By Bill Andrews and Tom Hackney

April 10, 2026

On March 24, 2026, the BCUC approved several major changes to BC Hydro’s net metering program. Following a lengthy proceeding, the panel approved:

(a) a new ‘net billing’ “self-generation” rate (Rate Schedule 2289) to replace the existing ‘net metering’ rate (RS 1289), with a ten-year transition for existing net metering customers (not 20 years as requested by BC Hydro and supported by BCSEA),

(b) a new ‘net billing’ “community generation” rate (RS 2290), with a 2 MW net injection maximum instead of the 1 MW limit proposed by BC Hydro and supported by BCSEA,

(c) a due date of April 2030 for an evaluation report by BC Hydro, and

(d) a 10 cents/kWh Energy Price for power delivered by participants to BC Hydro under the two new ‘net billing’ rate designs, to replace the kWh credit under the now-closed-to newcomers ‘net metering’ rate.

The BCUC also rejected (explicitly or implicitly) interveners’ various criticisms of BC Hydro’s rate design proposals and Hydro’s consultation with stakeholders. The BCUC panel emphasized that the application is a rate design proposal that must be evaluated according to rate design principles. The panel rejected all intervener arguments involving long-term resource planning, demand-side management, or ‘lessons’ from out-of-province jurisdictions. During the course of the proceeding, the panel had ruled that the carbon intensity of BC Hydro’s grid power is not within the scope of the proceeding.

BCSEA’s final argument emphasized BCSEA’s long-standing support for clean/renewable small-scale behind-the-meter electricity customer self-generation. BCSEA expressed opposition to changing the net metering rate design until the number of net metering participants reaches an objective threshold percentage (such as 1 percent) of eligible customers. (Currently, there are only about 15,000 net metering participants among more than two million BC Hydro customers.) BCSEA argued that the immediate objective should be to grow the number of participants in Hydro’s net metering program. Unfortunately, the panel went ahead and ruled on the rate design proposals.

The concept of ‘cost shifting’ played a key role in the proceeding. Cost shifting is said to occur where a rate (such as the net metering rate) recovers less than the utility’s full cost of serving participants in the rate and so such costs must be recovered from non-participant customers. Net metering is said to involve three types of potential cost shifting: (a) net metering program administration costs are borne by all customers, not exclusively by net metering participants, (b) net metering residential participants’ use of their own self-generation reduces the utility’s $/kWh revenue by more than any reduction in the utility’s costs of being able to provide electricity to residential customers during the coldest winter evenings, and (c) a net metering participant’s retail energy rate is higher than the financial value to the utility of net energy delivered by the participant to the utility and the financial shortfall is borne by all customers.

Needless to say, cost-shifting is generally considered undesirable in the realm of public utility regulation. (A common argument is that customers who struggle to pay their own electricity bills shouldn’t have to pay more to cover utility costs not recovered from net metering participants who can afford their own self-generation systems.) Incidentally, the ‘postage stamp rates’ principle – under which all customers within a certain class pay the same rates despite geographic differences in the utility’s cost of serving them – is considered okay, either because it is not truly cost-shifting or because it is an acceptable form of cost shifting.

Only the last of these three forms of potential cost-shifting is addressed by the change from ‘net metering’ to ‘net billing.’ Notably, the BCUC panel readily accepted the potential for cost-shifting under Net Metering because participants’ retail energy rates are higher than the financial value to the utility of net energy delivered by the participant to the utility. This is the rationale for the panel’s choice of ‘net billing’ over ‘net metering.’ The panel ruled that participants’ remuneration for net excess energy provided to BC Hydro should be based only on the financial value to BC Hydro (BC Hydro’s avoided cost). The panel emphasized that the remuneration should not include any financial value of any societal benefits of behind-the-meter self-generation. The panel found that net billing largely eliminates potential cost shifting due to remuneration for net energy.

Of particular interest to aficionados, the panel reconfirmed that the Bonbright principles for rate design are not applied by BCUC on a strict pass/fail basis. Also, the panel sought directional outcomes, not false precision. For example, 10 cents/kWh as the Energy Price, and the numerical net injection limits are ‘okay for now’ (our wording, not the panel’s).

The panel approved an instantaneous netting interval for the new self-generation and community generation rates. The panel acknowledged, but implicitly rejected, concerns by BCSEA that the solar and energy modeling tools available in BC support only hourly netting, not instantaneous netting.

In short, the BCUC panel determined that BC Hydro’s rate options for behind-the-meter self-generation should reduce cost-shifting by using net billing and a fixed “energy price” for net electricity exports to BC Hydro based on BC Hydro’s avoided cost only.