Nelson Hydro customers will see an increase on their power bill starting April 1.
“Customers are going to see a 5.8 per cent increase,” said Nelson Hydro general manager Alex Love at Monday night’s committee of the whole meeting.
For the average residential customer the increase will amount to about $10 per bi-monthly bill.
Love outlined several reasons for the increase over the 2011 rates, which included one-time maintenance costs for rock scaling near the access road of the power plant nearing completion.
Hydro will also be sending a problematic G2 Shaft from the plant to Calgary for a heat treatment.
Love said the shaft has been a problem for Nelson Hydro since it was installed.
Mayor John Dooley asked whether or not the shaft was still under warranty, but Love said it has long since expired.
The plan also includes $3 million for the proposed District Energy System construction.
The hot water heating system could begin generating revenue in its second or third year.
Due to the cost of natural gas, Love said Nelson Hydro is still deciding whether the project is a go or no go.
“How do we convince residents who are using natural gas to make the switch and pay for the costs of new infrastructure?” asked Dooley.
Love echoed Dooley’s concern saying that they hadn’t predicted that the cost of natural gas would stay as low as it has, but said he believed in the end the District Energy System would be cheaper.
If it doesn’t go ahead, $750,000 per year from 2013 to 2016 will go back into the Nelson Hydro budget.
Other capital projects that Love said will be supported by the rate increase are the completion of the downtown conversion project and the construction of the Rosemont substation.
A recommendation will come before council in February, which will amend the rate bylaw.