Electric rates are likely to rise a little more than expected thanks to a miscalculation in the rate hikes from FortisBC.
Rather than 5.2 per cent, the actual rate increase approved by the B.C. Utilities Commission comes to a total of 5.8 per cent.
According to Mitch Moroziuk, director of operations for the City of Penticton, FortisBC contacted him last week after reading reports about the expected 5.2 per cent increase. However, Moroziuk said the additional 0.6 per cent will not have a large effect on the average residential customer, amounting to another 54 cents above the expected $5 to $7 increase already on the books.
Council has three alternatives on the table for raising electrical rates, applying the increases to either the wholesale rate, the retail rate or an average of the two. With the updated FortisBC increases, the electric hike will now range from 6.18 per cent to 7.87 per cent.
Those amounts include a 1.28 per cent rate hike from the city utility, intended to cover differences between the model the city uses for cost projection and the actual costs observed. The main problem arises from the rate used to calculate line losses — the amount of power lost to resistance in the lines.
According to Eric Livolsi, the operations manager for the city’s electric utility, other communities report their line loss at 6.5 to seven per cent, similar to what Penticton has observed. However, Penticton has been using a figure of four per cent in their cost calculations,
“That appears to have been used for some time,” said Livolsi. “In the past at lower loading levels, that may have been sufficient.”
Bus rates may also be getting a hike sometime in 2013. While cash fares are to stay the same, Moroziuk recommended an across-the-board increase to the price for pre-bought tickets, day and monthly passes, which would rise to $50 for adults, $35 for seniors and $30 for K-12 students
The need for the fare hike, which was mirrored by a similar rise in rates for users of the HandyDart system, was questioned by councillors, who worried that it might cause a drop in the number of transit users.
“I wouldn’t be in favour of increasing rates for anyone, let alone seniors,” said Coun. John Vassilaki.
Moroziuk explained that the fare hike — planned to start midway through 2013 — would not only bring Penticton’s rates in line with B.C. Transit expectations, the loss in riders would be balanced by new riders drawn by planned improvements to the local transit system.
Those improvements include not only the purchase of a new Handy-Dart bus, but increased service on the Main Street and Sunday routes.
Further discussion and a decision on the proposed fare increases will come, according to Moroziuk, later in the budget discussion process, when council discusses operating budget items. Council hopes to give the 2013 budget the first three readings at Monday’s regular meeting.