By Scott Janzen, P.Eng., Electrical and Land Consultant
In British Columbia, hydroelectricity has long been a reliable and essential source of power. Yet many people might not realize that every kilowatt-hour generated through BC Hydro’s vast network of dams comes with a hidden cost in the form of water rental fees. These fees, paid to the provincial government, are woven into the electricity rates that all BC Hydro customers ultimately pay.
Last year, BC Hydro paid an estimated $362 million in water rental fees, part of the province’s structure for charging entities that use public water resources. In BC, water is legally owned and managed by the province, which grants the rights to use it for various purposes—like generating electricity—through a licensing system. This system is governed by the Water Sustainability Act (WSA), which authorizes BC Hydro to divert water but also imposes fees based on the volume used and the power generated.
For BC Hydro, water rental fees represent a considerable ongoing expense. But these fees are not absorbed by the utility alone; they are part of the costs factored into the rates that ratepayers see on their monthly bills.
How Water Rental Fees Affect Your Hydro Bill
The average water rental fee for BC Hydro is estimated to be around $6.53 per megawatt-hour (MWh) of electricity produced. Every customer, from homeowners to businesses, contributes indirectly to these fees each time they use electricity. It’s not an itemized charge on your bill, but it’s there in the rates BC Hydro sets to cover its costs, which include not just water rental fees, but maintenance, infrastructure, and operational expenses.
For ratepayers, this means that each time you turn on the lights, plug in an appliance, or charge your devices, part of what you pay covers the water used to generate that power. While individually it might not amount to much, collectively, these fees are a significant revenue stream for the province.
The Cost of Powering BC with Water
Water rental fees are a quiet but ever-present part of British Columbia’s electricity system. They’re a reminder that even natural resources have a price and that the cost of electricity goes beyond the infrastructure we see. So, the next time you turn on your lights, consider the broader costs that keep your power flowing—some of which are tied directly to the water moving through BC’s rivers and dams.
Scott Janzen, P.Eng., is an electrical engineer with over two decades of utility experience across Saskatchewan, Alberta, and British Columbia. He currently provides consulting on land and power issues. Scott can be reached at scott@e-landpower.com.
