On Tuesday, BC Hydro submitted a revenue requirements application with the British Columbia Utilities Commission (BCUC) citing capital investments as the reason it needs to increase its rates.
BC Hydro is seeking rate increases of 9.73% for each of fiscal years 2012, 2013 and 2014 – 32% over the three years.
The average monthly bill will rise from about $71 per month to about $94 by fiscal 2014.
The most significant cost factor driving rate increases is BC Hydro’s ongoing capital investment program, which will see $6 billion spent over the next three years on upgrading and expanding capital infrastructure province-wide.
Dave Cobb, president and CEO of BC Hydro, said, “Our dams, generating stations and transmission lines were built primarily between 1950 and 1980, and many of these assets are nearing their end of life.”
In addition to necessary upgrades to large assets, such as the 80-year-old Ruskin dam and powerhouse, Cobb said there are a number of system-wide upgrades that are necessary.
These include replacing aging distribution system wood poles, underground or submarine cables in the transmission system and decades-old porcelain switches that protect pole-top transformers and branch circuits from surges or overloads.
The public, quasi-judicial regulatory review process with the BCUC is expected to take close to a year for a decision. Interveners will have an opportunity to question and understand the cost structure and revenue requirements. An oral hearing is expected to take place in the fall.