A panel formed by the British Columbia provincial government has submitted its report and recommendations regarding crown-owned utility British Columbia Hydro's proposed electricity rate hike.
On March 1, 2011, BC Hydro filed a rate increase request with the British Columbia Utilities Commission. The application planned to raise rates nearly 10%. After significant push back from both residential and commercial ratepayers, newly sworn in Premier Christy Clark requested a panel be formed to review BC Hydro and its proposal.
The panel, made up of deputy minister to the premier, John Dyble, deputy minister of finance, Peter Milburn and associate deputy minister of the environmental assessment office, Cheryl Wenezenki-Yolland have proposed a plan [pdf] to cut the utility's expenditures by $800 million over three years.
On behalf of the government, Energy and Mines Minister Rich Coleman has agreed "to implement panel's recommendations." BC Hydro will file a new rate proposal to the BC Utilities Commission (BCUC) which will reflect the savings from the proposed cost cuts. The new rate increase is 50 percent less than what the Crown corporation had proposed. Under the proposal, the new rates would be hiked up 8 percent in 2012, and 3.9 percent in both 2013 and 2014.
As part of the $800 million plan the panel has recommended that the utility cut 1,000 employees over three years which could result in slashing BC Hydro's costs by $175 million.
In addition, the panel called for the utility to "accelerate the pace and magnitude of change within BC Hydro to develop an organizational structure that keeps costs down and passes savings to British Columbians."
The plan also recommends the provincial government reevaluate the plausibility of both the timeline and definitions set forth by the 2007 BC Energy Plan which requires the province to obtain sufficient electricity supply from sources within British Columbia by 2016.
The panel summarized the report's executive summary saying, "While the panel believes that BC Hydro has done a relatively good job of providing reliable and safe electrical services to the residents of BC at low rates, BC Hydro’s operating costs have been increasing over recent years."
At a joint press conference with Minister Coleman, BC Hydro CEO Dave Cobb commented on the panels recommendations saying, "Reviews like this are never easy. We want to be the most efficient and cost-effective utility in North America, and we're not there yet."
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