Utility rates could rise by 18 per cent over five years

Penticton residents are paying too little for some utilities and too much for others, according to a recent Utility Rate Review.

Penticton residents are paying too little for some utilities and too much for others, according to a recent Utility Rate Review.

“The electric, water and sanitary sewer utilities require rate increases to maintain the financial stability of the utilities,” said consultant Andrew McLaren, who was engaged in March to review rate structures at the city’s utilities. “The biggest objective here was to make sure all three facilities are financially sustainable.”

According to McLaren, the majority of B.C. communities don’t charge enough for their water and sewer to fully recover the costs of operating those utilities.

“Cost of service analysis indicated that on average, residential customers are likely underpaying on electricity and water rates and overpaying on sewer rates, compared to average cost to serve them,” said McLaren. “Commercial and industrial customers, on the other hand, are overpaying on electricity on water but likely underpaying on sewer rates.”

If council chooses to implement the recommendations contained in the report the average resident could expect to see their utility bills rise by $34 from $189 to $223 between 2016 and 2020, approximately an 18 per cent increase. Commercial users would be the hardest hit, with a 22 per cent rise over the same period and industrial users  would see a 14 per cent increase.

Coun. Max Picton questioned why the report didn’t include an institutional rate for customers such as Penticton Regional Hospital or School District 67.

“When we looked at the cost of service analysis, we didn’t see any cost basis why those customers were cheaper to serve. It really comes down to a policy decision,” said McLaren. “You will either have to raise more money from other customers to make up the difference or you will have to reduce the dividend you take from the electric utility.”

The report now goes to the public for another round of input, but Mitch Moroziuk, director of operations, said there wouldn’t be an open house. Instead the information will be put online, though Moroziuk said they also wanted to create a version that was more “user friendly.”

“Some people think this is very interesting stuff. But we have to get it to a level that the public can grab hold of it and see what it means to them,” he said. “We want to put that in there as well.”

Jakubeit said he expects the final report for the Utility Rate Review to come before council again in early December, with a summary of community feedback, collected both during the consultation process and the presentation being made public.

“We will have to make some decisions on what recommendations we endorse to work on or delay, whatever council’s direction is,” said Jakubeit.

 

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