There are only two sure things in life, the old saying goes: death and taxes.
And, apparently, the rising cost of electricity.
In 2013, B.C. Hydro, which services most of the province, was given permission to raise their chargers by 28 per cent over five years. That’s going to be echoed in FortisBC charges, and of course, in the City of Penticton’s rates as well.
As one of the few cities running their own electric utility, Penticton is in the rare position of having control over power costs affecting the community. The City of Penticton can talk all they want about treating the electric utility as a business, but since all the profits from the sale of electricity find their way, in one form or another, into city coffers, they also need to consider that profit percentage as a form of taxation, part voluntary and part involuntary.
Should the city run its electric utility as a break-even operation, businesses and residents might enjoy some of the lowest rates in the province, but taxes would have rise, or services cut, to compensate for the $3 million transferred to the city’s capital budget each year.
Over the years, city councils and staff have tried to keep electric rates somewhat in the middle of the pack, balancing the see-saw of tax versus power rates. Gradually though, the rising costs have come to be an increasing burden, especially on large-scale users like manufacturers or the Okanagan Skaha School District.
It’s time the city took another look at how it thinks about electricity charges. If it is a tax, then the city is missing a golden opportunity to use it as they do other taxes and charges. As an economic incentive, electric rates could be adjusted so the city is more attractive to commercial businesses, along with giving existing businesses a better chance to thrive.
It’s still a balancing act, and the money still has to come from someplace. But the city can afford to tip the see-saw a little more toward lower electrical rates, and reap some longer term benefits than the ability to declare a minimal tax hike.