A new pricing structure for power use that was meant to encourage energy conservation has instead left some area residents struggling to keep their lights on.
FortisBC, which provides electricity to most of the region, last July swapped its flat rate for a two-tier system that penalizes energy hogs. Customers were also hit in January with a 6.6 per cent rate increase.
It all added up to an expensive winter for some people, including Robby Kilborn, who lives with his sister in Olalla.
Their home is divided into two separate units, but they share a single FortisBC service, which cost them $2,110.94 for the four-month period ended Feb. 26. That represented a $553.67 jump from the same period a year earlier.
Kilborn said other people he surveyed in his Similkameen community have noticed similar increases and, since many are also on fixed incomes, have turned down their thermostats to help make ends meet.
“We haven’t been using heat ever since we got that bill in February,” he said.
Kilborn is convinced the problem lies with metering equipment. His most recent four-month bill showed his house used an average of 3,969 kilowatt-hours (kWh) per month, about three times more than an average home.
“There is definitely something screwed (up) with the meter or the readings,” Kilborn said.
The issue has become so contentious that Bob Gibney, a senior manager from FortisBC, last week attended a board meeting at the Regional District of Okanagan-Similkameen to explain the cost hikes.
Gibney told RDOS directors the company is confident the increases are not a result of faulty equipment, but rather the new two-tier rate structure. He also noted the company’s prices are approved by the B.C. Utilities Commission, which ordered implementation of the new conservation rate.
“Our company obviously is receiving the brunt of it because if you get a bill from FortisBC it’s our name on the letterhead,” Gibney said.
“The intent of the (conservation) rate probably was fine,” he added. “It’s for people who are energy-abusers, that are not paying attention to conservation. The downside is, if you don’t have natural gas and you’re depending 100 per cent on electrical for your heat and other services, you’re pretty well bound to the electrical bill and what the results are from that.”
For each 60-day billing cycle, FortisBC’s residential customers pay a service fee of $30.33, plus 8.8 cents per kWh up to 1,600 kWh. Above that threshold, they’re charged 12.95 cents per kWh. Prior to the switch, customers paid a service fee plus a flat usage rate of 10.22 cents per kWh.
Gibney said people who heat with electrical appliances could save “in the neighbourhood of 40 per cent or more” if they switched to natural gas furnaces, although that service isn’t available in all areas.
Keremeos Mayor Manfred Bauer told Gibney that keeping electricity consumption under 1,600 kWh is “just not achievable” for many people who live in older homes and can’t afford energy-efficiency upgrades. He suggested the conservation rate is more of a punishment than an incentive to save energy.
“I don’t see any reward system here,” he said.
Bauer later convinced fellow directors to write a letter to the BCUC asking it to consider bumping up the threshold in some areas.
Gibney told the RDOS that the new conservation rate is “revenue-neutral” for his company and there’s little it can do to address the issue, outside of relaying customers’ concerns to the BCUC.
In its January 2012 decision on FortisBC’s new price regime, the BCUC noted the introduction of the conservation rate “is befitting an era where the provincial legislation encourages conservation.”
The decision goes on to explain that the 1,600 kWh threshold was selected because it represented the median energy consumption of FortisBC residential customers for a billing cycle in 2009 and 2010. The average consumption per cycle during that period was 2,100 kWh. It was also noted that B.C. Hydro’s two-tier rate structure was implemented in 2008 with a 1,350 kWh threshold.
FortisBC told the commission it would report out next year on the effects of the new rate, including an estimate of the amount of energy saved because of it.
The BCUC also suggested the company work with its wholesale customers, like the City of Penticton, to help them implement conservation rates.
City of Penticton spokesperson Simone Blais said the municipal electrical utility has no plans at this time to introduce its own conservation rate, but is monitoring FortisBC’s program. The city’s utility is not regulated by the BCUC so it can’t be compelled to switch.
With files from the Keremeos Review