BC Hydro's two-step rate
BC Hydro's two-step rate encourages conservation
September 9, 2008
By Bob EltonBC Hydro President and CEO
Conservation is the cleanest, easiest and least expensive way to meet the increasing demand for electricity in B.C. – it's like building a virtual dam. That's why BC Hydro is introducing a two-step rate for our residential customers to provide a financial incentive to conserve.
With the new conservation rate in place, 70% of BC Hydro's residential customers will pay the same or less than with the existing flat rate – even if they take no action to conserve. Of course, we hope people will take action, in particular, consumers with high electricity use.
How the conservation rate works
Close to 20 North American utilities already have stepped residential rates that work much like BC Hydro's. Here's how ours will work: As of Oct. 1, customers will pay 5.98 cents per kilowatt hour up to 1,350 kilowatt hours of electricity used over a two-month billing period and then 7.21 cents for electricity used above that amount. In April of next year, the step-one rate will become 6.35 cents and the step-two rate 8.27 cents.
A fair, equitable rate
It's interesting to note that half of our residential load goes to serve just one quarter of our customers. But we believe everyone has a role to play. That's why the two-step conservation rate will apply equally to all residential customers – regardless of the kind of house they live in, how they use electricity, or where they live.
When you look around the province, consumption is very similar. The number of high-consumption customers in the Lower Mainland, for example, is about the same as the number on Vancouver Island – even though natural gas arrived on the Island only a few years ago and there are a higher proportion of electrically heated homes.
While electric heat can be one significant use of electricity, consumption is driven by a wide variety of factors – for example, dwelling size, the energy efficiency of household appliances, and lifestyle choices such as the number of electronic devices.
We all have the power to conserve
Whether people live in a condo or an apartment or a larger home, whether they use natural gas or electricity for heating, everyone has the power to reduce their electricity consumption and lower their bills.
For example, a family living in a single-detached home with electric heating and hot water uses close to 20,000 kilowatt hours per year. If they reduced their consumption by just five per cent – about 1,000 kilowatt hours – they would not pay any more under the two-step conservation rate than they would have under the flat rate.
Saving energy is relatively easy. Turning the thermostat down one degree saves 400 kilowatt hours per year and washing clothes in cold water saves as much as 720 kilowatt hours. Hanging clothes to dry even 50 per cent of the time saves another 520 kilowatt hours.
Rebates, incentives and advice
To help all of our customers conserve, we're offering product rebates and other financial incentives through our Power Smart programs and half-price home energy audits through LiveSmart BC. The BC Hydro website is a great resource for conservation tips. People can also phone our call centre at 604 224 9376 or 1 800 224 9376, and we'll guide them through our programs.
In particular, we're reaching out to those groups who may be especially concerned about the new rate structure. We appreciate that some people will find this hard. That's why we've created an advisory panel that includes organizations representing seniors, tenants, immigrants and people with low income.
For low-income customers, we're offering free energy savings kits. We've already delivered more than 2,000 of these kits – saving a household with electric heat and water an estimated 740 kilowatt hours a year.
Among the lowest rates in North America
Even with these rate changes, BC Hydro customers will continue to pay the third lowest electricity rates in North America, after Manitoba and Quebec. Let me reiterate that BC Hydro has introduced this rate structure to encourage conservation, not to make money. Our two-step conservation rate will not generate any additional revenue for BC Hydro. In fact, we are urging our customers to buy less of our product – a relatively unique approach to sales.
By 2010, we estimate the two-step conservation rate will yield approximately 300 gigawatt hours of annual electricity savings. That's enough to power 30,000 homes. All British Columbians will benefit from those energy savings, and the additional reward of knowing that we are doing our bit to protect the environment.
September 9, 2008
By Bob EltonBC Hydro President and CEO
Conservation is the cleanest, easiest and least expensive way to meet the increasing demand for electricity in B.C. – it's like building a virtual dam. That's why BC Hydro is introducing a two-step rate for our residential customers to provide a financial incentive to conserve.
With the new conservation rate in place, 70% of BC Hydro's residential customers will pay the same or less than with the existing flat rate – even if they take no action to conserve. Of course, we hope people will take action, in particular, consumers with high electricity use.
How the conservation rate works
Close to 20 North American utilities already have stepped residential rates that work much like BC Hydro's. Here's how ours will work: As of Oct. 1, customers will pay 5.98 cents per kilowatt hour up to 1,350 kilowatt hours of electricity used over a two-month billing period and then 7.21 cents for electricity used above that amount. In April of next year, the step-one rate will become 6.35 cents and the step-two rate 8.27 cents.
A fair, equitable rate
It's interesting to note that half of our residential load goes to serve just one quarter of our customers. But we believe everyone has a role to play. That's why the two-step conservation rate will apply equally to all residential customers – regardless of the kind of house they live in, how they use electricity, or where they live.
When you look around the province, consumption is very similar. The number of high-consumption customers in the Lower Mainland, for example, is about the same as the number on Vancouver Island – even though natural gas arrived on the Island only a few years ago and there are a higher proportion of electrically heated homes.
While electric heat can be one significant use of electricity, consumption is driven by a wide variety of factors – for example, dwelling size, the energy efficiency of household appliances, and lifestyle choices such as the number of electronic devices.
We all have the power to conserve
Whether people live in a condo or an apartment or a larger home, whether they use natural gas or electricity for heating, everyone has the power to reduce their electricity consumption and lower their bills.
For example, a family living in a single-detached home with electric heating and hot water uses close to 20,000 kilowatt hours per year. If they reduced their consumption by just five per cent – about 1,000 kilowatt hours – they would not pay any more under the two-step conservation rate than they would have under the flat rate.
Saving energy is relatively easy. Turning the thermostat down one degree saves 400 kilowatt hours per year and washing clothes in cold water saves as much as 720 kilowatt hours. Hanging clothes to dry even 50 per cent of the time saves another 520 kilowatt hours.
Rebates, incentives and advice
To help all of our customers conserve, we're offering product rebates and other financial incentives through our Power Smart programs and half-price home energy audits through LiveSmart BC. The BC Hydro website is a great resource for conservation tips. People can also phone our call centre at 604 224 9376 or 1 800 224 9376, and we'll guide them through our programs.
In particular, we're reaching out to those groups who may be especially concerned about the new rate structure. We appreciate that some people will find this hard. That's why we've created an advisory panel that includes organizations representing seniors, tenants, immigrants and people with low income.
For low-income customers, we're offering free energy savings kits. We've already delivered more than 2,000 of these kits – saving a household with electric heat and water an estimated 740 kilowatt hours a year.
Among the lowest rates in North America
Even with these rate changes, BC Hydro customers will continue to pay the third lowest electricity rates in North America, after Manitoba and Quebec. Let me reiterate that BC Hydro has introduced this rate structure to encourage conservation, not to make money. Our two-step conservation rate will not generate any additional revenue for BC Hydro. In fact, we are urging our customers to buy less of our product – a relatively unique approach to sales.
By 2010, we estimate the two-step conservation rate will yield approximately 300 gigawatt hours of annual electricity savings. That's enough to power 30,000 homes. All British Columbians will benefit from those energy savings, and the additional reward of knowing that we are doing our bit to protect the environment.
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