OSOYOOS TIMES-August 5, 2009

By Paul Everest – Osoyoos Times

FortisBC is looking into possible changes to the way it charges people for electricity and the utility is asking for public feedback.
At an open house at the Sonora Community Centre on July 30, representatives of the utility explained why changes are being considered and how new electricity rates could be applied.
Part of the “rate rebalancing and rate design” review the utility is undertaking includes a “Cost of Service Analysis” which is being carried out in three steps.
The first step is to look into FortisBC’s revenue requirements— a review which happens annually— to see the total amount of money required to serve customers on a yearly basis.
The second step is to take that amount and break it down by customer class such as residential, industrial, commercial, irrigation or wholesale to determine what portion of the utility’s yearly costs apply to each customer class.
The utility will then figure out if each class is paying its fair share.
The third step is considering a new electricity rate design which will affect how individuals within each class will pay for electricity and will allow the utility to evaluate various rate structures and determine if changes are needed to electricity charges.
Representatives of the utility said the rate design is meant to ensure charges to customers are equal and fair.
As part of the cost of service analysis, the utility found that some revenue classes were paying less than what it costs FortisBC to provide them power while some classes were paying more.
For example, according to the analysis’s preliminary results for 2009, the “industrial transmission” class paid only 61.9 per cent of the utility’s costs to provide service while the “industrial primary” class paid 123.6 per cent.
The residential class paid 98.5 per cent.
The utility is considering rebalancing the rates to bring each class as close to the 100 per cent of costs mark as possible over a five-year period.
For classes that are “under-collected,” the utility is looking at increasing rates for rebalancing, but with a cap of five per cent per year.
Some of the rate restructuring options the utility is looking at include reducing the basic bi-monthly customer charge but increasing the flat rate for what is paid for each kilowatt per hour.
Right now the fixed bi-monthly customer charge for residential customers is about $24 while the rate per kilowatt hour is 7.5 cents.
Going this route may give people incentive to cut back on the amount of energy they consume.
This option would also include a “minimum bill”.
The minimum bill aspect would be included to cover customers who may only live in their residence for part of a year and are not paying their fair share for being hooked up to FortisBC’s system.
Another option is reducing the bi-monthly charge and introducing an “inclining block rate” where customers get a certain amount of electricity in a two-month period for a set rate.
Once that amount of electricity is exceeded, the rate would increase.
Or, the bi-monthly charge could be increased and customers would pay lower electricity charges.
All of these options are only proposals and the utility could choose to maintain existing rate structures.
The roughly 15 people in attendance at the Osoyoos open house on July 30 also heard a 2.3- per-cent increase in electricity rates is likely coming in September, with a four-to-six per cent increase likely coming in January.
The utility is also looking at new ways to charge customers and measure energy consumption and demand and encourage conservation and energy efficiency.
These include net metering, where people can set up environmentally friendly electricity-generating systems on their property to offset some of the electricity provided by FortisBC, smart metering, where people will be able to know instantly how much energy they are using, different rates for rural and urban customers and “time of use billing,” where customers pay higher rates during peak times.
If you would like to provide feedback on the utility’s review of its cost of service and rate design, visit http://fortisbc.com/about_fortisbc/rates/other_applications.html to find an online feedback form.
You can also email feedback to [email protected], fax to 250-364-1270 or mail to Corey Sinclair at 1290 Esplanade, PO Box 130, Trail, B.C., V1R 4L4.
Public input will be accepted until Aug. 28 as the final 2009 cost of service analysis and rate design application must be filed with the British Columbia Utilities Commission by September.
[email protected]