City reports Hydro budget, revenue ‘trend’ upward as new rate increases take effect Jan. 1
The city’s electrical utility leads the charge when it comes to success in the municipality’s financial third quarter.
Nelson Hydro is not only on budget, noted the city’s chief financial officer Chris Jury in his budget report to council last month, but it is ahead of prior year revenue.
He said that energy consumption that was trending slightly above budget in the early months of 2022, normalized towards the mid-point of the year, and it could trend upward once the final figures come in for the end of 2022.
“But the expectation is for revenue to come in slightly ahead of budget by year end,” Jury stated.
That prosperity will certainly be buoyed by a 9.87 per cent rate increase that took effect Jan. 1 for rural Nelson Hydro customers, coupled with a 3.99 per cent increase for urban customers.
In December approval was given by city council to implement the rate increases for all ratepayers, figures the city-owned utility had outlined in its 2023 budget.
That rate application was submitted in late October, 2022 to the B.C. Utilities Commission (BCUC) requesting approval for a 9.87 per cent increase. That application was supported by a commission-approved Cost of Service Analysis (COSA) study — a two-year long proceeding subjected to a number of modifications as directed by the commission.
Nelson Hydro expenses were also in line with its budget and the prior year, said Jury.
“Power purchases are up from last year, in line with a corresponding increase in sales and an increase in rates from FortisBC,” he said in his report.
Jury added that two large and costly windstorm events in the first half of 2021 meant that storm repair costs were significantly lower in 2022 — a year that did not have the same events occur.
Hydro capital projects
• Mill Street Substation upgrade project is progressing.
Drilling has been postponed to the spring due to the FortisBC Coffee Creek transformer failure in late October.
“The project is on track for overall budget, however, 2022 projected spend is over budget due to the additional effort required to prepare specifications and initiate activities early due to supply chain material delivery concerns,” said Jury.
• Hydro was successful in its grant applications to fund $60,000 of asset management planning work for Nelson Hydro earlier this year.
“The software evaluation is still in progress with selection expected by year end for 2023 implementation,” said Jury.
The project will be underspent for the 2022 budget.
• G5 overhaul was behind schedule due to parts machining constraints.
All parts have now returned and re-assembly is in progress. Crew is working towards start-up before year end or early in the new year. This project will be underbudget.
Source: City of Nelson agenda