Two-tiered electricity rate working as intended

A new report from FortisBC claims nearly 70 per cent of its customers are saving money through the so-called conservation rate.

Power lines

FortisBC Conservation Rate Report



Concerns persist, but a new report from FortisBC claims nearly 70 per cent of its customers are saving money through a new two-tiered electricity rate.

The so-called conservation rate, introduced in July 2012 by order of the B.C. Utilities Commission in a bid to encourage energy efficiency, replaced a flat rate for electricity usage with two separate blocks that reduced the cost below 1,600 kilowatt-hours bimonthly, but increased the price above that threshold.

And according to FortisBC, the rate is working as intended.

The company’s latest report on the new arrangement filed at the end of November with the BCUC estimates the cost structure has saved up to 46 gigawatt-hours of electricity, or 3.3 per cent of total system requirements, and “results in no additional revenue” for the utility.

It also found 68.5 per cent of customers are paying less than they would have under the old flat rate, although 8.4 per cent have seen their bills spike by more than 10 per cent.

The report, which covers the period from July 1, 2012, to June 30, 2014, is the second such review completed by FortisBC and was requested by the BCUC in response to customer complaints about bill spikes.

FortisBC spokesman Neal Pobran noted in a statement that both reports “highlighted our concerns that this type of rate structure does have a greater bill impact on certain customers, primarily those who use electric heat or do not have access to natural gas.”

The latest report also examined possible changes to the price scheme to reduce the impact on such high-consumption customers, “however, any shift within a conservation rate means that one group will pay more than another,” Pobran said.

Any such changes would have to be ordered by the BCUC after it finishes looking over the company’s findings.

“The commission is still reviewing the report and considering what action to take, if any,” spokeswoman Alison Thorson said in a statement.  “Unfortunately, I can’t be more definite with how long the review will take.”

Included in the report, which was based on an analysis of 97,000 customer files, were comments from 18 customers addressed to the BCUC, all of which had names removed but were critical of the two-tier rate.

One customer in Kelowna noted his or her power bill had increased from $2,788 in 2006 to $3,837 in 2013, “in spite of a significant outlay of funds by us to install a heat pump and new furnace.”

Another customer argued that special consideration should be given to people who have no option but to heat their homes using electricity.

“We think you are really doing the province a disfavour by allowing this to continue. We and others like us have already or are considering resurrecting the old inefficient wood burning fireplace as an alternative to high priced electricity,” the person wrote.