REGULATOR'S `EFFICIENCY DRIVE' COMES AT A COST
Utilities commission is kowtowing to NDP after it was defanged by change at the top
When Premier David Eby fired the chair of the B.C. Utilities Commission (BCUC) last year, he did so after vowing to “better align” the independent regulator with NDP “government priorities.”
We got a hint of what that might mean earlier this month when the commission rubber-stamped B.C. Hydro's latest rate request in a mere 10 days, no questions asked.
Hydro applied to the commission on Feb. 27 asking for permission to proceed with a previously scheduled basic rate increase of 6.42 per cent starting April 1.
The utility “respectfully” requested that final approval be granted by March 11, allowing the change to be incorporated into electricity bills starting next month.
On March 5, BCUC chairman and CEO Mark Jaccard, Eby's hand-picked replacement for the ousted David Morton, was appointed as a one-man panel to review Hydro's application.
On March 8, Jaccard granted final approval for the 6.42 per cent increase, three days ahead of Hydro's preferred deadline.
The news release from the commission relayed Hydro's expectation that the rate increase would be diminished by other factors, most notably the $100 electricity affordability credit announced in the NDP government's February budget.
“B.C. Hydro states that it expects all customers to have bill decreases beginning as early as April 1,” said the commission.
Still, the commission's decision to fast-track Hydro's request has drawn a critical response from former BCUC member Richard Mason.
Mason resigned from the commission last September, a few days after Eby fired Morton. Lately Mason has been posting critiques of the commission's work at Just and Reasonable, a public interest website ( justandreasonable.com).
“The BCUC reached this decision 10 days after receiving the application from B.C. Hydro, dramatically quicker than the recent equivalent decisions,” Mason wrote last week.
The commission took 97 days to review the request Hydro submitted in 2023 and 164 days for one filed in 2022. The BCUC didn't allow any opportunity for the public or intervener groups to review and comment on the latest application, as was done in the past.
That's hardly surprising, says Mason.
“The BCUC didn't notify anyone it had received the application, so no one even knew the BCUC was considering it. Further, the BCUC appears to have asked no questions of B.C. Hydro about the application.
... This lack of curiosity is quite remarkable.”
Jaccard wrote that he had reviewed the application and determined that approval “is warranted” on principles adopted earlier.
The commission is obliged to provide a detailed rationale only when an application is opposed, concedes Mason. “But it's pretty hard to oppose a decision when it's published before you knew it was going to be made.”
The former commissioner also took a dim view of the commission's timing.
“B.C. Hydro respectfully asked for a decision by March in order to update its rates by April 1 and the BCUC helpfully obliged.”
The commission didn't have to submit to Hydro's timetable.
“The BCUC can set interim rates, allowing the utility to start charging the new rate, subject to later adjustment if necessary. Indeed, this is exactly what the BCUC did on previous occasions.”
This latest decision “appears to be an example of BCUC's recent efficiency drive, taken to a rather extreme level,” wrote Mason. “This is leading to a reduction in public involvement in the BCUC's decision-making.
This time last year, the premier appointed Jaccard to an energy task force, one of whose objectives was “modernizing B.C.'s energy regulatory framework and the utilities commission to better align with government priorities around economic development and climate action.”
Then, in September, Eby installed Jaccard at the head of the commission. The mandate letter from the government declared “the province looks forward to working with you to ensure the legal and regulatory framework for public utilities is aligned with the government's climate change and affordability objectives.”
The former commissioner provided a before-and-after comparison with the Morton and Jaccard administrations at the BCUC.
Last year Energy Minister Josie Osborne urged the Morton-led BCUC to not apply “purely economic considerations” when setting B.C. Hydro rates. Rather it should “protect people — especially low-income households” — that were struggling with the cost of living.
“The BCUC rejected the minister's request, and made its decision based on regulatory principles,” says Mason. “Three months later, the BCUC chair was replaced. This year, the BCUC just did exactly what it was asked.”
As for Hydro's assurances that the $100 credit will offset the impact of the latest increase in electricity rates, it was a onetime thing announced as part of an election-year budget.
“So there's no guarantee this exercise will be repeated.”
Other factors could have a punishing impact on Hydro's finances, from a drought-driven need to import electricity to the final cost of the Site C dam project — which is already forecast to necessitate an 8.3 per cent rate increase in 2026.
Hydro may intend to hold the line on future rate increases, but there are “risks that are simply beyond its control,” says Mason.
If Hydro determines that greater rate increases are needed, a weakened B.C. Utilities Commission would be in no position to stop it.