The dog days of summer are a good time to think ahead to the fall. From financial results to legislative changes, it will be a busy time for BC’s electricity sector.
Introduction
It’s too hot right now to get worked up about the rather thin news on BC’s energy front these days. But it is a good time to think ahead about what might be around the corner.
Whether you are interested in getting a head start on a developing news story, or looking to hold the government to account (the next legislative session starts October 5), here are some things to watch for.
BC Hydro financial results
BC Hydro usually publishes its annual reports at the end of August (this date aligns with the annual report of its owner, the provincial government). Despite reduced transparency in recent years, there are usually some nuggets for BC Hydro watchers.
Keep an eye out for whether BC Hydro is still a net importer of electricity. The utility spent nearly $2 billion on imported electricity in the previous two years, thanks to the multi-year drought which reduced its ability to generate enough of its own hydro electricity. The 2025/26 year may be no exception.
The April 1, 2025 snowpack, an indicator of water availability for the 2025/26 year, was 21 percent below normal levels – problematic, but better than the previous year’s figure of 37 percent. Despite this improvement, BC Hydro may still have been forced to spend more on electricity imports last year, which will add to customers’ bills next year.
BC Hydro’s operating expenses have been growing fast in recent years, only partly explained by the new John Horgan (Site C) dam coming into service. Other operating costs, such as materials and personnel costs, have been rising significantly above the rate of inflation, and these costs directly feed future rate rises.
The government uses profits from Powerex, BC Hydro’s energy trading subsidiary, to subsidize electricity rates. But current electricity rates are based on a very rosy forecast for trading profits. If Powerex doesn’t deliver on the forecast, the difference will be paid for by BC Hydro customers next year.
Lastly, there’s always the possibility the Auditor General has something interesting to say. Ten years ago the provincial accounts were “qualified” because the Auditor General didn’t trust the numbers – costs recorded in BC Hydro’s deferral accounts were directed by the previous Liberal government rather than approved by an independent regulator, as they should be.
This appears to be happening again. Over $1 billion seems to have been recorded in BC Hydro’s deferral accounts by order of the current government without approval by the BCUC. This “directing its own bottom line”, as the Auditor General referred to it in 2019, conveniently reduces the size of the annual provincial deficit. Will she have anything to say this year?
BC Hydro rates
We should expect to see an application filed shortly with the BC Utilities Commission (BCUC) for BC Hydro’s rates starting in April 2027.
The increases of 3.75 percent per year for the last two years were probably insufficient even with what we knew then. For the reasons I just explained, it’s likely electricity rates will need to rise even more than they did in the last two years.
The government made a brave promise in 2024 that BC Hydro’s rates would “not exceed cumulative inflation”. It did give itself plenty of wiggle room, though, by picking a convenient base year of 2017 for the calculation. Rates would probably have to rise by 10 percent or more before any embarrassing explanations are required, but the wiggle room is shrinking.
It will also be interesting to see whether the government even allows the BCUC to set BC Hydro’s rates for next year.
Since around 2019, the BCUC has set BC Hydro’s rates based on economic and regulatory principles, as it does for other energy utilities. This followed a long period of meddling by the previous (Liberal) government, which kept rates for the provincially owned utility artificially low, leading to a billion dollar taxpayer bailout.
The incoming NDP government vowed in 2019 to “take the politics out of decisions around BC Hydro” and “enhance BCUC’s independent oversight” of BC Hydro. Their enthusiasm for independent regulation didn’t last long, though, and last year the government elbowed the BCUC out of the way and set BC Hydro’s rates for two years (ending March 2027).
Having next year’s electricity rates set independently would allow the government to distance itself, to some extent at least, from any bad news. But a review by the BCUC might keep that news in the public eye for an extended time. The worse the news, the more the government might be tempted to bury it quickly.
Upcoming legislative changes
The government recently announced that BC Hydro is “in the early stages of exploring two potential large hydroelectric projects”, and I gather Energy Minister Adrian Dix has since mentioned that this would require legislative changes.
He probably refers to the Clean Energy Act, which prohibits BC Hydro building at Site E or on the Homathko River, the two proposed sites. BC Hydro is also prohibited from buying electricity from any facility in a “park or protected area” (such as the Homathko Estuary Park or the Homathko River Protected Area).
If we are updating the Clean Energy Act, it is an opportunity to make other changes as well. The government should remove the objective of avoiding the use of nuclear power.
As I argued nearly two years ago, nuclear power could eventually provide BC with large amounts of reliable power to serve new industrial facilities and data centres, and to support the government’s plans to electrify the rest of the economy. Since then, a new Prime Minister has announced a national nuclear strategy with renewed focus on the entire supply chain from uranium mining and processing to both small modular and large scale reactors. There’s also the carrot of potential federal funding for participating provinces.
If we’re just at the evaluation stage, it seems foolish to ignore this option entirely.
Unless, of course, the provincial government’s intent is to leave nuclear power to our neighbours and just import electricity from them when we’re short, as we currently import electricity generated in the US from natural gas (ironically some of it generated from exported BC gas).
BC Hydro 2025 Integrated Resource Plan
Finally, be on the lookout for a decision from the BCUC on BC Hydro’s 2025 Integrated Resource Plan, which could be issued as early as September.
BC Hydro’s original filing was pretty thin, and evidence updated during the proceeding showed its electricity shortages are worse than originally feared. There still appears to be no plan for how BC Hydro would generate enough electricity to achieve the government’s climate goals by 2050 and to serve the new customers on the proposed North Coast Transmission Line.
It’s not even clear that BC Hydro has met its Clean Energy Act obligation to plan for electricity to be generated entirely by “facilities within the Province”. The BCUC must assess this self-sufficiency requirement as part of its review. It could start by asking itself why BC Hydro hasn’t included forecasts for the first four years of its 2025 Integrated Resource Plan, as it did in past plans, and as other utilities do in their plans. Was there something about those years BC Hydro didn’t want examined?
The BCUC’s review of the 2021 Integrated Resource Plan was weak, failing to criticize BC Hydro for that plan’s obvious failings. It will be interesting to see whether the BCUC takes a more robust approach this time around.
Conclusion
I hope this has whetted your appetite for the upcoming electricity news season in BC. Just and Reasonable will be on a slower schedule over the summer, along with almost everyone else, but even as I write this I see a government news release that bears closer inspection.
Stay tuned…