Premium electric rate for home-based businesses

After more than three decades, home businesses pay the same power rate as other Penticton residents

Penticton city council says home-based businesses shouldn’t have to pay any more for electricity than any other residence.

Prior to 1985, home-based businesses were billed for electricity at the commercial rate. After that point, they had a separate listing, rate code 15. However, not all home-based businesses were tagged for the premium rate.

“That is one of the items that has been rectified when we created an interface between our business licensing area and our economic utility area. So now when a business licence is issued, that automatically goes over,” said Mitch Moroziuk, director of operations.

“Previous to that, that wasn’t the case. That is why we have some cases where some people aren’t paying rate code 15.”

Shawn Fillice, manager for the city’s electric utility, said they’ve found during consultation period that about half home-based businesses don’t actually do their business in the home. An example, he explained, would be someone who operates a food truck, where the business licence would have a residential address.

Fillice said on the other hand, 100 per cent of home-based business believe they shouldn’t have to pay a premium for electricity. There are arguments for both sides, he said. Home-based businesses say that most electrical use relates to regular home activities, while those in favour of a premium say people who use more should pay more and that a lower rate, because the business is located in the home, is essentially a subsidy.

Fillice recommended removing the home-based business class, saying he couldn’t justify why home-based businesses should be charged any differently.

“I don’t see much difference in the use of a home for business than a teenager sitting around and playing Xbox all day,” said Coun. Max Picton, agreeing with Fillice.

Council voted unanimously to remove the concept of a home-based business premium but were more divided on the subject of net-metering, where someone with solar panels or another way of generating electricity wish to sell it back to the Penticton grid.

Currently, there are only about 20 customers with net-metering accounts in Penticton. In those cases, the city is not charging the $2,000 fee to install those connections; the cost is covered by the city’s electric utility. Fillice pointed out that essentially “all the other ratepayers pay for it right now.”

Fillice said customers should not have to pay for services where another customer derives sole benefit.

“I don’t believe it should be coming directly from the electric utility,” said Coun. Campbell Watt, who was also opposed to allowing the cost to be spread out over a five-year period.

Council voted to approve changes that would see the cost transferred to the homeowners, with Coun. Andre Martin opposed and Coun. Helena Konanz absent.

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