On March 8, 2024, the BCUC approved BC Hydro’s request to finalize rates for its residential customers in fiscal year 2025, beginning April 1, 2024.
In this article we look at the process the BCUC used to approve the decision. A separate article explains the decision itself, and how the increase in rates does not translate into an increase in bills.
The BCUC regularly reviews what BC Hydro calls “pricing principles”. The pricing principles are the formula by which a general rate increase approved by the BCUC, 6.42 percent in the case of fiscal 2025, is applied to the three components of BC Hydro’s residential rate (a daily basic charge and two stepped variable rates).
The pricing principles are not a mere bookkeeping exercise. In fiscal 2025, the 6.42 percent general rate increase became a 12.51 percent increase for BC Hydro’s Step 1 variable rate, which most of the utility’s residential consumers pay most of the time. These decisions can have serious effects on people’s bills.
BC Hydro is financially indifferent to the outcome, because the decision aims to give the utility the same total revenue regardless of how the general rate increase is applied. However, as with all rate design decisions, there are winners and losers among BC Hydro’s customers, which makes the decisions controversial.
The BCUC reached this decision ten days (eight working days) after receiving the application from BC Hydro, dramatically quicker than the recent equivalent decisions:
| Year | Application date | Final decision date | Days |
| Fiscal 2025: | February 27, 2024 | March 8, 2024 | 10 |
| Fiscal 2024: | March 8, 2023 | June 13, 2023 | 97 |
| Fiscal 2023: | February 11, 2022 | July 25, 2022 | 164 |
| Fiscal 2021/2: | February 13, 2020 | March 26, 2020 | 42 |
How was this decision made so quickly? Is the BCUC suddenly becoming much more efficient?
In the most recent pricing principles decision, the BCUC did not seek any public involvement. Unlike the three previous proceedings, there was no opportunity for the public or intervener groups to review and comment on the application. The BCUC didn’t notify anyone it had received the application, so no-one even knew the BCUC was considering it.
Further, the BCUC appears to have asked no questions of BC Hydro about the application, as it did in all three previous proceedings. For a decision that increases the Step 1 rate paid by the majority of BC Hydro’s residential customers by 12.51 percent, this lack of curiosity is quite remarkable.
Finally, the BCUC issued no reasons for its decision, as it has done previously. The BCUC is only legally obliged to provide reasons when an application is opposed (section 124 of the Utilities Commission Act), but it’s pretty hard to oppose a decision when it’s published before you knew it was going to be made. We don’t know why the BCUC made the decision it did, or what factors caused it to reject other alternatives.
BC Hydro “respectfully” asked for a decision by March 11, 2024, in order to update its rates by April 1, 2024, and the BCUC helpfully obliged. But this is not a good reason to rush the decision. The BCUC can set interim rates, allowing the utility to start charging the new rate, subject to later adjustment if necessary. Indeed, this is exactly what the BCUC did on all three previous occasions.
This appears to be an example of BCUC’s recent efficiency drive, taken to a rather extreme level. As we previously warned, this is leading to a reduction in public involvement in the BCUC’s decision making.
Are there any other possible explanations for the BCUC’s unseemly haste?
In last year’s pricing principles decision, the Minister of Energy, Mines and Low Carbon Innovation wrote to the BCUC requesting that it not apply “purely economic considerations” when setting BC Hydro’s rates for fiscal 2024, but instead asked them to “protect people – especially low-income households – who are struggling to pay today’s higher prices.” The BCUC rejected the Minister’s request, and made its decision based on regulatory principles. Three months later, the BCUC Chair was replaced.
This year, the BCUC just did exactly what it was asked.