By Timothy Schafer, The Nelson Daily
Although BC Hydro’s rate increase for 2011 may be frozen and under review by the Province, Nelson Hydro’s energy rate increase takes effect Friday.
Inflation, wage and material costs going up combine with increased wholesale power purchase costs to account for much of the needed 9.6 per cent increase Nelson Hydro will be billing its customers this year starting Friday, April 1.
BC in general, and that includes Nelson Hydro, is looking at some pretty sizable rate increases over the next few years, said the manager of the City-owned utility, Alex Love.
“But BC still enjoys some of the best power rates in North America. We are going to a very low number to a reasonably low number,” he said.
Homeowners will be paying about $7 extra a month for their electricity as BC Hydro forecasts a 10 per cent rate increase per year over the next three years, an increase that is being passed on to Nelson Hydro customers.
Many things have driven increased revenue requirements for Nelson Hydro, with the biggest being the huge increase in their wholesale power purchase costs, that is, the power they buy from FortisBC. Roughly half of the energy Nelson Hydro uses in one year comes from FortisBC.
Approximately 45 per cent of Nelson Hydro’s annual energy requirements are obtained via power purchase.
The supplier has historically been West Kootenay Power, now FortisBC under the current traditional regulatory environment. Power purchase represents approximately 30 per cent of the utility’s annual operating costs.
As well, the utility’s capital program — the downtown conversion ($2 million), a rebuild of the Rosemont substation ($3 million) — was in need of revenue.
Buy and selling
But if the City has a power generating station, and it once looked at being able to sell excess power, why does it need to buy power at all?
Love said it’s about timing. The City-owned Bonnington power plant produces the most power in the spring when the freshet runoff happens, but that’s when people use the least power.
Conversely, plant is producing minimum power in winter and that’s when customers use the most, said Love.
The sale of excess power
Power sales are still not on the books, Love said. BC Hydro is still opposed to the surplus sales Nelson Hydro made three years ago.
“We’re still working on it but we’re not making any sales right now,” said Love.
Right now the market for power sales is not that good, he said, with the economic downturn still affecting industry.
The increase will result in a revenue increase of 6.62 per cent to the utility in 2011. The rate change will come into effect on the April Nelson Hydro billing statements.
Baker lanes underground upgrade
This project involves converting the downtown core of Nelson from four kV primary overhead lines to 25 kV primary underground lines.
The four kV voltage is being phased out of the Nelson Hydro system to allow the city substation to be eventually retired from service. In the new system, the downtown core will be serviced from the 25 kV feeder, which runs along the CPR right-of-way north of Vernon Street.
In the new system, all primary lines will be underground, supplying 25 kV to pad mounted transformers throughout the downtown core.
These pad mount transformers will supply secondary distribution voltages to new pole lines along the north side of Hume and Herridge lanes.
The new poles will allow the removal of the existing two pole structures in need of replacement.
Supply will be stronger than it was but most people won’t notice a difference, said Love, other than the system is more reliable.
“The distribution downtown will have less exposure to incidents causing outages,” he said.
There will be less congestion in the alleys because there will be less poles in alleys.
The underground conduit system, new poles and padmount transformer bases installations are completed. The cable installation and voltage conversion will be completed in 2011.
“We’ll keep a couple of (pole) structures in one of the alleys as sort of a museum piece and let people see what they had looked like,” Love said.
Those will actually new poles, rebuilt in exactly the same style.
The service area
The Nelson Hydro service area covers from the Nelson Hydro Power Plant on Kootenay River to the west, Blewett, Taghum, Sproule and Grohman Creek, Nelson, Highway 6 south towards Salmo to Perrier Road and beyond, north and east along Kootenay Lake to Harrop, Procter, Balfour, Queens Bay and terminating at Coffee Creek north of Queens Bay along Kootenay Lake.
Nelson Hydro connects to the FortisBC system at Coffee Creek, the Nelson Hydro Power Plant at Bonnington and at the Rosemont Substation in the Rosemont area in Nelson.
Bonnington power plant
Nelson Hydro owns and operates a 16 MW hydroelectric generation facility located at Bonnington Falls on the Kootenay River 16 kilometres southwest of Nelson.
The current water license allows a year-round output of 9.1 MW, which represents about 55 per cent of the utility’s annual energy requirements.
Operating costs for generation includes maintenance of the four generating units and of the buildings and property, water license fees and insurance.
Project Directional Map [PDF - 1.3 MB]
October 13 2010 Update [PDF - 27 KB]
September 13 2010 Update [PDF - 195 KB]
Baker Lanes Underground Upgrade [PDF - 683 KB]
Powerpoint Presentation July 26 2010 [PPT - 6 MB]
Layout Plans [PDF - 6.7 MB]