BC Hydro customers may be getting a 1.4% break on their electrical bills this year but New Westminster Electrical Utility customers are still facing a 2.8% increase.
Last September, BC Hydro applied to the BC Utilities Commission for a rate change as part of a three-year revenue requirements application. BC Hydro requested an annual average bill increase of 1.1% over the three-year period – a 1.4% decrease on April 1, 2022, which will be followed by a 2% increase on April 1, 2023 and a 2.7% increase on April 1, 2024. The commission has granted interim approval for the rate change for the first year, with a decision on the application expected in the coming months.
New West residents, however, get their power from the city’s electrical utility. As part of the city’s 2022 budget, the electrical utility rates went up by 2.8% on Jan. 1 – and that’s not changing.
“The city will increase rates 2.8% in 2022 in order to meet its financial requirements and obligations by keeping its electrical reserves at appropriate level of its asset value and to mitigate against risk and uncertainty around unforeseen inflation or infrastructure losses,” said Harji Varn, the city’s director of finance.
Varn said the the New Westminster Utility Commission approved the current electrical rates, which took effect on Jan. 1.
“The rate takes into account the necessary work annually to address growth and ensure stable, reliable service while avoiding fluctuations in bills throughout the year,” she said in an email to the Record. “The next opportunity for a rate review will take place in the fall, when the commission will deliberate and set the electrical rate for 2023.”
BC Hydro’s rate decrease comes as no surprise to the City of New Westminster.
In a Nov. 1, 2021 budget report to council, staff said they’d met with the New Westminster Utility Commission to discuss the recent announcement that BC Hydro’s projected rates over the next few years included a 1.4% decrease in 2022. Staff also presented the historical trends around the fluctuations with BC Hydro rates for the cost of power and how often the rate projections change from year to year.
“At the utility commission meeting, staff presented the results of the analysis or impact that the rate reduction for 2022 would have on the City of New Westminster’s utility when factoring in the five-year capital plan, along with the overall age of the city’s infrastructure and ability to maintain minimum reserve levels and recommended the need to remain at a sustainable and predictable five-year rate of 2.8%,” said the November 2021 report.
New Westminster is projecting 2.8% increases to electrical rates annually from 2022 to 2026.
Varn said the city’s recently approved five-year financial plan includes major projects like the new Queensborough substation that’s under construction, replacement of electrical meters, and many sustainable renewals and upgrades across the city’s electrical infrastructure to advance the city’s efforts on climate action.
Varn said the rationale for not passing on the rate decrease and for using a stable rate of 2.8% includes the ability to maintain healthy reserves for regular/routine renewal and replacement of existing assets, to maintain reasonable debt-servicing levels, and to address growth-related funding requirements and long-range infrastructure planning. She said it also allows the city to better manage through uncertainty around commodities prices, climate risk and a changing economy and to provide rate stability and predictability by avoiding fluctuations in electrical bills to residents and businesses.
Follow Theresa McManus on Twitter @TheresaMcManus
Email tmcmanus@newwestrecord.ca
