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Infrastructure needs make 'pay as we go' rates system a reality for B.C. Hydro: minister

B.C. Energy Minister Bill Bennett, shown in November, 2010, says energy rates will have to be raised in order to pay for infrastructure upgrades.

Deddeda Stemler/The Globe and Mail

B.C. Energy Minister Bill Bennett says hiking hydro rates would be "politically unpopular" for the B.C. Liberal government but that such increases are needed to pay for the hydro system.

"We have to pay as we go," he said Monday, after a tour of a $201-million hydro substation in central Vancouver set to open next spring that he said was part of the infrastructure those hikes will pay for.

"This is a very good example of an investment by BC Hydro that is absolutely essential in terms of having a reliable source of energy," he said. "You have to pay for it some way and the only place for BC Hydro to get money to pay for these investments is from ratepayers. That's the pressure on rates and the pressure we're currently trying to deal with to figure out how much the rates are going to have to go up."

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He added: "Rates will have to go up to pay for all of this investment."

He said he doesn't expect to have a specific rate proposal to release before Christmas, but that it will be "absolutely only the necessary amount."

He has previously said rates will increase beyond the planned 17 per cent over three years. About a year ago, the Liberal government ordered rate increases reduced from a recommended 32 per cent over three years to the 17 per cent target.

"We have the fourth lowest rates in North America. We're not an expensive jurisdiction for electricity but we have to pay as we go."

The opposition NDP has said BC Hydro is making decisions without oversight and the Liberals are not being forthright with the public.

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