As the architect of the Oct. 4, Regional District of Okanagan-Similkameen motion to intervene in the Fortis rate design application, which passed unanimously, I have been asked how I feel about the decision by the RDOS to not join in the intervener motion but to support the Anarchist Mountain Residents Society (AMRS) in their intervention.
Related: Fortis plans to phase out two-tier system
In a small part, I can justify this as a win as the original goal was to see the end of the two-tier system but in another way, I have to see this as a loss as the two-tier system will still unjustly punish heat source reliant customers for another five years. Joining with the AMRS would have added more weight to the stance that the two-tier system be removed immediately and if Fortis then so desires faze in the time of use option. That fight is now left to the AMRS with (support?) from the RDOS.
As director Mark Pendergraft has stated this is a fight that is far from over as the cost of electrical power is still going to create enormous social issues. With that in mind here are some tidbits to ponder.
By guaranteeing a fixed return to the IPPs and forcing Public Utilities to purchase unneeded power at inflated prices a huge weight was transferred to residents. If I remember right Fortis is 9.1 per cent guaranteed return better than any pension plan I know of but there is also the issue of how the capital investment is calculated which could artificially inflate this number I am not an expert in accounting but some auditing may be required here.
The 11.74 cents/ kWh that will be the flat rate is currently the farm flat rate and even though less than the second tier rate or 15.115 cents/ kWh is still extreme for those without alternate heat sources. As most farms are not inside an area serviced by natural gas the alternate sources not only for farms but all rural residents tend to be wood.
One other point on the flat rate of 11.74 cents / kWh. That is in today’s value, at this time Fortis is headed to the BCUC to apply for its latest round of rate increases that will no doubt be rubberstamped as uncontested. That means that at the recent speed of Fortis rate increases the flat rate in five years will likely be the same as or more than the second tier rate is now.
You might think the current first tier rate of 10.117 cents /kWh would be what the flat rate should be but that is not true it is actually subsidized down by a little over one cent by the second tier users. That was a revelation exposed by Cory Sinclair (Fortis spokesperson and manager of regulatory affairs) at one of the Osoyoos meetings. That means that to maintain their current rate of return (we do not know if this is above their minimum) the flat rate must be 11.74 cents /kWh. This effectively makes a mockery of Fortis claiming this to be a conservation rate as it actually encourages the frivolous use of electrical energy by Fortis’s natural gas customers enjoying a very low rate per Jewell of heating energy and a subsidized low rate for electrical energy. (I think a hot tub would be nice.)
Even trying to say that this has been successful is insulting and criminal; unless you consider fixed income, lower income, seniors or any other group living wrapped in blankets, huddling in the dark, because they can’t afford the 50 per cent increase to the second tier on their power a success.
Rick Knodel
Oliver