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Penticton poised for electrical rate hike

It took four tries, but Penticton city council finally selected the middle path from the three alternatives staff suggested for raising electrical rates.

After an hour of discussion and four votes, council decided to move forward with a 7.03 per cent increase to electricity rates in the city, which they passed on the second try.

“I think this is the wrong alternative. I think there is a very good common sense put forward for alternative one,” said Mayor Dan Ashton, who twice voted against the successful proposal, which will slightly increase the city’s profit from its electric utility, increasing rates by averaging an upcoming increase from FortisBC against the electric utility’s wholesale power cost and the retail price charged to consumers.

“Profit isn’t a dirty word. If you look back on the last four years, it’s helped offset our budget. It’s really a dividend going back to our shareholders,” said Coun. Andrew Jakubeit, referring to the $3 million transferred from the electric utility coffers to Penticton’s capital works budget this year.

“I would remind you it is still not easy out there and there is an upgrade proposed of 1.28 per cent, which is going to add a substantial amount more, which we were losing before,” said Ashton.  “I would be far more comfortable to leave it at the status quo, because we do have a fair bit of money in our electrical accounts.”

Ashton’s preference would have been to apply the 5.8 per cent FortisBC increase with the city’s own 1.28 per cent “revenue loss increase,” at the wholesale cost level. A third alternative, adding both increases to the retail rate for a 7.87 per cent rise, was not discussed by council.

Coun. John Vassilaki voted against both alternatives each time they came up. His proposal was that the city should discard the 1.28 per cent increase, and keep electrical rates as low as possible.

“Can we not forgo that for one more year? If we can get rid of that 1.28, it will make a huge difference to the citizens of Penticton,” said Vassilaki. “It will make a huge difference, for example, to the school board. It will make a huge difference to them and to the industrial people who are paying thousands of dollars every month for their electricity.”

Though the public was welcome to speak to the increases, the only delegation was from School District 67. As a major power consumer, the school district was seeking relief from the increases to an electricity bill already onerous for the cash-strapped district, saying that they are paying almost 40 per cent more for power  compared to B.C. Hydro rates.

Other than Vassilaki’s attempt to discard the city-imposed part of the increase, council did not offer any relief to the school district, with four councillors, Jakubeit, Judy Sentes, Gary Litke and Helena Konanz supporting increasing the middle of the road increase. Litke, in particular, was surprised it wasn’t unanimous.

“I can’t believe we are having this discussion. It’s a business and if this is how we run it, we’re not going to stay in business very long,” he said, adding that the 7.03 per cent increase reflected good business planning and, in the end benefitted the taxpayers of the community.

“Alternative 3 actually reflected doing business and making a small profit and then paying dividends back to the shareholder, in terms of $3 million for capital funding. That has been a major source of funding for this municipality, its what has made us special,” Litke said. “If we are going to start running a business at a loss, we might as well divest ourselves of the business entirely.”

Council will approve the amendment to the city’s fees and charges bylaw at the regular Jan. 7 and Jan. 21 meeting, with the new electricity rates going into effect Feb. 1.

 

 

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