May 6, 2025

As noted in previous newsletters, BC Hydro sought approval from the BCUC for changes to their Distribution Extension Policy and put forward a 2024 Rate Design Application to the Board.  

The Distribution Extension Policy was approved in March with an effective date of July 5, 2025. On their Distribution Extension Policy Changes website, BC Hydro outlines their approach during the transition period that came into effect on April 22nd: 

“Customers with projects invoiced between April 22 and July 5, when the new policy takes effect, will receive additional details from their BC Hydro design representative. These customers can choose to proceed under the current policy or wait for the new policy to apply. Their design representative will outline any potential cost savings of delaying until after July 5. Customers that opt to delay their project until the new policy takes effect should be aware that doing so will impact their project schedule due to an expected backlog.” 

They also provide a link to Frequently Asked Questions. For more information, BC Hydro asks that you contact your Key Account Manager or email them.  

Regarding the 2024 Rate Design Application, last month, BC Hydro began to implement a provision impacting multi-occupancy residential metering that the BCUC approved earlier this year. The utility, “… will no longer provide master meter service to new multi-occupancy buildings or new residential units within multi-occupancy buildings (excluding secondary suites) … Instead, these units will require individual metering.” In addition, BC Hydro will have to provide the metering services for residential units in these buildings – not third parties.  

UDI is working with BC Hydro on a webinar for members to review the above changes.   

March 11, 2025

As noted in previous newsletters, UDI has been working with municipalities, stakeholders and BC Hydro for couple of years to improve the Utility’s Distribution Extension Policy. Last summer, the BCUC began a hearing to review BC Hydro’s proposals. UDI is pleased that the Commission has now issued an Order approving the Distribution Extension Policy. The new approach: 

• Eliminates “… the need for direct customer contributions toward system improvement costs in all but extraordinary cases;”
• Increases “… the BC Hydro contribution towards all distribution extensions,” that will be updated annually; and
• Extends the Extension Fee refund period, so builders who fund larger extensions will likely receive more compensation if future projects are connected to the infrastructure they fund. The current five-year period will be extended to ten years (if the extension fee is between $ 1 million to $4,999,999) and to 15 years if it is $5 million or more. 

The effective date for the new Distribution Extension Policy will be July 5, 2025, and BC Hydro is expected to provide an evaluation report on the it and its implementation to the BCUC by December 5, 2028. UDI is working with BC Hydro on a webinar for members to explain the changes as well as how in-stream projects will be treated.  

More information can be found in the official Statement from BC Hydro.

UDI also noted in previous newsletters that BC Hydro has established a self-generation program (net metering) with rebates for “… solar panels and energy storage systems for residential and business customers …”.  On February 21st, the BCUC announced a Panel to review BC Hydro’s Net Metering Service Rates as well as establishing a timetable for the hearing process. For more information, please see the BCUC’s webpage for the Proceeding. 

July 29, 2024

As noted in earlier newsletters, UDI has been working with municipalities, stakeholders and BC Hydro for 18 months on improving their Distribution Extension Policy. Please see UDI’s May 31st letter to BC Hydro regarding their proposals. 

On July 16th, BC Hydro announced they had “… filed an application with the BC Utilities Commission to modernize its Distribution Extension Policy to meet growing demand.” This is critical since “… customer connection requests increased by more than one-third in recent years.” 

The Policy had not been updated since 2008, and builders have had concerns about the fairness and predictability of BC Hydro connections. Currently, “… new or upgraded connections that require system upgrades must be completely paid for upfront by the initial customer that makes the request.” These initial “… costs can range widely from thousands of dollars to millions of dollars …,” so there is little cost certainty. In addition, the rebate mechanism to the initial builder, if others connect to the distribution infrastructure they funded, is limited. These problems with the Distribution Extension Policy have delayed development projects in some faster-growing areas as BC Hydro has had to wait for “pioneer” builders to fund substantive distribution infrastructure improvements.  

The system improvement costs have been the primary concern because they can vary greatly project by project, and are generally a significant portion of the overall costs for connections. BC Hydro is addressing this issue by eliminating “… system improvement costs for all new customers …”. 

However, there is a safety valve. Builders with requests over 1 MVA will have to fund a portion of the costs of the system improvements, as BC Hydro contributions will be capped at $1 million per MVA, prorated by kVA, up to a maximum of $10 million …”. BC Hydro may also require a security from builders, if the utility’s system improvement investment is over $1 million, to guarantee that the builder’s “…Maximum Demand (i.e., the actual highest peak demand) satisfies BC Hydro’s investment towards the System Improvement.” UDI will continue to raise the issue of how large multi-phase projects will be treated. We have recommended that BC Hydro consider “… how utility infrastructure can be phased in coordination with the staggered increase in demand so the ‘safety valve’ provision is infrequently triggered …”. 

BC Hydro is also proposing to increase its maximum contribution for extensions from $1,475 to $2,690 per residential dwelling and from $200 to $501(per kW of estimated Billing Demand) for General Service, as their contributions have not been updated since 2008. There will be more frequent updates in the future.  

They are also seeking to allow the contribution to offset service connections costs (“… the last section of the wire or cable that connects and delivers the electricity to the customer”). However, metering costs will still have to be funded by builders.  

Builders will also continue to fund extensions (i.e., the wires and infrastructure needed to extend the existing BC Hydro distribution system to a new customer/project). The costs will continue to be based on the estimated costs of construction for an extension. However, BC Hydro is extending its Extension Fee refund period, so builders who fund extension will likely receive more compensation if future projects are connected to the infrastructure they funded. The current five-year period will be extended to ten years (if the extension fee is between $ 1 million to $4,999,999) and to 15 years if it is more than $5 million. BC Hydro is also amending the frequency of when they do automatic reviews of extension refunds for a customer.  

BC Hydro’s submission also includes proposed updates to the standard charges in their Electric Tariff (see Section 4.5) for infrastructure such as overhead and underground wiring as well as metering. 

They argue in their submission that “In general, the proposed Extension Fee updates are expected to reduce all customers’ Extension Fees due to increases in BC Hydro Contribution.” However, they note that “… Extension Fees for Small-Scale Multi-Unit Housing could still vary depending on the existing infrastructure and capacity available in the area, and the technical and municipal requirements to connect a Small-Scale Multi-Unit Housing development…”. In the submission, they commit to continue to collaborate with municipalities to resolve these issues.  

The BCUC has established a timetable for the Proceeding, and the hearing portion of it is estimated to be completed by the end of November. BC Hydro has requested that the Distribution Extension Policy “… be made effective the later of April 1, 2025, or four months following the approval of the proposed amendments by the BCUC.” For instream projects, BC Hydro has indicated that “Upon the effective date of the updated Distribution Extension Policy, customers who have paid the Extension Fee prior to the effective date of the updated Distribution Extension Policy would be subject to the existing Electric Tariff provisions.” 

If you are interested in receiving updates on BCUC’s BC Hydro Distribution Extension Policy Proceeding, please use the following link: Get Involved in a Proceeding. If you would like to be an intervener, the request must be made by August 15th.