By Tom Fletcher - BC Local News - February 21, 2008

As B.C. residents get used to a new carbon tax on gasoline and home heating fuels starting July 1, and the price of crude oil breaks through the $100 a barrel level, BC Hydro has applied for electricity rate increases totaling 13 per cent for 2009 and 2010.

Hydro says the effect on power bills for most residential customers will amount to $5 a month or less, and it needs the money to upgrade dams and power lines that were built decades ago.

If approved by the commission, a new rate would take effect on an interim basis on April 1 of this year. If it's not approved after hearings this summer, a rebate would be paid.

"We recognize that even a modest rate increase has an impact on our customers," said BC Hydro president Bob Elton. "However, customers can partially or even fully offset this increase by making some changes in the way they use electricity."

The utility will also seek approval for a new two-level rate structure that will charge a higher rate for customers who consume more.

Energy Minister Richard Neufeld said most of the revenue isn't to pay for private power sources as the NDP suggests, but to upgrade existing publicly owned dams and transmission facilities. The most costly of those is adding a fifth generating unit to the Revelstoke Dam. B.C.'s newest big dam opened in 1984 with four units and spaces for two more, and adding an extra unit is expected to cost between $280 and $350 million.

Another project already underway is the $66 million construction of a new dam downstream of the existing Coquitlam Dam, which was built in 1913 and doesn't meet modern earthquake standards. The Coquitlam reservoir is also the largest municipal water source for Metro Vancouver.

Another need is a new transmission line to Vancouver Island, estimated to cost $300 million. Neufeld said the new line would keep up with growing demand up to 2018, after which Vancouver Island will need either new generating capacity or additional power lines from the mainland.

Neufeld rejected NDP criticisms that the government's policy of buying new power from private providers is driving up new rates to pay for costly and intermittent run-of-river power. He said their cost comparisons are based on low-priced power from big dams built in the 1950s and 60s, which would be far more expensive to build today.

And while some run-of-river projects are intermittent, one of the larger ones to sign a purchase agreement with BC Hydro is glacier-fed and will produce all year round, he said.