Today’s Poll

Rise in electricity rates coming as Nelson Hydro looks to absorb provincial rate hike

Timothy Schafer
By Timothy Schafer
January 21st, 2021

The rising cost of electricity will be borne on the backs of Nelson Hydro customers.

A 2.3 per cent increase to electricity rates is being proposed for rural and urban customers — pending a B.C. Utilities Commission (BCUC) approval — with the compounded rate taking effect in April at 3.32 per cent.

The move — which passed third reading Friday in a special council meeting — covers the municipal utility’s operating budget inflation and a 4.36 per cent general rate increase sought Nelson Hydro’s power supplier, FortisBC.

The annual general rate increase will be for the urban service area in Nelson and an identical rate increase for the rural service area. The proposed 2.3 per cent rate increase could become effective on April 1.

“This implementation date is favorable as it allows the BCUC to consider the rate increase for the rural service area, and it also benefits ratepayers as the rate increase begins following the colder months of the year where many customers are utilizing more electricity,” read the city staff report to council.

However, this later implementation date results in a “compounding” of the annual rate increase into a nine-month period which equates to a 3.32 per cent rate increase from April through to the year end.

Making the move

With regard to Nelson Hydro’s Rural service area, the BCUC must first approve of the requested rate change before it can be implemented and formalized by adopting the bylaw amendment.

Based on earlier council direction in November staff filed the 2021 general rate Increase application with the BCUC requesting approval for the proposed 2.3 per cent increase.

“The BCUC has confirmed receipt of the application and city staff are hopeful that a decision will be made in advance of the proposed April 1, 2021 implementation date,” the report to council explained.

With the first three readings complete the bylaw adoption process is now on hold until the required approval is received from the provincial governing body, at which time the bylaw amendment will be presented to council for adoption.

Keeping the costs

The rationale behind the rate increase “will allow Nelson Hydro to recover its operating costs and earn a fair return on its assets from the urban ratepayers,” noted the staff report, fulfilling the projected revenue requirement for 2021, which includes a contribution to the utility’s capital reserves from urban rates.

“Rural rates at this time are not adequate to fund their share of the revenue requirement for the utility and this matter is being addressed through the … application,” the city staff report to council read.

“It should also be noted that urban commercial ratepayers are over contributing to capital reserves and urban residential ratepayers are under contributing. Staff anticipates bring this matter (urban rate rebalancing) to council in the near term.”

Getting the word out

Stakeholder engagement opportunities have been somewhat challenging in 2020 as a result of the COVID-19 pandemic and the need to limit in-person gatherings, council was told in the meeting.

As a result, no in-person public meetings were held, with a December 10 annual open house for Nelson Hydro held through a virtual platform. In the online gathering Nelson Hydro staff presented with regard to a number of topics, including the annual general rate increase and the reasons for the proposed increase.

Those in attendance for the online meeting were given the opportunity to ask questions of staff on this topic.

Once the rate increase has been adopted by council and approved by the BCUC (whether as a final approval or an interim), and prior to April 1, there will be announcements on the city’s Facebook page and city website of the general rate increase.

—    Source: City of Nelson

Categories: General


Other News Stories