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B.C. braces for power rate hikes to pay for costly green energy projects

BC Hydro crews work to repair damage to a high-volt power line transmission tower following a plane crash in Abbotsford on Monday afternoon.

B.C. residents and businesses are facing a sharp increase in their electricity bills but are being advised to take solace in the fact they're still shelling out less than almost everyone else in North America.

Provincial Energy Minister Bill Bennett announced Tuesday that Crown-owned BC Hydro's rates will climb nine per cent next year, another six per cent in 2015 and a total compounded hike of 28 per cent over five years, CBC News reported.

The good news is that BC Hydro had suggested it needed a 26 per cent hike by 2016 to meet its requirements, according to a document leaked last summer. The ensuing furor, coming just a few months after the Liberals won a fourth mandate, put government on the defensive.

The increases are part of the government's 10-year plan to keep rates as low as possible but ensuring BC Hydro has money to put into maintaining its aging network of dams and investing in new projects.

The B.C. Utilities Commission will determine what further rate increases will be needed in the last five years of the plan.

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Bennett told a news conference the increase equals about eight dollars more a month on the average home power bill and $20 for a small industrial or commercial user, CBC News said. Large-scale power uses will see their bills rise about $139,000 a month.

"The average residential user, their cable bills and phone bills are much, much higher than their electricity bills," said BC Hydro CEO Charles Reid, according to The Canadian Press.

Bennett said B.C. residents pay the third-lowest power rates in North America.

Indeed, a comparative study of average hourly rates in major cities done by Hydro Quebec found that as of last April 1, Vancouver resident paid 8.91 cents per kilowatt/hour, compared with 6.87 cents in Montreal, 12.39 cents in Toronto and 14.81 cents in Calgary. Halifax residents pay the most, at 15.45 cents. San Franciscans pay what looks like a continental high of 22.94 cents.

According to data posted by Manitoba Hydro, the average Vancouver home using 750 kW/h of electricity paid $61.92 cents a month, compared with $52.77 for a Montrealer, $102.52 in Toronto and $118.55 in Halifax.

While B.C.'s power policies aren't quite as off-putting as Ontario's, critics have questioned both the government's long-term power-development strategy and BC Hydro's accounting practices.

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The Ontario government is reeling from former premier Dalton McGuinty's decision to cancel two gas-fired power plants under construction that ran into local opposition. The billion-dollar cost will be passed on to consumers on their power bills.

The government's enthusiastic embrace of high-cost green energy from solar and wind power is also being absorbed by ratepayers. Ontario power users are facing twice-yearly rate increases, with off-peak rates that cover most household use rising sharply, CBC News reported last month.

B.C. Premier Christy Clark has had to revisit predecessor Gordon Campbell's strategy of adding green power capacity via smaller-scale independent power projects, which have also proven costly.

BC Hydro is contracted to buy the power at higher than current market rates at a time when demand is not particularly strong but, with plans for large-scale development of liquified natural gas production, could begin ramping up. The government cancelled 10 contracts and deferred another nine last summer out of the 130 purchase agreements the province signed, CBC News reported.

The Clark government last year revised the Clean Energy Act, which requires Hydro to achieve energy self-sufficiency by 2016, to include natural gas as a clean source of fuel, a major step back from Campbell's emphasis on renewables.

It's also going ahead with hearings on the long-dormant Site C dam project in northeastern B.C., which it sees as a crucial piece of its resource-development strategy but which environmentalists oppose because it will flood large swaths of land.