Time-of-use Hydro pricing concerns energy minister
VICTORIA — B.C.’s energy minister is not rushing to embrace a suggestion by the B.C. Utilities Commission that the province introduce time-of-use electricity pricing as part of any alternative to the Site C dam. Michelle Mungall said Thursday said she’s concerned that pricing based on the time of day that people use electricity would unfairly drive up bills.
“When would you actually increase rates in terms of time of use? Would you do it over peak times when everybody is using it? Well, then you would be increasing people’s rates,” Mungall said in an interview.
A utilities commission report into Site C released Wednesday concluded the $8.3-billion megaproject will miss its scheduled 2024 completion, faces many internal problems, and the cost could balloon to as high as $12.5 billion. The commission said alternative energy sources, such as wind and geothermal, combined with measures to cut industrial power use and with time-of-use pricing for residential customers, could reduce demand on the power grid and provide the same energy as Site C at equal or lower cost.
Hydro spent more than $1 billion to install so-called smart meters in most homes in the province starting in 2010. The digital meters would allow the company to charge customers different rates at different times of day — for example, a higher rate for customers who use electricity during dinner hours when the demand on the grid is particularly high. Supporters say it would help smooth out electricity demand, by giving customers incentives to do laundry and other high-energy activities in off-peak hours. Critics say it simply penalizes households with higher bills for ordinary activity.
The previous Liberal government refused to explore time-of-use pricing, fearing a political backlash from users. Mungall said the idea could be just as unfair as Hydro’s existing two-tier pricing, which hits customers with higher rates after a certain amount of use and disproportionally penalized rural B.C. householders during last year’s cold winter.
“My concern with time-of-use rates is what we’re finding out with two-tiered rates, which is once you hit a certain threshold your rates go up,” said Mungall. “Should people be punished simply because it’s a cold winter?”
But the government’s caution over time-of-use pricing could make it harder for Premier John Horgan’s cabinet to compare the utility commission’s alternatives to Site C, as the government makes a decision by the end of the year on whether to cancel the dam.
Utility commission chairman David Morton said “aggressive” steps to reduce electricity demand would be required, but that timeof-use pricing could simply involve providing rebates to customers who use energy during off-peak times.
Mungall said she’s not enthusiastic about that idea either. “The reality is there’s administrative costs for any type of rebate system,” she said.
Meanwhile, First Nations and environmental groups gathered outside the legislature Thursday to protest the Site C project and call on the NDP to cancel it.