FortisBC has announced that it will be phasing out its two-tiered rates over five years. (Contributed photo)

The BC Utilities Commission (BCUC) has approved FortisBC’s request to return to a single, flat rate for its residential electricity customers over a period of five years.

The request formed part of FortisBC’s Cost of Service Analysis and Rate Design Application, submitted to the BCUC in December 2017.

“We’re satisfied with this result,” said Diane Roy, vice-president of regulatory affairs, FortisBC.

“During the rate design process, we heard from many residential customers with concerns about the two-tiered rate, particularly those with high energy needs and limited conservation options. A gradual return to a flat rate balances the interests of our residential customers.”

The two-tiered rate, also known as the residential conservation rate (RCR), was put in place in 2012 at the direction of the BCUC to encourage energy conservation. Customers pay a higher rate when their use exceeds 1,600 kilowatt hours (kWh) over a two-month period.

Returning to a flat rate provides annual savings for about 30 per cent of customers who had higher bills under the two-tiered system. It could also mean moderate bill increases for lower use customers who saved under the two-tiered system.

The phased approach reduces the bill impacts for these customers, which FortisBC forecasts to be less than 3.5 per cent per year. The actual change to individual accounts will vary, depending on use. Returning to a flat rate is revenue-neutral for FortisBC

“Helping customers reduce their bills remains a priority for FortisBC,” said Roy. “We continue to enhance our energy saving programs, especially those that support customers on the tightest budgets, and we encourage all customers to contact us if they need help.”

As a regulated utility, FortisBC requires approval for rate design changes like this through a rigorous and transparent process with the BCUC. This involves a comprehensive look at the cost of providing service to each rate class and a review of several options for rate design.

• Read more: No rate increase for FortisBC customers in 2019

Through this process, FortisBC solicited input from a variety of stakeholders, hosted eight public consultation sessions and responded to approximately 1,800 information requests from 13 interveners.

“We would like to thank the many people who took part in the engagement process,” said Roy. “We believe this level of participation results in the best outcomes for our customers and we appreciate everyone who contributed to this effort.”

While the BCUC approved a phased-in return to a flat residential rate and changes to FortisBC’s other rate classes, it rejected a new optional time-of-use rate for residential customers. FortisBC is continuing to review the decision and once complete, will establish a timeline for implementing the approved rate design changes.

Customers can find out more and estimate how the return to a flat rate will affect their annual electricity costs by visiting fortisbc.com/flatrate or calling 1-866-436-7847.