Nick Marty has been leading the fight to abolish two-tier electricity rates. (Richard McGuire file photo)

Anarchist Mountain residents are submitting final written arguments in a process that will determine when FortisBC ends its two-tier rates for electricity.

The Anarchist Mountain Community Society (AMCS) and the Regional District of Okanagan-Similkameen (RDOS) have been arguing that the two-tier system should be ended and replaced with a flat rate at the start of 2019.

In January 2018, FortisBC proposed to return to a flat rate, but asked the BC Utilities Commission (BCUC) for five years to phase in the change. They also proposed an option for customers to switch to time-of-use billing.

That rationale FortisBC uses for the five-year phase-in is that it wants to ease the rate shock on the approximately 70 per cent of customers who have been paying less under the two-tier system because all or most of their electricity consumption is billed in the lower tier.

But the Anarchist Mountain residents, led by retired federal energy regulator Nick Marty, argue that the two-tier system is in fact a cross-subsidy, where those who consume more electricity – typically because they don’t have access to natural gas – subsidize those who heat their homes with gas.

“Essentially what Fortis is arguing is that we should have four more years of high-use customers cross-subsidizing low-use customers and essentially the minority subsidizing the majority,” said Marty.

He’s not sure why FortisBC wants to prolong the two-tier system that he believes is both unfair and ineffective at conserving energy, though he thinks the electricity monopoly doesn’t want to admit the two-tier system was a mistake.

The delay, he said, would result in a further $14 million or more in cross-subsidies, on top of the $30-$40 million extra that high-use customers have been paying since the two-tier rate was introduced in 2012.

The two-tier system was initially claimed to promote energy conservation by encouraging customers to use less electricity so they could avoid the higher-tier rates.

But Marty used basic economics to show that the reduced rates for those who didn’t need to heat with electricity were actually a disincentive to conservation.

At the same time, the higher second-tier rates paid by Anarchist Mountain and other rural residents, who don’t have access to natural gas, encouraged people to switch to heat sources such as burning wood, which pollute and contribute to greenhouse gas emissions.

The AMCS and RDOS requested that the BCUC hold an oral hearing on the matter, but the energy regulator rejected this request in October, forcing the parties to submit only written evidence and arguments.

Marty said an oral hearing would have allowed legal counsel for his side to cross-examine representatives of FortisBC.

“It’s too bad,” he said. “It’s not that I really wanted to testify per se. I wanted to cross-examine Fortis because a lot of what Fortis has been saying has in our view been misleading.”

The deadline for the AMCS and RDOS written submissions was Wednesday, Nov. 7. FortisBC has until Nov. 22 to submit a written reply argument.

That will conclude the process of hearing from the applicant, FortisBC, and interveners such as the AMCS and RDOS. It will then be up to the BCUC to consider the evidence and arguments and to make a ruling.

RICHARD McGUIRE

Osoyoos Times