City Hall File,

After 6 years without change, Penticton looking at hiking electricity costs

Increases in previous budgets have been voted down

After years of council deferring and suspending increases to electricity costs, the City of Penticton is once again proposing a hike.

Attempts to raise the rate that residents and businesses pay have been included in budgets in recent years, but city councillors have voted them down, including in 2022’s budget.

Now, the city says it’s impossible to keep the rates where they are, particularly with rising costs for electricity.

“Fortis BC bulk rates, which make up almost 90 per cent of the Electrical Utility budget, have increased by almost nine per cent over the past five years,” says Kristen Dixon, the City’s general manager of infrastructure.

“The City has recognized the financial pressures that many residents and businesses are facing, and over the same time frame, reduced rates by three per cent to try to offset this pressure. However, Fortis is proposing a further four per cent increase for 2023, and we have reached a point where we must increase our rates by modest amounts in order to provide a sustainable and reliable service for years to come.”

According to the city, Penticton has gone six years without an increase to electrical utility rates. What is currently proposed is an increase of five per cent in 2023’s budget.

A two per cent increase to the electrical utility was proposed in the draft budget for 2022, but that was voted down by council in favour of a reduced surplus.

READ MORE: Penticton council to pull from reserves and reduce this year’s tax hike to 5.7%

The staff report also notes that inflationary pressures and supply chain issues are impacting both the City’s costs of capital works as well as those of Fortis BC, which are then passed to the City as part of the cost of energy.

The electrical utility won’t be the only rate that is looking at a potential increase.

In terms of the sewer utility, after several years of increases to improve the sustainability of the utility and address future capital projects, 2023’s increase is proposed at 4 per cent, while the water rates are proposed to mirror the 2022 rates, with an increase of 0.6 per cent.

The storm water utility rate, which goes to maintaining and improving capital works along key roads to prevent pooling and flooding, is also looking at a proposed 20 per cent increase to residential properties. The rate is by numbers the smallest and on average would result in an increase of $0.88 a month, going from $4.34 to $5.22 under the proposed change.

According to the city, the combined total increase in costs for the average household would combine for a total increase of $8.72 a month.

On top of the currently proposed change, which will be included in the coming budget, the city will be conducting its regular independent rate review in 2023.

The review aims to ensure fairness and equity amongst ratepayers and to help forecast future rates over the coming years. The last rate review was conducted in 2019 and made recommendations for rates from 2020 to 2022.

In addition to a general review of revenues and expenditures, the review will also do a more detailed analysis of the electrical dividend and how it is determined, how expenses are split between the basic and variable elements of the rates and the potential implementation of a variable rate structure for treated water to support conservation goals. Information about how to participate in the review will be shared early next year.

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