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Letter: FortisBC residential customers paying more

Letters to the editor
By Letters to the editor
March 11th, 2019

To The Editor:

In response to a recent editorial by Minister Mungall, I direct readers to the report referred to by the Minister, which states, in a section entitled “Waneta Expansion EPA”: 

“Ultimately, this review was not able to determine why or to whom the Waneta Expansion project was important or why BC Hydro was directed to accept the EPA. On Jan. 28, 2019, Fortis announced that it will be selling its 51% interest in the Waneta Expansion project to CPC and CBT for $991 million. Fortis reported that the original cost of the project was $900- million and that COD was achieved in 2015. 

“The sale demonstrates the profitability embedded in the BC Hydro EPA. Fortis enjoyed 51% of the energy payments for five years and then sold its $459 million (51% of $900 million) original investment for $991 million generating a gain of $532 million in five years. It is certainly unfortunate for the BC Hydro ratepayers that this EPA was not subject to BCUC review” (Davidson, Ken, Zapped: A Review of BC Hydro’s Purchase of Power from Independent Power Producers conducted for the Minister of Energy, Mines and Petroleum Resources, February 2019). 

FortisBC’s residential customer “Basic” bi-monthly charge is $32.09, compared to $15.63 charged by Nelson Hydro and $11.74 by BC Hydro. Similarly FortisBC charges 14.4% more than BC Hydro for Tier 1 electricity, 17.8% more for Tier 2, and 24.4% more than Nelson Hydro for 1,500 kWh. 

Given that all three utilities produce and exchange electricity with each other on the same section of the Kootenay River between Nelson and Castlegar, and that Fortis Inc has management contracts with both Columbia Power and Columbia Basin Trust, I must ask both the Minister and the British Columbia Utilities Commission (BCUC) to explain why FortisBC residential customers are paying substantially more for their electricity. 

Why, Minister, did your government and BCUC approve sale of Fortis Inc’s shares in the Waneta Expansion Project without first ensuring that FortisBC residential customers obtained a better rate for their electricity, which, when I first returned to the Kootenays in 1987, was cheaper than BC Hydro? 

Why does BCUC continue to allow FortisBC to use a “Cost of Service” analysis that was banned by the Washington Utilities and Transportation Commission in 1990 because it causes higher residential rates, especially for low use and low income electricity customers, contrary to BC’s Utility Commission Act. 

Andy Shadrack, Kaslo, BC

Categories: LettersOp/Ed

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