Editorial: Don’t be fooled by artificially low Hydro rates.

Premier Christy Clark may believe she is protecting British Columbians by ordering the B. C. Utilities Commission to set rates artificially low. But we should not be fooled.

Clark — then a candidate for the Liberal party — ran on a platform that recognized that political interference was harmful to the crucial work of the Utilities Commission. What was true then is true now.

Her decision to effectively shut down a major review of the real effect of financial decisions taken by Hydro management with the approval of the provincial government is exactly the kind of interference that over time can only hurt consumers and the B. C. economy, which depends on a rationally priced, reliable energy supply.

Last fall, B. C.’ s auditor- general sounded the alarm about $ 5 billion in deferral accounts that are artificially inflating Hydro’s bottom line. The accounting trick allows the reckoning for money spent in a current year to be deferred to sometime in the future so that it doesn’t have to be recovered through an immediate increase in electricity rates.

The province ordered the utilities commission to set an increase of 17 per cent over the next three years. Hydro had filed thousands of pages of documents justifying its request for a 32.6- per- cent increase. Even at that, Hydro’s increase did not include a plan to cover the deferral accounts, which added to Hydro’s debt while allowing the province to continue to siphon off a surplus that existed only as a result of an accounting trick.

That trick, like the decision of Clark’s government to override the utilities commission, may be keeping rates lower than they would otherwise have to be for now, but it does nothing to lower costs. Those costs will eventually have to be paid.

The point of a deferral account is to smooth out rate increases. The way they are being used, however, has turned them into an inter- generational transfer. Clark is “protecting” today’s consumers by shoving a large burden onto their children and grandchildren.

During the 1990s, the NDP passed on a similar burden in the form of deferred expenditures. Hydro’s network was allowed to deteriorate and necessary expansion was put off.

[ Premier Christy] Clark is ‘ protecting’ today’s consumers by shoving a large burden onto their children and grandchildren.

The Liberals have undertaken that work, with billions in capital projects, including the controversial smart meters.

But now they are following the same path of denial by trying to avoid paying for the work that they have at least recognized was necessary to undertake.

Part of the tragedy in this is that the increases necessary to put BC Hydro on a sound economic footing are affordable. B. C. has some of the lowest electricity rates in the world. Adjusted for inflation, they are lower now than they have been in the past several decades.

Higher rates would neither overly burden consumers nor undermine our competitive advantage for industrial consumers. What we can’t afford is to allow our capacity to produce and deliver the electricity we need to fall behind current or projected demand.

And we can’t pretend for long that we can maintain that capacity without paying for it. We can either pay for it through our electricity rates or, as the NDP did in the 1990s with BC Ferries, by transferring Hydro debt to taxpayers.

While that route may have some attraction, given that the artificially inflated Hydro profit over the past several years has allowed the provincial government to provide a benefit to taxpayers that wasn’t earned, it should be rejected.

We need a fresh start. We need an admission that with electricity, as with most things, there is no free lunch. We have an appetite for power that must be fed and someone will have to pay the bill, either now or in the future.

The B. C. Utilities Commission would have made that point. It should have been allowed to do its job.