Rural Nelson Hydro customers are facing a nearly 16 per cent rate hike next year that the utility says it has little power to prevent.
The utility presented its 2026 and 2027 budget at a Oct. 24 special council meeting. Regional Director for Area E Cheryl Graham and Area C Director Tom Newell were in attendance.
The rural rate increase for 2026 has been proposed at 15.86 per cent, while urban customers will likely see a 7.83 per cent hike.
Chief administrative officer Kevin Cormack said most of the 2026 hike stems from regulatory and cost-of-service requirements that are beyond the utility’s control.
“On the rural side, the main drivers are the return on rate base from the B.C. Utilities Commission’s Generic Cost of Capital (GCOC) decision and the recovery of deferral accounts from prior periods,” said Cormack.
“Together, those make up more than two-thirds of the increase.”
Nelson Hydro staff said roughly 4.7 per cent of 2026’s 15.98 per cent increase comes from operational and power purchase costs.
However, the largest portion is linked to deferreal accounts and an increase to the general cost of capital, which increases the regulated return Nelson Hydro must earn on its rural assets.
The rate breakdown shows rural rates are more heavily impacted by capital returns and regulatory accounting compared to urban rates.
For a typical household using 100 kilowatt hours of power per month, the rural increase would equal about $11 more per month in 2026, then drop to about $4 in 2027.
Area E Director Cheryl Graham voiced strong concern about the burden on rural residents.
“This is not acceptable for residents, especially those who can least afford it,” said Graham.
“In a year when we are all facing a lot of inflation, we are probably looking at about a 10 per cent increase in our property taxes. All of these things together are just creating real concern for me and my residents in Area E.”
Graham asked if there was any way to reconsider or delay the GCOC decision or the deferral accounts driving the increase.
The utility said there’s little room to manoeuvre. General manager Scott Spencer said both the cost-of-capital ruling and the deferral account recoveries were ordered by the B.C. Utilities Commission and must be implemented.
“All the deferral accounts have been approved by the BCUC and they’ve ordered us to establish and recover those balances. The only flexible portion on the rural side is operating expenses, and the only large expenditure is the vegetation management program,” said Spencer.
Cormack said the risks of cutting the vegetation management program outweigh any benefit from reduced rates.
“That risks reliability if we cut back on that this year. There’d be some pretty dire consequences to reducing the vegetation management budget.”
Councillor Rik Logtenberg also defended the vegetation management program, noting that the improved reliability in recent years was largely a result of that work.
“The improvement in reliability over the last couple of years has greatly benefited me and my neighbours,” said Logtenberg, who is also a rural Nelson Hydro customer.
“I really appreciate that work. And so any compromise of our veg management program, I think, would negatively affect me as a rural ratepayer.”
The bottom line
For rural residents, the nearly 16 per cent hike remains effectively locked in by the BCUC regulatory framework.
Spencer reiterated that Nelson Hydro cannot change how those rates are calculated, noting there’s no realistic place left to cut without sacrificing reliability.
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