaucratic speak, BC Hydro calls the new rate proposal a Residential Inclining Block , described as a two-step rate structure designed to encourage residential customers to conserve electricity. If approved the inclining block plan would come into effect on October 1 of this year.

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The initiative was one of two rate increase applications that Hydro submitted to the BCUC, the second one provided for increases of 6.56 % in the first year and 8.21 % in the second year.

Of concern to many British Columbians however is that this new inclining block fee structure, will in effect punish those that rely on electric heat and electric water tanks for their homes.

Those that will be affected the most have already put forward their objections to the B.C. Utilities Commission, calling on the provincial regulator to turn down Hydro’s application.

The Vancouver Sun had a story posted on the web yesterday outlining the Hydro plans, the backlash that is starting to develop and what Hydro plans to do for those that may face the higher bill every two months…

Hydro's two-tier home rates proposal draws fire
Scott Simpson
Vancouver Sun
Tuesday, June 24, 2008

Some British Columbia residents are expressing anger and alarm about BC Hydro's plan to charge higher rates for customers who use electricity for home heating and hot water.

So far, about five dozen residents from around the province have submitted letters to the B.C. Utilities Commission calling for a rejection of Hydro's proposal for two-tiered electricity rates.
Under the plan, which is still being deliberated by the commission, Hydro would charge a base "tier-one" rate to all customers for a fixed amount of electricity -- 1,600 kilowatt hours in each two-month billing period.

A higher tier-two rate applies for consumption beyond the fixed amount -- people using electricity for heat and water use about 80 per cent more power on an annual basis.

At least 30,000 customers would be affected.

Hydro executive vice-president Bev Van Ruyven said Hydro is developing an array of energy-savings programs that will help customers dependent on electricity for heat find ways to avoid some of the cost of rising electricity rates.

But Van Ruyven noted that B.C. residents who heat their homes with gas are also seeing significant energy cost increases this year.

West Vancouver senior Noah Bowman, who lives with his spouse in half of a duplex, told the commission that about half his annual consumption is above the threshold, despite installing energy-saving appliances and double-paned windows.

If more than half of Bowman's annual electricity consumption is over the threshold, he's looking at paying at least $200 more for power compared to the beginning of 2008.

He doubts he has any opportunities for additional savings.

Bowman said Hydro did not address the impact on customers such as himself when it filed its rate application, known as the residential inclining block, with the BCUC earlier this year.
"Hydro certainly aren't even mentioning the problem faced by people using electricity for heating," Bowman said in an interview.

"I don't have anywhere to go with that, nor do any of these other people who heat with electricity.

"I'm not wasting power. I would like it if they just abandoned the two-tier system or at least greatly modify it."

A Vernon couple voiced a similar concern.

In a letter to the commission, John and Margaret Newlove said they had "no alternative" to electric heat when they built their home, and that it would be "prohibitively expensive" to switch to natural gas.

"I do take strong exception to being charged significantly higher rates than others under the guise of conservation for such a basic need as shelter warmth," the Newloves' letter said.
B.C. Public Interest Advocacy Centre executive director Jim Quail said the two-tier rate "tends to concentrate the hit on people who by and large rely on electricity to heat water and for space heating."

"The general rule of thumb is that customers should not see any more than a 10-per-cent rate increase in one year -- and it shouldn't cause one group of customers to have any more than double the rate increase that other customers have," Quail said.

Van Ruyven noted that Hydro is investing $6 million over the next three years to assist people who rely on electricity for home heating.

The program includes incentives for draft-proofing and improved insulation and heating systems, and offers the services of federally licensed energy auditors at a subsidized rate of $150.