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: editor@pentictonwesternnews.com.

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

Just Posted

Penticton shelter meeting current need, accepting donations of blankets, clothing

The shelter offers 30 beds year-round and 25 more temporarily over the winter

Okanagan Similkameen could have a sister city in the south of France

Regional District of Okanagan Similkameen considering agreement with wine region in southern France

Nature Wise: Thoughts in parting

Bob Handfield passes Nature Wise column on

Bob Ross is coming to Penticton in 2020

32 of the late painter and TV celebrity’s works will be on display at the Penticton Art Gallery

Princess Maggie presents Children’s Winter Carnival on Dec. 14

The Leadership class is hosting the event from 12:30 to 4 p.m.

VIDEO: Boys help rescue Cariboo bear cub

The cub, weighing just 24lbs, has been taken to wildlife sanctuary in Northwest B.C. for the winter

Doors open to Vernon’s first refill store

Vernon’s Refill Store may be answer to plastics problem

Okanagan RCMP not toying around when it comes to impaired drivers

Saturday, Dec. 7 is National Impaired Driving Enforcement Day

‘Things haven’t changed enough:’ Ecole Polytechnique anniversary prompts reflection

Fourteen women were fatally shot by a gunman at the Montreal school on Dec. 6, 1989

Bear raids freezer, gorges on Island family’s Christmas baking

Hungry bruin virtually ignored meat and fish, focused, instead, on the sweets

Crown delves into Sagmoen’s history with North Okanagan sex workers

Decision on validity of police search warrant will be made on Monday, Dec. 9

Kelowna man attempts to steal bait bike from RCMP parking lot

38-year-old Brian Richard Harbison is facing several charges

Summerland businesses participate in Sip N’ Shop

Downtown event on Dec. 14 will feature local beverages

B.C. pharmaceutical company’s stocks double in value after successful lupus drug trial

More than 40 per cent of patients using voclosporin saw improvements in kidney function

Most Read