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B.C. energy minister says hydro rates will increase, but can't say by how much

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(Globalpost/GlobalPost)

VICTORIA - BC Hydro power rates have no place to go but up because billions of dollars are being pumped into capital projects around the province to upgrade decades-old infrastructure, says Energy Minister Bill Bennett.

Bennett wouldn't give a ballpark figure on the rate hikes Thursday, but said BC Hydro and the provincial government will discuss the issue and likely make a decision within the next two months.

But John Horgan, the Opposition New Democrats' house leader and energy critic, is questioning the spending, saying BC Hydro is making decisions without any third-party oversight, and the Liberals are increasing debt that has to be paid in a timely way.

"Bankers don't have the same level of patience that cabinet ministers do, and that means rate increases," said Horgan. "I'm quite fine with investing in our infrastructure, but I think what the Liberals are neglecting is the honesty with the public."

Bennett's announcement comes a little more than a year after Liberals ordered proposed BC Hydro rate increases to be cut to 17 per cent over three years, down from a recommended 32 per cent.

It also comes on the same day the Liberals and NDP debated an internal audit of BC Hydro's disaster preparedness planning.

The audit found BC Hydro wasn't "adequately prepared" to recover, react and respond to a catastrophic event like an earthquake, and didn't have a mature or integrated disaster-preparedness program.

According to BC Hydro, seismic work is taking place at the John Hart Dam and Generating Station in Campbell River, B.C., and the Ruskin Dam and Powerhouse, near Maple Ridge, B.C., and Bennett said about $2 billion is being spent on the two project alone.

Some power-generating turbines are 40 to 50 years old, Bennett said. In fact, the minister recalled a conversation he had with a former BC Hydro president, learning of one instance where equipment was 100 years old.

Bennett said BC Hydro had acquired such equipment while buying up private-utility companies in the past.

Hydro rates didn't increase during the 1990s, when the New Democrats were in power, he noted, adding even the Liberals didn't let rates increase much until Premier Christy Clark took over as party leader.

Bennett said he thinks the provincial government will have to make the "same kind of decision" it made in May 2012 over the 17-per-cent rate hike.

"That was a fairly considerable rate increase," he said, noting the premier has instructed him to keep rate hikes as low as possible.

"She knows better than any of us that, you know, you've got to pay the piper," he added. "You can't put it off forever."

Horgan said he's willing to cut BC Hydro managers some slack because the organization's board of directors was appointed by the Liberals, and the Liberal cabinet is actually making many of the decisions.

Instead, he said the decisions should be made by "informed individuals" who are employed by BC Hydro and overseen by an independent commission so rate payers are protected.

---by Keven Drews in Vancouver

http://www.globalpost.com/dispatch/news/the-canadian-press/130704/bc-energy-minister-says-hydro-rates-will-increase-cant-say-h