Government keeping out of FortisBC rate review

Customers in the South Okanagan-Similkameen have complained about sky-high electricity cost, but energy minister isn't getting involved

BCUC Briefing Note-FortisBC Conservation Rate



It doesn’t appear B.C.’s energy minister is interested in wading into the controversy over FortisBC’s two-tiered electricity rate.

“While the ministry is monitoring the impact of the conservation rate structure, FortisBC is a privately-owned utility and its rates are regulated by the (B.C. Utilities Commission),” Energy Ministry spokesperson Matt Gordon said in a statement.

“FortisBC is conducting a review of the residential conservation rate as required by the BCUC and will be submitting a report this fall. Customers who have concerns are encouraged to participate in this review by contacting the BCUC.”

The report was ordered by the BCUC following customer complaints about the new rate structure, which reduced the price for energy use below 1,600 kilowatt-hours in each billing cycle, but increased the cost for consumption over that mark.  The rate, a version of which is already in use by BC Hydro, is meant to encourage energy conservation and was expected to reduce costs for 75 per cent of FortisBC’s customers when it was implemented in July 2012.

However, local governments officials from around southern B.C. have raised concerns about the rate’s impact on people who have no choice but to heat their homes with electricity. Three resolutions regarding the issue were on the agenda at the Union of B.C. Municipalities convention last week in Vancouver, although delegates only had time to vote on one of them.

Keremeos Mayor Manfred Bauer, whose council sponsored one of the resolutions that was not addressed, nonetheless found plenty of support among counterparts.

“No doubt that there’s a lot of unhappiness out there in regard to the two-tier rate system,” he said.

Bauer also noted that even if 75 per cent of FortisBC customers do realize savings with the new rate, “they’re still ignoring the 25 per cent who are usually at the lower end of the pay scale.

That assumption will be tested in the company’s rate review, which will examine the initiative’s effectiveness and impacts on the bottom-line of both the business and its customers. FortisBC originally planned to prepare a report by the end of April 2014, but the BCUC ordered a preliminary review by the end of October after receiving 149 customer complaints during the rate’s first year in operation.

That’s about five times the total number of FortisBC customer complaints received by the BCUC over the previous three years, according to a briefing note prepared by a commission employee and obtained by the Western News under freedom of information legislation.

Most of the seven-page briefing note dated Aug. 20, 2013, was redacted to protect policy recommendations.

However, it did contain excerpts of complaints from seven unidentified customers, four of whom mentioned the increasing cost of operating environmentally friendly heating systems.

“We have spent a tremendous amount of our personal financial resources in an attempt to do the right thing for the environment,” said one writer.

“Please don’t punish us forevermore with exorbitantly high electrical rates,” wrote one customer with a geothermal unit.”

Another customer with a heat pump noted he or she once had a utility bill under $1,200 for an entire year, “until your utilities commission and the power company … began to jack the rates regularly. The end result now is my bill is $1,025.63 and that is just the first quarter of 2013.”