Nelson Hydro plans to increase customer rates by 2.3 per cent for 2021, according to its general manager Scott Spencer.
“For the most part it is just an inflationary increase,” he said.
But it’s also because of an increase by Fortis BC, from which Nelson Hydro buys 50 per cent of its power.
“Fortis BC has a tentative or interim approval from the B.C. Utilities Commission (BCUC) for a 4.36 per cent rate increase,” Spencer said. “This has a significant impact on our operating expenses.”
In 2020, Nelson Hydro did not apply a rate increase because of the pandemic.
The 2.3 per cent increase for 2021 applies to both Nelson Hydro’s urban and rural customers, Spencer said, although Nelson Hydro is applying to the BCUC for permission to apply for a higher rate for its rural customers.
Nelson Hydro’s rural customers include residents in Taghum, Blewett and the North Shore to Coffee Creek. Electrical utilities in the province must submit their proposed rate increases to the BCUC for approval, but the BCUC has no jurisdiction over municipally owned utilities operating within a city.
The increased rate for those rural areas, if it is approved by the BCUC, would be 18 per cent phased in over three years.
This comes after the BCUC refused to accept Nelson Hydro’s application in 2019 to raise rates in the rural areas higher than the rates in the city, saying the utility did not provide adequate justification for the increase.
This time, the documentation and rationale will be more detailed, Spencer said.
Why does Nelson Hydro want a greater increase for rural customers?
Spencer said it’s because customers are more spread out and therefore more expensive to service. It is also a question of where, and by whom, the power is produced.
“That plant [the Nelson Hydro generating station] is funded by the taxpayers of the City of Nelson. And so we preferentially supply Nelson with power from our plant, and the rural ratepayers receive the the Fortis-generated power. Because the Fortis rates are higher, these rates get transferred to the rural ratepayer.”