Tariff Supplement No. 6 (or TS6) is the template Facilities Agreement for BC Hydro’s industrial customers. It governs who builds, owns, operates and pays for transmission and other infrastructure when a customer wants to connect to BC Hydro’s system.

While Tariff Supplement No. 6 was approved by the BC Utilities Commission (BCUC), it remains just a template. Each customer’s individual agreement with BC Hydro may also need to be approved by the BCUC since it contains the specific rate they pay for using the utility’s facilities.

As its name suggests, Tariff Supplement No. 6 is supplemental to other aspects of BC Hydro’s tariff for industrial customers. There is also a Tariff Supplement No. 5, a template Electricity Supply Agreement.

History

Tariff Supplement No. 6 was originally approved in 1991, following efforts to standardize BC Hydro’s industrial customer contracts that started in 1982. Work on the Facilities Agreement started in 1987. It was a negotiated settlement between BC Hydro and a consortium of industrial customers.

In 2012 the BCUC recommended a review of Tariff Supplement No. 6, which it said was “significant and urgent.” But then government issued Direction 7 to the BCUC, which limited the BCUC’s ability to set transmission rates (Direction 7 was repealed February 2019).

In 2024, the government’s Clean Energy Strategy suggested it would find “innovative approaches” to “protect existing BC Hydro customers from rate increases”, among other things. This might include “changes to pool customer contributions for new transmission lines across multiple customers”.

In a February 2025 decision, the BCUC ordered BC Hydro to file an application to review Tariff Supplement No. 6 by September 30, 2025. BC Hydro later applied for and was granted an extension to submit its application by April 30, 2026.

In a July 2025, BC Hydro suggested it wants to cover “all system reinforcement costs” itself, which would likely pass more costs of connecting new loads on to existing customers, but that there would be a “safety valve” for “extraordinary costs”.

The tariff

Under BC Hydro’s Tariff Supplement No. 6 (Facilities Agreement), industrial customers wishing to connect to BC Hydro must pay for:

• Their own transmission line to reach BC Hydro;
• BC Hydro’s “Basic Transmission Extension” (or “line tap”) of up to 90 metres, paid over time as the service us used but subject to financial security provided by the customer; and
• A share of any “system reinforcements” to BC Hydro’s existing facilities needed to bring power to the customer.

System reinforcements

System reinforcements are additions and alterations to existing BC Hydro transmission and substation equipment, required to supply electricity to a new transmission connection. These reinforcements can include investments in new generation facilities if the new load exceeds 150 MVA.

Prior to Tariff Supplement No. 6 coming into force, new customers paid the whole amount. Now, customer’s system reinforcement costs are reduced by an amount known as an “offset” (the remainder must be paid upfront).

The size of the offset is calculated by BC Hydro, according to this formula:

According to this formula, customers get relief from paying the following amounts of the system reinforcement required to connect them:

• 7.4 times the annual net revenue they will pay BC Hydro, after operating costs;
• Half of the annual depreciation of the system reinforcement costs (if a $1 billion reinforcement were depreciated over 50 years, the annual depreciation would be around $20 million); and
• Other benefits to BC Hydro’s system, “as determined by BC Hydro”.

Financial security

The customer must provide financial security for the value of their offset, and if it buys less electricity than it promised, BC Hydro may keep some of the security instead.

The financial security for the offset is gradually reduced based on the customer’s actual revenues, typically over 8 years if revenues turn out as planned. Any remaining security is forfeit if the plant closes or after 12 years.

Some portion of the security for the reinforcement may be refunded to the customer if other customers use the same system reinforcements within five years.

Policy issues

The BC government has a transmission contribution policy document available online that describes the dilemma between being fair to existing customers and subsidizing “economic development in remote regions”.

There is also a generation contribution policy document that explains how, prior to Tariff Supplement No. 6 coming into force in 1991, new industrial customers did not pay for the cost of new generation. This policy was to encourage electricity use at a time when BC Hydro had surplus energy. The 150 MVA threshold in Tariff Supplement No. 6, introduced in 1991, was set based on the cost of adding a new gas-fired generation plant.

The 150 MVA threshold “is an attempt to insulate existing ratepayers from large rate increases should an extremely large industrial customer interconnect to the BC Hydro system.”