EDITORIAL: Static policy needed for electricity rates

Debate over how to apply the increases in what Fortis charges the city for electricity to what Penticton customers are charged begins.

The annual debate over how to apply the increases in what Fortis charges the city for electricity to what customers of Penticton’s electric utility are charged has started again.

Each year, the three alternatives are carefully set out. There’s the Grinch option of applying the percentage increase to the retail rate resulting in the biggest increase, especially to the commercial users, when the new rates take effect in the new year.

There is the Santa option applying the increase to the wholesale price, effectively passing through the increase to the consumer, without an increase in the cash coming into city coffers.

Then there is the middle ground of averaging out the increase between wholesale and retail. Let’s call that the sugarplum option, since it’s most often what council picks to do.

Penticton is one of the few cities operating its own electric utility and is able to plow the resulting profits generated back into city coffers, in terms of about $3 million annually for capital projects and more into the electrical surplus reserve fund, used to pay for improvements to the grid.

The Grinch option means more money coming in, and more the city can do with it. The benefits of the Santa option are obvious: more money in consumers’ pockets, especially when it comes to commercial and industrial customers who pay a higher rate, thus making Penticton a more attractive place to do business.

For an average industrial customer, the difference between the city being a Santa or a Grinch could be about $3,600 in power costs.

This question will occupy a significant portion of the budget talks in coming weeks as council seeks public input on Jan. 7, before making a final decision on Jan. 12. That, in itself, is costly. And it will be repeated next year, since the increases aren’t going to go away.  It’s time city council established a policy on how to handle this rather than going over the same ground each year.

 

Just Posted

This parking on the east side of Martin Street will be removed permanently Monday morning (June 21, 2021) to put in the Lake to Lake bike lane. (City of Penticton)
Parking removed permanently to make way for bike lane in downtown Penticton

Work begins Monday morning to replace parking spots with bike lane on Martin Street

Jaimee Peters photo of a Willow Midwives helping with a birth. Willow closed its doors March 31 because of a shortage of midwives. (Contributed)
South Okanagan’s only midwifery to re-open this summer

Willow Community Midwives was forced to close because of a shortage of midwives

Gord Portman getting ready for the Father’s Day dunk tank fundraiser for Discovery House. So far Portman has raised $3,000. (Facebook)
Penticton man takes the plunge for recovery house that helped save his life

Gord Portman said Discovery House and Pathways have been everything in his 1 year sobriety

(File photo)
Supreme Court Justice rules Bay has to pay Penticton’s Cherry Lane mall

The ruling found that there had been no unavoidable delay preventing the Bay from paying their rent

Summerland cidery Millionaires' Row is hosting a Father's Day car and art show. (Facebook)
Vintage cars, art and cider for Father’s Day

Summerland’s Millionaires’ Row Cider Co. is hosting the car and art show

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

FILE – Most lanes remain closed at the Peace Arch border crossing into the U.S. from Canada, where the shared border has been closed for nonessential travel in an effort to prevent the spread of the coronavirus, Thursday, May 7, 2020, in Blaine, Wash. The restrictions at the border took effect March 21, while allowing trade and other travel deemed essential to continue. (AP Photo/Elaine Thompson)
Feds to issue update on border measures for fully vaccinated Canadians, permanent residents

Border with U.S. to remain closed to most until at least July 21

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed Eli Beauregard facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

Most Read