Power-cost surge an unwelcome shock to Island homeowners
It’s lights out for a 30-year-old B.C. Hydro program that sold surplus electricity at a deep discount to thousands of Vancouver Island homeowners. And affected residents are steamed at heating rates they say will more than double in five years, thanks to a B.C. Utilities Commission decision.
The commission decided on Jan. 20 to phase out the E-Plus program because there is no longer surplus power in the system, and the rest of Hydro’s customers are subsidizing the lower rates.
The E-Plus discount was “supposed to last till we all died,” said Oak Bay resident Angus Matthews, 64, one of an estimated 5,000 E-Plus Hydro customers on the Island. There are about 7,500 E-Plus customers in B.C.
The program was started in 1987 by Jack Davis, the B.C. energy minister, to equalize heating costs on the Island and parts of B.C. that did not have access to natural gas, which was available in the Lower Mainland.
Natural gas did not arrive on the Island until 1992, so the E-Plus discount was based on what Lower Mainland customers paid for natural gas. Hydro required households to install backup heating systems, such as oil or propane, to qualify for E-Plus because the surplus electricity might be cut off if required by the system. The commission said E-Plus power has never been cut off.
The commission decision shocked homeowners, as Hydro did not request it, and the E-Plus Homeowners Association did not realize it was under consideration when it made a submission, said association co-founder Gary McCaig.
“We’re quite flabbergasted because the BCUC came down with a much harsher ‘solution’ than anything Hydro was proposing,” he said.
The commission also refused to recognize that E-Plus customers have a contract with Hydro, based on the commission’s view that it alone has the right to set rates, he added.
During the coming five-year phase-out, Hydro will waive the need for E-Plus customers to have alternative heating systems, and they will not face service interruptions, said Hydro spokeswoman Mora Scoot.
The E-Plus rate, which is about twothirds of the regular cost of electricity, was closed to new subscribers in 1990, but could be transferred to someone who bought an E-Plus-rated house until 2008.
Hydro estimated that when the program started, an E-Plus customer would have saved about $300 a year. That has risen to about $700 per year, the commission said, and should not be underwritten by other Hydro customers.
Matthews, who pays about $1,100 a year, estimated the change will cost him up to $400 per year once the E-Plus discount is gone. He uses an “ancient oil furnace with an electric insert,” but installed an expensive gas fireplace as well, he said.
The heating portion of electricity costs for E-Plus customers could go up by 130 per cent, McCaig estimated.
“We are trying to determine if there is any sort of review or appeal process,” he said. “Any solution will likely have to come from the provincial government.”
Hydro had gone to the commission seeking an adjustment to the terms of the discount rate, including greatly reduced warning times for power stoppages.
The fact that E-Plus customers have saved money over the decades does not negate the unfairness of the commission’s decision, McCaig said.
“The bigger issue is that in installing electric heat, because of the promise of a long-term discount, they had missed the opportunity to install alternate systems such as oil or gas that are now more economical than fully priced electricity,” he said.
“E-Plus customers are effectively trapped with a form of heat that is about to become much more expensive for them and expensive by any measure.
“Regardless of whether or not E-Plus customers have received ‘value’ for their investment, we do not accept that alone should be valid reason to break an agreement made in good faith. This kind of thing destroys the public’s faith in the integrity of B.C. Hydro and the way hydro rates are regulated in B.C.”