Critics are slamming a decision by the BC Utilities Commission to approve two-tiered rates for household electricity that aims to reward people who conserve electricity and punish those that don't.

One consumer advocate said pensioners and people with lower incomes will be hit hard

But in an interview with CTV, BC Hydro President Bob Elton defended the concept, saying it is widely used throughout the world.

"We want people to conserve,'' Elton said.

"We think it's vital to the future of the province's electricity supply that people do. And one of the ways to encourage people to conserve is to send some kind of price signal," Elton said.

BC Hydro says it is doing a number of things with the rates.

  • It applied for a general rate increase that is 13 per cent over two years. This is primarily to raise revenue to replace and upgrade aging generating, distribution and transmission infrastructure.
  • It is also introducing a two-step conservation rate structure that will actually mitigate (lower) the average bill increase. The two-step conservation rate structure is revenue neutral. That takes effect Oct. 1.
  • The current rate for electricity is 6.55 cents per kilowatt hour. As of Oct. 1, people will pay only 5.98 cents per kilowatt hour for the first 1,350 kilowatt hours of electricity they use over a two-month billing period. Electricity used above that threshold will be charged at a slightly higher rate of 7.21 cents per kilowatt hour.
  • The idea is to give people a financial incentive to conserve. At the end of the day, the vast majority of Hydro's residential customers will see an increase of about $5 per month per year compared with what they were paying a year ago.
  • We will still have the third lowest electricity rates in North America, after Manitoba and Quebec.
  • Most other utilities, by the way, are introducing two-step conservation rates. About 20 utilities in North America are already doing this.

But some consumers still aren't happy.

"It's just the usual money-rake because most of the profit goes to the B.C. government. It's just another form of taxation," one person told CTV in a street interview

That's not true, according to BC Hydro. The two-tiered system is supposed to be 'revenue neutral'.

But a lawyer, who represents BC Hydro customers doesn't see it that way.

"Everybody's going to be hit hard. There's no escaping it," said Jim Quail, a director with the B.C. Public Interest Advocacy Centre. He believes the poor are still going to be hurt.

"Affluent people-- okay maybe it's one or two fewer nights out on the town. For pensioners, for people on limited income, this is a very serious hardship," he said.

John Horgan, an energy critic with B.C.'s New Democratic Party noted that the new two-tiered structure does not take into account factors such as homeowners who use electricity to heat their homes, and will likely push some consumers away from green energy to emission-generating alternatives like gas and wood.

"People who heat their homes with electricity are going to be hit especially hard. The government may be pushing families to less green alternatives, increasing greenhouse gas emissions,'' he said.

At a time when we should be encouraging people who are taking steps towards sustainability, the Campbell government is pushing through a system that will penalize them," said Horgan.

For more information, please click on the B.C. Utilities Commission link.

With a report by CTV British Columbia's Peter Grainger.