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BC Hydro’s Customer Crisis Fund at Risk of Folding

Bill Andrews and Tom Hackney
Tuesday, September 29, 2020

BC Hydro has just recommended to the Utilities Commission that its Customer Crisis Fund (CCF) Pilot Program should not continue beyond its default end date in April 2021.

Implemented in May 2018, Hydro’s CCF Pilot Project gives small grants to BC Hydro customers who face disconnection for arrears in their electricity bills.

The idea of the CCF arose during the Utilities Commission’s review of BC Hydro’s 2015 Rate Design Application. The intervener BC Old Age Pensioners, et al (BCOAPO) argued strongly (with BCSEA support) for a “lifeline” rate for qualified low-income customers, to provide a minimum amount of low-priced electricity to meet their basic needs. BCOAPO filed substantial evidence of low-income customers experiencing serious energy poverty. BCOAPO also argued that a BC Hydro customer crisis fund would save more money in reduced dunning and reconnection expenses than it would cost in grants and administration.

In its final decision,[1] the Commission rejected the lifeline rate, saying it lacks jurisdiction to approve a low-income rate that requires a subsidy from non-participating customers. But the Commission ordered Hydro to implement a three-year pilot program to determine if a customer crisis fund would save more money than it cost. The CCF Pilot is funded by a rate rider of 25 cents per month per customer (later reduced to 13 cents).

The CCF Pilot Program has now been operating for two years. Hydro has given grants totaling $2.2 million to 6,400 customers who were unable to pay their electricity bills due to temporary financial crises. Eighty-five percent of grant recipients avoided disconnection.[2] The pilot has been successful in the sense of benefitting the customers who needed the assistance.

Perhaps unsurprisingly, however, the CCF Pilot Program cost more in grants and administration than it saved in reduced dunning and disconnection expenses. As a result, hope was dashed that the Commission would find it had jurisdiction to approve the CCF on a permanent basis.

In its Two-Year Evaluation Report, BC Hydro acknowledged that the CCF has societal benefits. However, it concluded that “there are insufficient utility benefits to justify CCF on an economic or cost of service basis.”[1] Accordingly, Hydro recommends that the CCF end when the pilot period expires on March 31, 2021.

BCSEA will be disappointed if the CCF pilot program comes to an end. BCSEA continues to believe that the BC government should allow BC Hydro to implement life-line rates for low-income customers. Mitigation of electricity poverty is essential social policy, and it is a basic prerequisite for shifting British Columbia off fossil fuels and onto renewably generated electricity.

[1] BCUC Decision and Order G-5-17, pp. 93 – 98 

[2] BC Hydro Customer Crisis Fund Pilot Program – Two-Year Evaluation Fund, 28 July 2020, page 1 

[3]Ibid, page 3