Distribution Extension Policy changes
Connecting customers to our grid
BC Hydro's Distribution Extension Policy sets out how costs are allocated between customers for new or upgraded connections to our distribution system.
There are four components to a distribution extension:
- The extension of BC Hydro's existing system to a new customer's site.
- Distribution system upgrades (system improvements) to accommodate a customer's load request.
- The service connection.
- Metering to allow us to deliver electricity to the customer.
New policy effective July 5, 2025
After engaging closely with customers and stakeholders, we applied to the B.C. Utilities Commission (BCUC) for updates to our Distribution Extension Policy in June 2024. The BCUC approved our application on March 5, 2025, and the new policy took effect on July 5, 2025. The BCUC also approved changes to make electrification easier in Non-Integrated Area (NIA) communities. These communities now have the same extension policies as other areas, aligning with a broader shift to have NIA customers pay the same rates as those in integrated areas.
The updated policy lowers the cost of connections for many customers, speeds up connection timelines, and better balances cost sharing between customers. Most importantly, it provides greater cost certainty for developers and helps to support investments in affordable housing, including larger multi-unit developments as well as electrification of homes and businesses.
For more information about the new policy, see the sections below and the materials presented [PDF, 1.9 MB] at virtual information sessions we held in May 2025.
Key policy changes
Under the new policy, we've eliminated system improvement costs for most new customers – except in extraordinary circumstances – and have increased our maximum contribution allowance to offset extension costs.
Learn about this and other policy changes in the sections below.
- We've increased our investment so that most projects are no longer required to contribute to system improvement costs.
- This change eliminates system improvement costs for more customers and provides a simpler cost model for customers, except in rare cases where system improvement costs are very high relative to the corresponding customer load and/or benefits.
- This change helps remove investment uncertainty for developers to help complete developments faster.
| Customer connection size | BC Hydro's System Improvement Investment |
|---|---|
| Under 1 megavolt-ampere (MVA) | Up to $1 million |
| Over 1 MVA | $1 million per MVA, pro-rated by kilovolt-ampere (kVA) up to a maximum of $10 million |
| If the system improvement cost exceeds BC Hydro's maximum investment of $1 million per MVA, up to a maximum of $10 million, the customer will pay for the balance of the system improvement cost. | |
- We've increased our maximum contribution allowance towards extension costs and now allow contributions to offset service connection costs to further reduce new customers' costs.
- We've updated the maximum contribution allowance calculation to improve alignment with the revenue we expect to receive from a new connection.
- Our contribution will be updated annually by the approved general rate increase.
| Rate class | BC Hydro's maximum contribution allowance |
|---|---|
| Residential (per dwelling) | $2,782 |
| General Service (per kilowatt (kW) of estimated billing demand) | $518 |
| Street lighting (per fixture) | $180 |
| Irrigation (per kW of estimated billing demand) | $495 |
- The extension fee refund provides a framework for the first customer that paid for a new distribution extension to recuperate costs if subsequent customer(s) connect to that same extension.
- The new extension fee refund process will improve equity and streamline the process for customers.
- Changes include: refund eligibility criteria, automatic reviews by BC Hydro, and tiered refund windows by extension fee.
For all extension projects greater than $25,000 and after the extension has been energized, we'll automatically review and provide refunds (if eligible) back to the initial customer as follows:
| Extension fee | Review frequency |
|---|---|
| Under $25,000 | No refund available |
| $25,000 - $999,999 | Fifth anniversary date of energization |
| $ 1 million - $4.99 million | Fifth and tenth anniversary date of energization |
| $5 million or higher | Fifth, tenth, and fifteenth anniversary date of energization, with option to apply for annual review |
- We provide financial assistance to residential customers and farms connecting to our distribution system where a distribution extension is required.
- Assistance has expanded to include three-phase overhead distribution and non-residential services that provide benefits to a community, such as band offices, community centres, and water treatment plants.
- See Charges and fees for electrical connections for updated standard charges.
- We've removed separate standard charges for non-integrated areas.
- Customers in these areas are now charged the same as those in the integrated system.
No, you'll need to contact your BC Hydro design representative to request an updated invoice that reflects the new policy.
No, if your project has been invoiced prior to July 5, 2025 and you pay that invoice – even after July 5, 2025 – you won't qualify for a refund or reissue under the updated policy. This is because the invoice date reflects the extension policy in effect at that date. Invoices are valid for 90 days and once paid, the project is governed by the policy it was invoiced under.
For example, if we issue an invoice before July 5, 2025, and you pay the invoice after July 5 (but within the 90 days of validity), the project will proceed under the policy that was in effect at the invoice date (not the payment date). By making payment, you become ineligible for a new invoice under the new (post-July 5) policy.
Invoices expire 90 days after the invoice date. If your invoice expires, you'll need to request a new invoice from your BC Hydro design representative.
No, only projects invoiced after July 5, 2025 are eligible under the new extension fee refund policy.