A new report released by FortisBC shows that 71 per cent of customers paid about the same or less under the residential conservation rate compared to the flat rate.
However, customers with electric heat and those without access to natural gas were more likely to be negatively impacted by the new rate structure.
These are the findings of the report that looks at the residential conservation rate’s impact on customers. It also examines the rate’s effectiveness towards encouraging energy efficiency, and also includes options for modifying the rate structure.
For example, FortisBC is looking at changing the “threshold” level by varying the amount of consumption that is billed at the Tier 1 rate before the Tier 2 rate comes into effect. But the company says it is not possible to simply raise the threshold without impacting the level of Tier 1 and Tier 2 rates.
The residential conservation rate is a tiered block rate. Residential customers are charged a rate for the first block of electricity they use in a billing period – up to 1,600 kWh – and a higher rate for any electricity they use above that amount.
FortisBC states that if customers use less than 2,500 kWh every two months, they pay about the same as they would if the company billed using a flat rate. If they use more, they will have higher bills than a flat rate.
According to the utility, a higher percentage of customers are negatively impacted as the threshold rises, and there is an increase in the price of the Tier 2 rate as the threshold increases.
“It must be recognized that any change to the existing residential conservation rate would involve a trade-off between conservation impact and customer bill impact,” FortisBC stated.
Tom Loski, FortisBC vice-president of customer service, said they have provided the BC Utilities Commission with background on how this rate is impacting some of the most vulnerable customers.
The commission directed FortisBC to implement the residential conservation rate on July 1, 2012 with the goal of promoting energy conservation. According to FortisBC, the rate was designed to be revenue neutral, meaning the utility does not collect more revenue or profit because of this rate structure.
Highlights from the report include:
Early indications suggest a slight decline in electricity use.
Sixty per cent of customers support some variation of a conservation rate.
Changes to the current rate to reduce bills for customers with electric heat would mean customers with lower consumption would have higher bills.
Boundary-Similkameen MLA Linda Larson was asked for comment, but she wanted to wait and see what the commission does with the report.
“The most vulnerable, as stated in Fortis’s report, still need an affordable option,” Larson pointed out.
Local ratepayer Donald Thorsteinson, who was instrumental in starting a petition against the rate hikes, firmly believes that natural resources belong to the people and should not be exploited by private corporations.
“But I am also a realist and understand that producing and delivering electricity to the masses costs a great deal of money.”
But he asks when will the increases be enough? “How many times a year will Fortis ask for an increase and how many times will these increases be approved?”
Thorsteinson said his strategy is to have the public decry any further increase and let their representatives know that their jobs are on the line if they do not listen to their constituents.
The ratepayer cited FortiBC’s own statistics, saying consumption of electrical power has declined by 21 per cent, but this is not just because of the two-block system and the new rate structure, it is primarily because of the availability of natural gas.
Thorsteinson said distribution is running at only 20 per cent of capacity with current power lines and the two upgraded generating stations nearing completion.
“So what is the rate increase meant to accomplish other than increased profit for Fortis?”
The full report can be accessed at www.fortisbc.ca.
Lyonel Doherty
Oliver Chronicle
