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Penticton electric rates on the rise

Get ready to pay more for electricity next year.

Residential households in Penticton could see their electric bill rise from an average of $93.42 per month to as much as $100.14 depending on what method city council chooses to apply upcoming rate increases.

Mitch Moroziuk, the city’s director of operations, said there are two increases coming from Fortis on Jan. 1, both mandated by the B.C. Utilities commission, for a total of 5.2 per cent. To that, Moroziuk said the city needs to add their own increase of 1.28 per cent. That, increase, he said, will make up for the difference between what the city’s model suggested the electricity revenue should be against the actual amount collected.

Moroziuk suggested the 5.2 per cent rate increase could be applied at either FortisBC’s wholesale rate, the retail rate Penticton sells electricity to customers; or at an average of the two. In all three options, the city’s increase of 1.28 per cent would be applied at the retail level.

Working with the wholesale rate would be relatively revenue neutral for the city, resulting in an overall increase of 5.69 per cent. But the city could generate  some extra revenue by increasing rates 7.2 per cent or 6.45 per cent.  In real world terms, that means that residential households in Penticton would see their electricity costs rise from an average monthly fee of $93.42 rise to $98.73 under the first option and $100.14 or $99.42 under the second and third options.

City staff did some comparisons of Penticton’s electric rates to other cities that operate their own utilities, as well as FortisBC and B.C. Hydro. They found that for residential customers, the highest rates were being charged by Kelowna and FortisBC, while the lowest were being charged by B.C. Hydro and Nelson.

“Penticton is currently in the middle of the pack,” said Moroziuk, explaining that “middle of the pack” describes Penticton’s commercial and industrial rates as well.

Moroziuk reminded council that they needed to consider ongoing work being done when they considered which path they should follow.

“We do have a couple of significant projects coming our way in 2013,” said Moroziuk, noting that the electric utility will be drawing heavily on their reserve fund to accomplish them.

“In 2014 we are actually predicting our reserve will drop to a negative number. In 2015 it will start to climb, but it will still be less than what we should have in there as a minimum balance,” said Moroziuk.

That, he said, is due to two major projects on the books, the planned on-bill loan program, intended to help residential owners finance home improvements to reduce electrical costs, and the $6 million Westminster substation upgrade.

The public will have a chance to have a say before the 2013 rates are finalized at a public input session on Dec. 17 before council makes its decision. The new rate structure will be finalized in January, to begin on Feb. 1.

 

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