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Penticton making switch to electricity rates
Penticton residents have a few days left to insulate themselves against a jolt in February, as users will see a 6.24 per cent increase on residential electricity bills next month.
On Monday, council moved the sixth alternative proposed by staff to not only cover the Fortis electricity rate increases that were effective Jan. 1, but offer a rebalancing of rates from industrial and commercial users to residential rates.
City estimates indicate an average residential customer currently pays $90.30 per month for electricity costs, which is set to increase to $95.94 per month under the new rates.
Coun. Helena Konanz said she was pleased to see the utility department exploring alternative methods of power generation to help cut the costs in future.
“We all feel like we’re being strong-armed by our utilities and the companies we buy our utilities from,” she said.
Fortis B.C. increased its retail rate for selling power by an approximate four per cent as of Jan. 1, and cost service adjustments between various customer classes caused some rates to increase and others to decrease. Operations director Mitch Moroziuk explained that the adjustments caused City of Penticton rates to be further out of line with the cost of power across the province.
While Penticton residential users paid on average 8.6 per cent less than Fortis residential users, local commercial and industrial users paid more. Fortis commercial customers paid 8.5 per cent less, while industrial users were charged 16 per cent less. A public input meeting held last Wednesday revealed some heavy industrial users were facing monthly utility bills in the $50,000 to $60,000 range.
As a result, staff recommended electricity rates be adjusted to reflect provincial rates. Rather than applying a four-per-cent increase across the board of various users as per past practice, Moroziuk explained, the increase would be recovered mostly through residential rates.
Under the new rate schedule, commercial users including a variety of larger-scale consumers like School District 67 will see a marginal 0.07 per cent increase. An average commercial user will pay $592.57 next month, up 40 cents from $592.17.
Industrial users will not see any changes from 2011. Those primary customers are billed an average of $18,068.94.
Coun. Wes Hopkin said the rebalancing will help make the area more competitive, and he reminded the community that the city’s proposals were in reaction to Fortis rate increases.
“The reason we’re undertaking this proposal at all is because Fortis has increased their rates,” he said. “This is our costs for our inputs.”
Hopkin also asked whether Fortis’ new two-tiered system could be applied to Penticton’s rate.
According to a release, Fortis is rolling out a residential inclining block rate this year that will charge Fortis customers less on the first 1,600 kWh every two months, and increase for usage above that. Those using the average of 2,100 kWh, it claims, will see no significant changes to their bill; those consuming less than 1,600 kWh will see more savings.
Moroziuk explained that Fortis’ two-tier rate will come into effect on July 1 of this year. While Penticton’s residential rates are not split on consumption, he said staff could investigate how to implement a similar rate structure, but it would likely mean users at the top end of consumption would have to be charged more to make up the revenue lost from the lower end.
The utility’s operating budget is $35.37 million, and $23.66 million of that is electrical purchases from Fortis.
In the 2012 budget, $4.97 million will be set aside for capital upgrades, including several designated as new system capacity projects. In 2012, the main projects that have been approved are: a voltage regulator on Middle Bench Road to address low voltage issues on the Naramata Road feeder ($256,000); a feeder tie between Waterford, Huth and Carmi ($330,000); a step transformer to tie Carmi’s eight kilo-volt line to Waterford’s 12 kilo-volt ($556,000); an express feeder and voltage regulator to improve the backup level between Carmi and Westminster substations ($730,000); upgrades to the egress cable on R-34 at Westminster substation due to overloading ($170,000); and a new tie between R-6 and R-32 to improve the Huth backup ($237,000).
Coun. Andrew Jakubeit added the capital upgrades were necessary to “maintain the integrity” of the system.
Council unanimously approved the sixth alternative for electrical rate increases. Mayor Dan Ashton was absent from Monday’s meeting due to illness.