Penticton City Hall. (File photo)

Penticton City Hall. (File photo)

Penticton council eyeing compromise 2% electrical rate hike

The original increase that city staff were proposing was 5%

After a lengthy discussion over whether to put another freeze on electricity hikes, Penticton council went forward with an increase of two per cent for 2023.

The city had been recommending a five per cent increase to bring the rates closer to those of Fortis, who the city buys electricity from. Electrical utilities haven’t been increased in six years, and in 2021 council voted to have the the rates for Penticton residents and businesses cut by three per cent in an effort to make the year a little easier.

At the Tuesday meeting, coun. Helena Konanz introduced a motion to freeze the electrical rate, and after discussion among council members, a compromise of two per cent increase was proposed instead. That increase passed the first three readings in a split vote.

According to city staff, if the electrical rate was frozen for 2023, the city would have to pull $3.5 million from the general budget to balance the electrical utility because Fortis is rising its rates. The city already had to pull $2.2 million in 2022 with the freeze in that year.

Konanz raised the issue of the city’s inter-fund borrowing of over $4 million to fund a portion of the Lake-to-Lake Bike Route, and questioned the use of those reserve funds in the face of high electrical costs and expected increases to other costs such as groceries that regular people face.

“Our electrical bills are one thing some our citizens have to choose, between going to the food bank or not during the winter,” said Konanz.

READ MORE: After 6 years without change, Penticton looking at hiking electricity costs

Coun. James Miller echoed Konanz’ concerns about the impact on Penticton residents. He also noted that the city was in a similar position in 2022 when it increased the development cost charges after they had been stagnant for years.

“I think maybe the lesson that needs to be learned here, similar to the DCCs in that we were very generous in not increasing them when maybe we should have had one or two per cent increases all the way along rather than hit people at one time,” said Miller. “So in one way the city has been a victim of its own generosity.”

Coun. Campbell Watt noted that the city’s utility rate review, which will look at not just the electrical rates but also water and sewer, is being prepared and set to be in the new year. Once the review is finished, further changes to rates are likely to be suggested based on its findings, and Watt was concerned about locking in an increase or freeze before that information is available.

The two per cent increase to the electrical utility, along with the four per cent increases to the sewer utility and the 0.6 per cent water utility rate increase, will have to come back to council for one more vote before being adopted.

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