The City of Penticton received an update from InterGroup and the utility rate review committee on July 16, which is recommending the city freeze the current electric utility rate until 2022. It is also recommending an increase of 0.6 per cent per year for water utility and 9.5 per cent per year for waste water treatment utility (Black Press file photo)

Committee recommends rate freeze for City of Penticton electricity until 2o22

The committee also recommended minimal increases for water and waste water treatment utilities

InterGroup is recommending the City of Penticton not implement a rate increase for its electric utility until 2022.

Council was last updated in April about the ongoing utility rate review conducted by the utility rate review committee, and since then the city hosted multiple public feedback sessions to provide information about the preliminary rate proposals and obtained feedback. According to the presentation, prepared by consultant InterGroup and the committee, 84 per cent of survey respondents agreed with the proposal to freeze electricty rates until 2022, while 48 per cent of respondents disagreed with the proposed sewer rate increases of 16.5 per cent for 2020, 16.5 per cent in 2021 and 3.7 per cent in 2022.

“When we talked to people through public engagement, at the time we were dealing with preliminary rate proposals for electric, water and sewer utilities. We’re proposing to freeze electric utility rates, so no increases for three years, and we’re also proposing relatively modest water rate increases of 0.6 per cent per year, four per cent for agricultural water — and the public was generally in favour with those proposals,” said Andrew McLaren with InterGroup. “The sewer rate proposal had some revenue issues so we were looking at fairly high sanitary sewer rates, which was a major issue during the public engagement process. We also asked if Penticton should have a conservation water rate, so when people use more water their price per each unit of water gets higher the more you use, and people expressed interest in that. They also discussed debt financing for the waste water treatment plant project to moderate some of the potential rate increases.”

READ MORE: Minimal rate increases for Penticton utilities

McLaren said the committee also addressed concerns previously mentioned by council about overhead costs and the inclusion of facility costs. The committee “removed costs from the overhead pool which has the result of lowering the administration charges that get charged out to utilities, which makes about $100,000 difference which would need to be made up through (the city’s) general fund rather than recovered through the cost of utilities.”

To address the concerns with the high waste water treatment utility increase, the city revised its capital project plan to defer or delay certain projects and removed facility costs from the overhead pool that reduced overhead allocations to the utility. The committee also recommends an interest free transfer of $2 million for a 20-year period from the electric utility reserve to mitigate sanitary sewer rate increases.

“This transfer would keep the sanitary utility reserve fund at the minimum target, so it helps smooth it out and get over the hurdle that’s caused by the reserve fund balance,” said McLaren. “What we wind up with (with these recommendations) is rate increases of about 9.5 per cent on average for each year going forward. If council decides to maintain electrical reserve without an interfund borrowing to the sanitary sewer utility, the annual average rate increases for sanitary sewer utility would be 9.8 per cent.”

There are 647 bare land strata dwellings in the city, including 272 individually metered dwellings and 375 dwellings served by bulk water meters, and McLaren said the concern was raised that individually metered customers pay the same fixed rates but do not receive the same level of service in terms of maintenance and replacement. The committee recommended implementing a reduction in the fixed charge to these individually metered customers based on the average fixed charge per unit in stratas with bulk meters.

“This will reduce the monthly fixed charge paid by individually metered strata dwellings to 30 per cent of the monthly fixed charge paid by single family dwellings,” states the report. “This will reduce revenues to the water utility by about $75,000.”

To report a typo, email:

Jordyn Thomson | Reporter
Send Jordyn Thomson an email.
Like the Western News on Facebook.
Follow us on Twitter.

Just Posted

Summerland cannabis shop receives approval in principle

Inspection now required before Green Gaia may sell cannabis

Kelm wins Okanagan Ogopogo tubbing championship

Robbie Kelm edged out Dr. Lloyd Westby to take the Great Ogopogo Bathtub race title

Okanagan team bows out early at B.C. baseball championships

The SOMBA Tigers U18 AAA squad lost its first two games at the provincials

Laugh out loud Okanagan theatre group production

The St. Andrew’s Players production of Drinking Habits hits the stage Aug. 23 for nine shows

Osoyoos woman who threatened mom and baby with butcher knife sentenced

Sharon Constance Forner pleaded guilty to one criminal charge and was sentenced

Canadians killed in Afghanistan honoured during emotional dedication ceremony

One-hundred-fifty-eight Canadian soldiers died during the mission

It’s snow joke: Up to 30 cm of snow expected to fall in northeastern B.C.

Alaska Highway, Fort Nelson to be hit with August snowstorm, according to Environment Canada

‘I’m just absolutely disgusted’: Husband furious after B.C. Mountie’s killer gets day parole

Kenneth Fenton was sentenced to prison after he fatally struck Const. Sarah Beckett’s cruiser

Sea-to-Sky Gondola in B.C. likely out of commission until 2020

Sea to Sky Gondola carries between 1,500 and 3,000 people every day during the summer season

Auntie Says: A different spin on to the bullying problem

Faye Arcand is a freelance writer living in the South Okanagan

Helicopter-riding dog Mr. Bentley now featured on cans of new B.C.-made beer

Partial proceeds from every pack go to Children’s Wish

PHOTOS: Weapons seized at Portland right-wing rally, counterprotests

Not all who gathered Saturday were with right-wing groups or antifa

Good morning bats! Salmon Arm office receives surprise visit by winged critters

Pair of bats found huddled together on wall in the sun outside downtown office

Most Read