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Affordable Hydro for Low-Income British Columbians

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What is Energy Poverty?

People in BC live in energy poverty when they are unable to afford residential electricity and natural gas services to meet their reasonable daily needs.

This problem is amplified because, a) low-income households are the least able to alter their use of energy or pay for energy efficiency improvements, and b) low-income people tend to live in older homes with low efficiency insulation and appliances.

Increasing electricity and natural gas costs are therefore much more difficult for low-income people to cope with.

What can we do about it?

energy_povert_ctaA coalition of seniors’, tenants’, disability and anti-poverty organizations are being represented by lawyers at the BC Public Interest Advocacy Centre (BCPIAC) in proceedings before the BC Utilities Commission (BCUC), in order to ensure that the interests of low and fixed income residential electricity and natural gas residential ratepayers are considered.  BCPIAC has been participating in these processes since the early 1980s.

The BCUC regulates the rates charged by monopoly electricity and natural gas utilities BC Hydro, FortisBC Energy, FortisBC Inc., and Pacific Northern Gas. The BCUC also regulates some smaller utilities.

BCPIAC’s role is increasingly important as electricity and natural gas rates in BC continue to rise at a much faster rate than welfare rates and the minimum wage.

Some of the systemic issues BCPIAC is currently working on to address energy poverty include:

  1. Rate relief for low-income ratepayers
  2. More flexible terms and conditions for low-income ratepayers (such as reduced reconnection fees and flexible outstanding bill payment arrangements)
  3. No-cost access to programs to increase residential energy efficiency for low-income ratepayers

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BC HYDRO CURRENTLY OFFERS NO RATE AFFORDABILITY PROGRAMS FOR ITS MORE THAN 170,000 LOW INCOME CUSTOMERS

About 170,000 (10%) of BC Hydro’s residential customers are low income, meaning they are living at or below Statistics Canada’s Low Income Cut Off (LICO).

People living in poverty have a hard time paying for essential services such as electricity when their incomes are stagnant. Low income BC Hydro customers have no spare money to pay higher electricity costs, and since electricity is essential to survival, people can only pay their electricity bills at the expense of competing household necessities, such as food and medicine.

BC Hydro currently offers no rates or terms and conditions of service that specifically apply to low income customers. It offers two programs to its low income customers:

  1. Energy Savings Kits comprised of a few energy saving products which, if fully installed, might save $30 per year, and
  2. In more limited cases, energy efficiency home upgrades through BC Hydro’s Energy Conservation Assistance Program. This Program is not available to BC Hydro customers living in apartments.

While such energy efficiency programs are important, they are not a stand-alone response to low income customers’ increasing inability to afford their power bills – these programs are only one element of what advocates say must be a comprehensive low income bill affordability strategy.

Ontario, Quebec and Manitoba offer bill assistance programs to low income electricity customers who are having difficulty paying their bills. Ontario has recently introduced a special monthly credit for its low income customers, and both Ontario and Manitoba are expanding these programs. The US has an extensive low income home energy assistance program that is funded in part by the Federal Government and is available in all 50 states.

LOW INCOME PEOPLE INCREASINGLY UNABLE TO AFFORD ELECTRICITY DUE TO RATE INCREASES

BC Hydro residential electricity rates have increased by 47% in the last 10 years, and are on track to increase by at least 10.5% in the next three years. Rates are projected to continue to rise significantly in future years because:

  • BC Hydro is building the Site C dam at a projected cost of almost $9 billion. The BC government exempted Site C from a full public review by the BC Utilities Commission (BCUC), so the final costs of Site C could be much higher. BC Hydro will likely ask that the full costs be collected from its ratepayers;
  • BC Hydro has funneled $5.4 billion of expenses into deferral accounts, money that will be collected from ratepayers in the future through rate increases; and
  • The current caps on rate increases will end in 2020. Since BC Hydro’s spending will likely be higher than what that cap is allowing it to collect, the shortfall will be collected from ratepayers in the future.

While BC Hydro’s electricity rates have increased dramatically, there have been extremely minor increases in income for low income people in BC.   Over the last 10 years, BC social assistance rates have only gone up by $100 or less (for a single person) and the BC general minimum wage has only gone up by $2.45 an hour, as set out in the chart below:

Year BC Hydro Residential Rate Increases Ministry of Social Development and Social Innovation (MSDSI) Income Assistance Rates for a single person General Minimum Wage
Basic Assistance Disability Assistance
2006 1.54% $510.00 $856.00 $8.00
2007 0.10% $610.00 $906.00 $8.00
2008 2.34% $610.00 $906.00 $8.00
2009 8.74% $610.00 $906.00 $8.00
2010 6.11% $610.00 $906.00 $8.00
2011 8% $610.00 $906.00 $8.75/$9.50
2012 3.9% $610.00 $906.00 $10.25
2013 1.44% $610.00 $906.00 $10.25
2014 9% $610.00 $906.00 $10.25
2015 6% $610.00 $906.00 $10.25/$10.45
2016 4% cap $610.00* $906.00* $10.60 est.
2017 3.5% cap $610.00* $906.00* $10.87 est.
2018 3% cap $610.00* $906.00* $11.09 est.
Total
2005-2018
74.16% 19.61% 5.84% 38.62%

*there are no planned increases for MSDSI income assistance

BC HYDRO’S RATE DESIGN APPLICATION IS AN OPPORTUNITY TO SEEK ASSISTANCE FOR LOW INCOME CUSTOMERS

BC Hydro filed its Rate Design Application (RDA) with the BCUC on September 24, 2015. In this process, the BCUC will hear evidence and submissions from BC Hydro and intervener groups and determine rate structures and terms and conditions of service for residential, business and industrial customers.

Over the last 35 years BC Hydro has only filed three RDAs – in 1980, 1991, and 2007. After the 2015 RDA is completed, it could be 10 years or more before BC Hydro files another one.

In the RDA, the BC Public Interest Advocacy Centre (BCPIAC) is representing the following coalition of groups that represent the interests of low and fixed income BC Hydro customers:

  • Active Support Against Poverty
  • BC Old Age Pensioners’ Organization
  • BC Poverty Reduction Coalition
  • Council of Senior Citizens’ Organizations of BC
  • Disability Alliance BC
  • Tenant Resource and Advisory Centre
  • Together Against Poverty Society.

PROPOSED LOW INCOME ELECTRICITY BILL ASSISTANCE PROGRAMS

BCPIAC plans to ask the BCUC to order implementation of three programs to assist low income residential customers.  All BC Hydro residential customers who have incomes under Statistics Canada’s LICO would be eligible to participate in these programs. About 170,000 BC Hydro customers (10%) have incomes below LICO.

The programs are:

  1. Lifeline rate for low income customers
  • Implement a lifeline rate at 5 cents per kWh for the first 250 kWh of electricity per month for low income residential customers (saving about $7.43 per month per low income customer); and
  • Waive the Basic Charge of 17.64 cents/day for low income residential customers (saving about $5 per month per low income customer).

This rate will result in savings of about $13/month ($150/year) for a low income customer.

  1. Emergency bill assistance
  • Implement a low income emergency bill assistance program of up to $500 per year for low income households who have arrears with BC Hydro and are facing disconnection; and
  • All low income customers who receive emergency bill assistance must take part in BC Hydro’s free Energy Conservation Assistance Program, a program to increase home energy efficiency.
  1. Low income terms and conditions
  • Implement terms and conditions for low income customers, including:
    • waiver of security deposits and the ability to build up a security balance over time;
    • more flexible payment arrangements;
    • elimination of late payment fee;
    • suspension of electricity service disconnections during cold weather periods and for customers using lifesaving medical equipment; and
    • waiver of reconnection fees.

Finally, we will recommend areas where BC Hydro’s energy efficiency programs for low income customers can be improved or enhanced.

BC Hydro’s Rate Design Application can be found at: http://www.bchydro.com/ex/rr/pdfs/RDA.pdf

Media Coverage

Lens on Poverty in BC: Pay Hydro or Go Hungry

http://thetyee.ca/News/2016/05/30/Lens-on-Poverty-BC/

Power Bills Rising, ‘My Clients Are Panicking’

http://thetyee.ca/News/2016/06/01/Power-Bills-Rising/

BC Lags in Making Hydro Affordable for Poor: Expert

http://thetyee.ca/News/2016/06/06/BC-Lags-Making-Hydro-Affordable/