A federal court has ordered the B.C. Utilities Commission to review its own practices in regulating and charging hydro rates, in a ruling that will set the stage for a court battle that could affect the province’s energy future.
The ruling by the Federal Tribunal of Canada is the latest to challenge rates that were imposed under the BC Hydro Act.
The commission was appointed to oversee the rates under the previous government.
The tribunal’s decision came on a motion filed in the Federal District Court by an intervenor group called the BCTF, which argued that the rates are arbitrary and discriminatory.
It was also opposed by B.F. Green, who said the rate review should be done by the commission.
The BC Utilities Commission will consider the tribunal’s ruling, which was made public Wednesday, said spokesman Scott MacNab.
It’s the first time a regulator has sought to challenge a rate since the legislature passed the Hydro One Act in 2009, said Tom Fergus, executive director of the Bletchley Park-based energy advocacy group BC Hydro.
“It’s pretty amazing,” he said of the tribunal ruling.
The regulator is required to issue a report within 30 days on the findings of its inquiry into the BC Power Plan.
The review, which is expected to take several years, will look at the impact of the rate changes on customers, businesses and the environment.
If the report is positive, then the regulator will consider making further adjustments to the rates, said Fergus.
The rate review, if it concludes that the BC government’s power prices are unfair, could lead to more changes, said Mark Stewart, a senior research fellow at the Fraser Institute.
The cost of living is one of the major factors for the commission, he said.
In order to pay for its costs, the commission is required by law to levy an annual rate on every household.
It also has the power to fine the utilities it regulates $100 per household, or $25,000 per day, for noncompliance.
That means the commission could impose fines of up to $150,000 for the first violation and $250,000 or more for the second.
A spokesman for the BC Utilities Minister did not respond to a request for comment.
The BCTM’s motion to the tribunal said the BC Energy Regulator should review the rates and take further steps to ensure the BC Electricity Rates are fair.
It said the tribunal decision is the first in the past five years to challenge the power bills.
The inquiry was prompted by a lawsuit by the BC Green Coalition.
The group has argued that rates have been unfairly low and have not kept pace with inflation.
The government argued that it has a strong policy of protecting customers’ electricity costs and is not a “pilot” for rate increases.
The Supreme Court of Canada ruled last year that the government had to pay $1 billion in damages to a BC Hydro customer for being billed for electricity at rates that are too high.