Last April, policy 1205 was adopted by city council addressing the issue of electrical rate increases.
The policy states that because the city buys electricity from FortisBC at a wholesale rate, staff are directed to bring forward a bylaw that would amend the Electrical Utility Regulatory Bylaw.
As outlined in the amendment bylaw, the rates to be a minimum of 98 per cent of the rates charged by FortisBC for residential homes and that commercial rates are adjusted to maintain competitive rates compared to FortisBC.
“It’s been increased with accordance to council policy,” said Lynne Burch, chief administrative officer for the city. “Council policy says that any time that there’s a rate increase given to the city by Fortis, that we automatically bring a bylaw increasing the rate to 98 per cent of the Fortis rate for residential.”
Alex Love, the city’s electric utility consultant, noted through email that the FortisBC rate would be finalized through a hearing process starting in March.
“This means the final rate will probably not be set ‘till mid-summer,” he added. “I think if there is any change between the interim and final rate it will probably be a small amount.”
In terms of electrical utility rates and connection charges, residential services will be charged a basic minimum of $14.95 per month with an additional $0.09394 per kWh (kilowatt per hour) based on actual consumption.
For commercial, industrial or institutional services, the basic minimum will be $16.50 per month with $0.10255 per kWh for the first 200,000 kWh or less consumed in a two-month billing period.
Should the usage be above 200,000 kWh, it will cost an additional $0.0761.
For service charges on existing service connection and reconnection, there will be a $30 fee. The fee applies to applications including if the owner wishes to establish a new electrical utility account in their name, having the electrical meter read, turning off or on an existing electrical service and a reconnection of a meter after disconnection for violation of the terms and conditions contained in the bylaw.
The four per cent interim rate includes a 1.5 per cent revenue requirement and a 2.5 per cent rebalancing.
“The general rate increase (1.5 per cent) is the rate change that applies to all the FortisBC customers,” stated Love. “In 2009, FortisBC had a rate design hearing to review the rates of all their customer classes (residential, wholesale, commercial …) as a result of this hearing, it was determined that some customers were not paying their fair share of electrical costs (some were paying too much, others too little). Thus there was a rate rebalancing put in place that will take two to three years to implement starting in 2011.”
Rate rebalancing resulted in a 2.5 per cent increase for FortisBC wholesale and residential rates in 2011 and 2012.
“This rate rebalance is on top of any general rate increase,” said Love. “After all the rate rebalancing is completed, the customer classes should all be paying pretty close to their fair share of electrical costs.”
Love pointed out that 2012 would see the final rate rebalance seen in the wholesale rates to the Grand Forks electrical utility.
These current rates are subject to change should the final FortisBC 2012 rate increase, but it is not expected to occur until the summer of 2012. Final reading for the bylaw occurred last Monday.
The residential electrical rates increased by 9.9 per cent in March 2011 and 3.9 per cent in July 2011. These increases include the rate rebalance component. Grand Forks and FortisBC residential rates have both risen approximately the same amount over the last several years.
It is currently forecast that the rate increase in 2013 will be about 6.5 per cent.