Gov’t Using Misleading Accounting at BC Hydro, Charges Dix
Minister counters that ‘rate-smoothing’ accounts make sense due to 10-year plan for rate increases.
BC Hydro transmission tower on Mt. Seymour. Photo by agaumont from Your BC: The Tyee’s Photo Pool.
The British Columbia government has chosen to use misleading accounting at BC Hydro to fudge the province’s finances ahead of the 2017 election, charges NDP energy critic Adrian Dix.
“They misled people about the state of B.C.’s finances, and they misled people about the state of BC Hydro’s finances,” said Dix, the MLA for Vancouver-Kingsway, in an interview. “This will affect every single person in the province.”
In particular, he said, the government is using “rate smoothing” or “rate stabilization” accounts to move up about $1 billion in revenue that the Crown utility won’t actually receive from ratepayers until after 2021 so that it is included as income for earlier years.
The accounting trick lets the government continue to take money out of the utility to help balance its own books, Dix said.
“We’re borrowing against nothing here,” he said. “This is a pure attempt to mislead people about the state of the province’s finances.”
A table from a March 30 BC Hydro presentation shows the practice peaks in 2017, which happens to be the same year as the next provincial election.
For context, the provincial government has budgeted an overall surplus of $287 million in 2017-2018, which in part depends on receiving $706 million from BC Hydro.
The rate-smoothing money is therefore more than one-third of the amount the government plans to take from the utility in the election year.
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