In response to Rick Knodel’s recent letter (Penticton Western News, Fortis rate design is not a success, Jan. 24), I would like to clarify a few points raised.
First, it should be understood that any changes resulting from our rate design application, now with the B.C. Utilities Commission (BCUC), are revenue neutral for FortisBC. That means we collect the same amount of revenue regardless of a single- or two-tiered rate structure, or how quickly we phase out the two-tiered rate.
But for our customers a change in rate structure can have a financial impact and we need to consider those impacts on all of our customers.
A large proportion of our residential customers have benefitted from the two-tier rate and will experience bill increases as we return to a flat rate.
In fact, if the change occurred immediately, the majority of our customers would face an increase in bills in excess of 10 per cent. In contrast, by phasing out the two-tiered rate over five years, we reduce the annual bill increase to, at most, 3.5 per cent, with many of our customers seeing a smaller increase or even a decrease.
Simply put, phasing out the two-tiered rate over five years reduces the annual bill impacts for the majority of our customers while still reducing bills for heavy users of electricity.
We are recommending changes to our rate structure to ensure that our rates reflect the costs to serve our customers based on the power they consume. And as a regulated utility customers can be assured that any changes to our rates or how they are structured are all vetted through a transparent and rigorous public process with the BCUC. This process includes an opportunity for customers to provide input to the BCUC before it makes a final determination regarding FortisBC’s rate structure and the proposed phase-out approach.
Lastly, we believe that collaboration is key to finding options that are reasonable and fair for our customers. We appreciate the time and feedback from the many customers, including Mr. Knodel, who participated in the consultation leading up to our rate design application. While the rate design changes we recommended are designed to better reflect the cost to serve, all the feedback we received provided valuable insight into what matters to our customers and helped inform our proposals.
For further information about the rate design application, or to contact us to determine how the proposed changes may impact your household, please visit fortisbc.com/electricratedesign or call 1-866-436-7847.
vice president, regulatory affairs, FortisBC