A 3% rate hike announced by the British Columbia Utilities Commission this week cast further doubt on the province's decision to move forward in completing its controversial Site C project.
The New Democratic Party had promised British Columbia's rates would not increase throughout the province's recent election cycle. However, the BC Utilities Commission said there was "insufficient regulatory justification" to flatline consumer rates, based largely in part on the current financial status of utility BC Hydro.
"This situation is not sustainable," BCUC said on its decision, noting the utility's debt, decreasing domestic revenues, downturn in demand and an increasing power surplus have led to an "apparent decoupling of revenues and expenditures."
BC Hydro had actually proposed the 3% increase -- the maximum allowable by the provincial government -- in 2016, before Premier John Horgan and the New Democrats moved for the stay following his election in July.
Compounding BC Hydro's other problems is the US$8.3 billion Site C. The albatross seemed all but a certainty for the chopping block following Horgan's promise to nix the project during his campaign, but the government announced its intentions to see the hydropower plant through to its completion in December following a series of independent and BCUC reviews.
Work stoppage at Site C
Potentially driving the 1,100 MW plant's costs even higher is a voluntary work stoppage on sites associated with the facility's transmission lines.
Following the start of legal action against BC Hydro by the West Moberly and Prophet River First Nations on January 15, the utility pulled crews who were logging in locations deemed "critical areas" by the First Nations.
The First Nations also filed an interim injunction application on January 31 with the goal of suspending all construction until a trial judgment is received. The 4,000-page injunction alleges Site C violates
This hearing is expected to begin July 23 and are projected to take 10 days.
"We feel very good about the state of play," West Moberly Chief Roland Willson said. "BC Hydro wouldn't send their contractors home and shut down work for the next six months unless their back was against the wall. And if they are making these types of concessions before we even step foot inside the courtroom, we think that bodes well for our injunction this summer."
For a full archive of HydroWorld.com's past reporting on Site C, visit here.