Hydro debt grows, B.C. deficit shrinks

Energy Minister Rich Coleman is examining BC Hydro's rapidly growing deferred expenses.

The 80-year-old Ruskin dam and powerhouse is getting an upgrade expected to cost up to $850 million. B.C.'s auditor general has criticized BC Hydro for deferring debt for projects such as the Fraser Valley dam

VICTORIA – Energy Minister Rich Coleman is examining BC Hydro’s rapidly growing deferred expenses, part of which end up as a dividend to ease the provincial government’s deficit.

Auditor General John Doyle reviewed BC Hydro’s books and found that as of March, $2.2 billion of the utility’s debt was placed in deferral accounts. Deferred expenses are expected to grow to $5 billion by 2017.

In a report released Friday, Doyle said deferral accounts for major capital costs are an acceptable practice to smooth out rate increases, but BC Hydro’s use of it runs ahead of other Canadian utilities. The practice can “mask the true cost of doing business, creating the appearance of profitability where none actually exists, and place undue burdens on future taxpayers,” Doyle warned.

Doyle added that “there does not appear to be a plan to reduce the balance of these accounts.”

Coleman acknowledges that the share of declared profit BC Hydro is required to pay to government has reduced the provincial deficit. BC Hydro paid $463 million to the province in March, based on a legislated formula that it provide 85 per cent of net income to its only shareholder, the B.C. government.

Coleman said he is studying Doyle’s report, including the conclusion that deferred debt is creating an illusion of BC Hydro profit when the corporation is running at a loss. He said he will also review bonuses paid to senior management for achieving profit goals.

The province’s deficit for the current fiscal year is expected to be $2.3 billion, an estimate that tripled when the harmonized sales tax was defeated in a referendum and the government had to budget for paying back transition funds to Ottawa.

NDP leader Adrian Dix pressed Coleman in the legislature Tuesday to account for bonuses paid to BC Hydro executives. Coleman replied that profits were only one determinant of bonuses, along with worker safety and customer satisfaction.

Current electricity rates include 2.5 per cent that raises $100 million a year to pay down deferred accounts.

Coleman also defended a deferral account set up to pay the $930 million cost of installing BC Hydro’s smart grid. Savings from that upgrade are sufficient to pay for the capital cost, he said.

NDP finance critic Bruce Ralston reminded Coleman that the association of major industrial power users has also raised concerns about BC Hydro’s growing deferred debt, and the potential to deter new mines and other investments that face higher rate increases in the future.

Just Posted

South Surrey man collecting signatures to keep RCMP

Ivan Scott is attending SPD info sessions with his petition

Days numbered for Surrey’s Back on Track recovery homes

As operator pledges to fight, clients predict loss will ‘send us back in our addiction’

City of White Rock responds to Lady Alexandra court petition

City says it did not breach ‘obligation of procedural fairness’

Police in North Delta nab alleged thief riding stolen bike, carrying another

Terry Lee Pipe, 43, of Surrey, has been charged with possession of property obtained by crime

South Surrey Spirit Garden to host Solstice Stroll

Candlelight event to begin at 8 p.m. June 22

10 facts about Father’s Day

Did you know that the special day for dads was first celebrated in 1910?

Parents of BC murder victim want personal belongings returned

Lisa Dudley’s parents, Rosemarie and Mark Surakka, were at the Mission RCMP detachment Sunday

B.C. VIEWS: When farmland protection doesn’t protect farmers

Secondary residences aren’t mansions, families tell Lana Popham

Bombers down B.C. Lions 33-23 in season opener

Former Lion Andrew Harris leads Winnipeg with 148 rushing yards

Northern B.C. family remembers murdered Indigenous woman with memorial walk

Still no closure for Ramona Wilson’s family 25 years later

Pride flag taken down by Township of Langley

Woman said she was told it was removed from her front yard because of a complaint

B.C. university to offer mentorship program for former youth in care

Students using the provincial tuition waiver program will soon be able to form a community at KPU

Cyclists competing in one of the toughest bike races on the planet pass through Fernie

Divide riders looking strong as they finish first leg of 4160 km race

You might not know these B.C. records are public

Hired a lawyer to file a civil claim? Those are published online

Most Read

l -->