With news the provincial government is ordering a rate freeze for BC Hydro, Fortis customers might be wondering what’s in store for them come the new year.

The answer, says a Fortis spokesperson, is pretty much the same thing.

“We have asked for a 0.17 percent increase, but that could change pending the BCUC review and approval,” said Nicole Bogdanovic. “We don’t actually know what that number will be until it has gone through the process.”

The utility is in the middle of a Revenue Requirements application to the BC Utility Commission (BCUC). The company’s most recent evidentiary update indicates an expected shortfall of just $619,000 in 2018.

“As a regulated private utility, we set our rates based on the actual cost of providing a day to day service as well as collecting enough to make necessary upgrades,” explained Ms. Bogdanovic.  “We put together a revenue requirement, we submit that to the BCUC.”

Fortis was expecting to buy about one-third of the electricity it needs to provide service to its 170,000 customers from BC Hydro — and expecting to pay more this year for that power (although buying less), based on BC Hydro’s own rate application to the utility commission.


“When we put together our revenue requirements, we were anticipating a three to five percent increase from BC Hydro,” said Ms. Bogdanovic.

According to October figures, Fortis BC was expecting to pay BC Hydro roughly $45 million for power purchases in 2018. That’s down from almost $47 million this year — and the cost could be down even more with the BC Hydro rate freeze ordered by the provincial government.

A three-percent decrease in BC Hydro costs would save Fortis about $1.35 million — more than enough to cover the $619,000 shortfall.

The company’s rates are set by the BCUC “within a framework that combines cost of service and performance based regulation,” information on the FortisBC website indicates.

The framework is intended to “encourage FortisBC to operate efficiently”  and provides for shareholders and customers to share in cost savings if specific targets are met.

Fortis customers were subject to a 2.76 percent increase last January. For the average residential electricity customer, according to FortisBC, that was an increase of approximately $3.65 per month.

That followed a 2.96 percent increase in 2016, a 3.5 percent increase in 2015 and 3.3 percent in 2014.

The province announced earlier this month it would be ordering a rate freeze for BC Hydro, citing rates that had increased 24 percent in the last four years and 70 percent since 2001.

The rate freeze, the government said, would provide time to undertake a comprehensive review of BC Hydro to identify changes and cost savings to keep rates low while ensuring BC Hydro has the resources it needs to continue to provide electricity.


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