An application to freeze BC Hydro rates filed last fall has been rejected, meaning bills are expected to increase by 3 per cent in April.

The British Columbia Utilities Commission announced its decision Thursday, after a panel reviewed the pitch for a hold on hydro hikes for one year.

Acting on the direction of the Horgan Government, BC Hydro applied for the freeze in November. The NDP prematurely announced the freeze at that time, though the application had not yet been approved.

In a statement, the BCUC said it acknowledged the increase was significant, but that there was "insufficient regulatory justification to warrant lower increases."

Instead, BC Hydro will go ahead with a 3 per cent increase scheduled under the previous government. The Crown corporation announced its plan two years ago to increase rates by 4 per cent that year, 3.5 per cent in 2017 and 3 per cent in 2018.

The panel added that even the increases starting next month do not fully recover BC Hydro's forecast revenue requirement – a number including operating costs and capital expenditures.

Energy Minister Michelle Mungall said Thursday she was disappointed by the rejection, but that the government was unable to override it. She added the province will move forward with lifeline rates, a system which will allow some lower income customers to pay lower rates.

"We completely understand the affordability crisis so many families face, and will be taking action to quickly address the need to reduce electricity costs for those who need it most," she said in a statement.

Additionally, starting in May, anyone dealing with an emergency such as loss of employment or unanticipated medical expenses will be eligible for a grant toward their hydro bill. The grant is up to $600 and does not need to be repaid, Mungall said.

The province is also phasing out provincial sales tax on non-residential electricity, and BC Hydro announced a winter payment plan last month aimed at helping customers pay off some of their bills during months where they use less.

About 90,000 customers paid their December 2017 bills late, the province said, and an average of 10 to 15 per cent pay their bills late each month.

The NDP also announced it would conduct a review of BC Hydro to find cost savings that could help keep rates low in the future. It expects to provide further details on the scope of the review in the coming weeks.

While the premier initially backed the rate freeze in November, earlier this year John Horgan said it may not be the best way to ease customers' bills. 

In January, Horgan said he felt targeted decreases would be more effective than a blanket reduction. The government did not ask BC Hydro to retract its request for a freeze, but said it was also looking at targeted programs for those needing assistance.

Last year, Horgan campaigned on a pledge to freeze rates in the province, noting that prices had climbed more than 24 per cent over the last four years under Christy Clark's Liberals.

In a statement issued following the decision Thursday, Liberal Leader Andrew Wilkinson criticized the NDP for announcing the freeze before it was official.

"Once again, we see the BC NDP government making reckless promises they can't keep," he said.

"The same NDP that found it so easy to make big promises during an election campaign finds itself, once again, unable to deliver on them when in government."

Wilkinson pointed out other campaign promises as yet undelivered, including a renters' rebate and $10-per-day child care. He said B.C. residents planned their budgets based on promises made by the party, and are now "left in the lurch."

Green Leader Andrew Weaver said he was glad that the NDP was respecting the BCUC's independence, saying the commission makes its decisions based on evidence and the interests of ratepayers.

"If governments had always done this, British Columbians would not be facing the travesty of the Site C boondoggle… Respect for proper process is essential for public trust in government and for the integrity of our democracy," he said in a statement.

With files from CTV Vancouver's Bhinder Sajan