While newspapers across the South Okanagan have been filled with articles and letters to the editor from angry FortisBC customers claiming their monthly electricity bills have skyrocketed, the reality is more than 75 per cent of its customers have seen their monthly bills reduced since the controversial “residential conservation rate” was introduced last July, says top brass from the utility company.

“The reality is 75 per cent of our customers are benefitting from the new rate system,” said Corey Sinclair, FortisBC’s manager of regulatory affairs. “The truth is you don’t hear much from people whose rates have gone down as a result of our new rate system and that happens to be the majority of our customers, which was the intended goal.”

Sinclair was joined by Mark Warren, FortisBC’s director of customer service, and Neal Pobran, manager of corporate communications, when they engaged in a tour across the South Okanagan to try and meet with media outlets to explain the recent uproar by several customers who had gone public with their complaints about Fortis rates.

The goal of the tour was “to set the record straight” and explain how FortisBC was mandated by the British Columbia Utilities Commission (BCUC) to introduce the residential conservation rate, said Warren.

While the company won’t deny that some of its customers have seen an increase in rates – and in some cases significant increases – it’s only fair to let the public know that the vast majority of customers have seen a decrease in rates over the past 10 months, said Sinclair.

It’s “a myth” that the residential conservation rate has dramatically increased the earnings of FortisBC as rates are set with the BCUC to make sure the amount of revenue collected covers the cost of running the utility, said Sinclair.

The new rate, which came into effect last July, was designed to collect the same amount of revenue from residential customers as was collected using a flat rate, he said.

There’s also a common perception that customers who use more than 1,600 kWh every two months have seen higher bills than in the past, but the truth is customers will only see an increase under the new rate if they use more than 2,500 kWh every two months, said Sinclair.

It’s true that the rate does increase after 1,60 kWh, however, since customers receive a lower rate on the first 1,600 kWh, the “breakeven” point remains at 2,500, he said.

After compiling months of statistics, the evidence reveals most customers are thrilled with the new rate, he said.

“Just over 75 per cent of our customers now pay less under the residential conservation rate and we would like to get that message out there,” said Sinclair. “Unfortunately, you’re not going to hear too much from people who are pleased, but you are going to hear from the people who are not too happy because they have seen an increase

“We’re not going to sit here and deny that some of our customers have seen an increase in their rates under this new system, but the majority of our customers have benefitted with lower rates and that was the original intent and the intent of the BCUC when it approved our application.”

Because FortisBC is a public utility company, it does not have the authority to sets its own rates, said Warren.

That is done only through the authority of the BCUC, which mandated that Fortis and BC Hydro switch to a new system that encouraged customers to conserve energy and be rewarded with lower bills by doing so, said Sinclair.

FortisBC management submits a detailed business plan annually outlining all of their costs and the BCUC approves the business plan before the provincial government hands out the cheque so the company can operate its business, he said.

The business plan is a “detailed line by line” audited account of all costs in running the business, from payroll and benefits, to vehicle and equipment costs.

“It is all publicly disclosed and anyone can come into the process and make comments or complaints … our books are completely open,” said Sinclair.

Like any other business, FortisBC is in business to make a profit and its corporate goal remains “a 9.5 per cent return on equity,” he said.

The BCUC reviews the FortisBC application and does not approve the requested rate increase every year as many people seem to think, said Warren.

The company makes it business case and does apply for annual increases, but they BCUC does not automatically approve our submission and most often make changes and often approve increases far lower than what was requested, he said.

Back in 2009, the Liberal government mandated the BCUC to look at introducing a new energy conservation rate in order to try and encourage residential customers to conserve as much energy as possible, said Sinclair.

When FortisBC eventually filed an application in March of 2011 relating to a two-tiered billing system, the goal was that 95 per cent of its customers would see a rate increase of less than 10 per cent, said Warren.

“We tried to impact as few people as possible,” he said.

Numerous public hearings were held before the BCUC approved the new rate structure, which featured the “95-10 criterion,” he said.

FortisBC did receive permission for a 6.5 per cent last year which affects all residential customers.

The only way a residential customer’s bill can dramatically increase is by a similar increase in consumption, said Warren.

“If someone says their bills has gone up by 40 per cent, the only logical explanation is through a large increase in consumption,” he said. “If you use above average consumption, you are going to pay more than with the old rate … we can’t deny that. But we stress once again that 75 per cent of our customers are benefitting.”

FortisBC will be introducing a Power Sense energy conservation program for its customers in the coming months, where staff will “blitz the town” and provide free consultation to clients on how to save and conserve energy.

“It has been very successful in pilot projects in communities like Rossland and we’re really looking forward to expanding the program to the South Okanagan,” said Sinclair.

Anyone wanting more information about the company and its application process can go online and visit www.fortisbc.com.

 

Keith Lacey

Special to the Chronicle