Today’s Poll

Nelson Hydro Rates To Increase

Bill Metcalfe
By Bill Metcalfe
January 27th, 2012

Hydro rates may go up by 5.8% in the coming year if council approves the draft plan presented to it on January 23 by Nelson Hydro General Manager Alex Love. That would amount to an average increase of $10 per bi-monthly bill or about $60 per year for residential customers, starting in April. 

The City of Nelson is unique among municipalities in that it owns and operates its own power generating station. The city produces about 50% of its power and purchases the other half from Fortis B.C. 

Trouble calls, storm repairs, maintenance

Explaining the need for the increase, Love reported that the main additional operating expenditures in 2012, amounting to about $400,000, will cover:

  • Increased estimates of the cost of trouble calls and storm repairs
  • More line maintenance and patrols to reduce trouble calls and repairs
  • A number of one-time maintenance costs including rock scaling, equipment replacement and repair, and testing transformers for PCBs

Capital Costs

And Love outlined a number of capital expenditures, totalling about $5.5 million:

  • Completion of the Downtown Conversion  
  • Rosemont Substation Construction
  • G4 Rewind (a major equipment upgrade)
  • Other capital projects

Fortis rate increase and District Energy System

Love reported that a rate increase in the power Nelson purchases from Fortis will also contribute to the increase to Nelson customers, as will a contribution by Nelson Hydro to the District Energy System (a proposed energy system using Kootenay Lake as a heat source).

Where your money goes

Expenditures for Nelson Hydro amount to about 28% of the city’s budget, but beyond their power bills, residents are not taxed to support Nelson’s hydro system. “A good portion of what you pay on those bills goes into capital infrastructure to upgrade those utilities as we go along,” says Nelson’s City Manager Kevin Cormack, “and hopefully to build a reserve to continue those upgrades.”

A crucial contribution

As the owner of Nelson Hydro, the City of Nelson receives a shareholder dividend from Nelson Hydro amounting to about $2.75 million annually—a crucial contribution to the city’s revenues. “(Former mayor) Gerald Rotering used to say, ‘Without Nelson Hydro, Nelson would still have dirt streets,’” says Councillor Donna Macdonald. 

Council will vote on a by-law to enact the hydro rate increase at its February 6 meeting.

Categories: Politics

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