Former RD director takes Nelson Hydro to task over rate rise
The application for the latest Nelson Hydro rate increase should not be approved by the BC Utilities Commission, says a long-time retired regional district director.
Al Dawson said he was definitely against the rate increase, citing boundary expansion approximately 17 years ago — that took in the (FortisBC) dams — as enough of a taxation windfall for the city that it doesn’t need to pull more out of the pockets of rural, commercial and Nelson residential taxpayers today.
The city receives $350,000 a year from taxes that were originally were going to Victoria, Dawson stated, along with $175,000 coming through a grant-in-aid from BC Hydro.
“And that was back then (2003) they were receiving that amount of money,” Dawson told The Nelson Daily. “So why do they need taxation from rural areas and business community and residential area through a rate increase now for Nelson Hydro?”
When the expansion occurred 17 years ago, there was no consultation with the three Regional District of Central Kootenay areas affected by the move, and that is happening again with the BCUC rate rise application, said Dawson.
He pointed to the cumulative effect of that taxation resulting from boundary expansion as enough of a carrot that there was no reason the city-owned utility should be applying again for a rate rise.
Nelson Hydro filed its 2021 general rate increase application requesting BCUC approval of a general annual rate increase of 2.3 per cent for the rural service area for the calendar year (a 3.32 per cent increase effective April 1, 2021).
Although Nelson Hydro is applying for the same increase for 2021 for both rural and urban customers, they are also seeking permission to apply for a higher future rate for its rural customers.
If allowed, the increase would be 18 per cent — phased in over three years — for the rural customers in Taghum, Blewett and the North Shore.
This is the second time Nelson Hydro is attempting to create a two-tier system. In 2019 the BCUC refused Hydro’s application to raise rates in the rural areas higher than the rates in the city.
City council, which has rate-setting authority for the urban service area, had directed Nelson Hydro to apply the same rate increase to the urban service area for 2021.
“The rate increase requested is largely attributable to the 4.36 per cent general rate increase sought by Nelson Hydro’s power supplier, FortisBC, which seeks an effective date of Jan. 1, 2021,” noted Nelson Hydro’s Nov. 30 application to the BCUC.
“The remainder of the requested increase (less than one-third) relates to modest inflationary increases in the utility’s operating budget.”
But another former regional district director, Josh Smienk, noted in a letter to the BCUC — in the letters of comment section on the BCUC website — that the application to increase the rates would create a two-tier pricing system.
“There is no justification for a two-tier system that Nelson Hydro has presented that even warranted a hearing; it should of (been) dismissed outright,” he wrote. “This will set a historic precedent to the rest of B.C. for two-tier pricing for a whole host of public services.”
In all, 66 letters have been received by March 9.
Application goes public
As a department of the City of Nelson, Nelson Hydro is part of the annual municipal budget cycle.
In any given year the cycle includes budget meetings and workshops with city council, open to the public with a public forum where staff are able to present on the utility and its successes and challenges, its annual budget and any anticipated rate increases.
“For the 2020 year, stakeholder engagement opportunities have been challenging as a result of the COVID-19 pandemic and the need to limit in-person gatherings,” noted the Nelson Hydro application to the BCUC.
“Still, Nelson Hydro staff presented to council with regard to this application and the 2021 budget on Nov. 12, 2020.”
Two weeks later Nelson Hydro staff again presented to council on these topics and also included “a broader overview of the utility’s operations over the course of the year.”
The application noted both meetings were open to the public, with notice provided through the online posting and publication of the city council agendas.
In addition, there normally was a Nelson Hydro-hosted in-person annual open house specifically for members of the public in November of each year.
Source: Nelson Hydro BCUC application