Power rates to rise

Summerland passes on Fortis electric utility rate increase.

by John Arendt

Summerlanders will pay more for electrical power in 2013 as the municipality passes on a rate increase from FortisBC.

On Tuesday evening, council voted to increase the rates by 4.2 per cent, the same amount as the FortisBC increase.

Initially, the application from FortisBC, filed on June 30, called for an increase of 6.5 per cent, but after a review by the B.C. Utilities Commission and some adjustments, the increase was reduced.

Municipal treasurer Ken Ostraat said power purchase costs are the single biggest cost of the municipality’s electrical utility.

The increase by FortisBC will increase the municipality’s costs by roughly $280,000.

There are also additional costs for the municipality with two per cent increase in labour rates and increased materials costs.

The reintroduction of the Provincial Sales Tax and the elimination of the Harmonized Sales Tax will increase the total costs of materials by seven per cent, since municipalities can no longer receive a rebate of the full amount of sales tax paid.

For an electrical customer using 1,100 kilowatts a month, the cost of electricity will increase from $106.47 in 2012 to $110.94 beginning in January.

The increase will bring in around $350,000 in additional revenues, which will offset the increased power purchase costs and additional labour and materials costs, Ostraat said.

Despite the increase, Ostraat said Summerland electrical customers are receiving a better deal than they would get if they dealt directly with Fortis for their electrical needs.

“If we look at the typical residential customer in Summerland and compare the rates from FortisBC, our customer would pay $110.94 for one month’s consumption in 2013 whereas they would pay $120.06 if they were a Fortis customer,” he said.