COLUMN: Nelson Hydro, we have a problem

From environmental consultant Michael Jessen....

COLUMN: Nelson Hydro, we have a problem

“Rate increases of five percent or more are of great concern to customers.” Nelson Hydro General Manager Alex Love, Dec. 1, 2008 in a letter to the BC Utilities Commission.

From 2011 to 2017, Nelson Hydro’s annual rate increases total 34.3 percent or an average of 4.9 percent per year.

It’s easy to think of electricity as a mysterious force flowing through power lines that magically illuminates and powers all we do. But in reality, it’s a tangible resource that we have direct control over.

Electricity, while treated as a commodity to be bought and sold, is actually a necessity of life for everyday living. It gives us light, heat, and cooks our food.

Our grandmothers used to tell us, “Waste not, want not.” Yet electricity customers became a powerhouse of wanters and wasters.

Canada is the third largest consumer of electricity in the world, behind only China and the United States. With 20 million fewer inhabitants, Canada uses 58 percent more electricity than the United Kingdom.

I am firmly of the belief that low energy prices contribute significantly to wastage of energy and that energy consumers should be continuously encouraged and educated to use energy wisely.

However, that message conflicts with the mission of a profit-making utility that either has to keep selling more electricity or keep charging its customers more in order to just maintain a level of profit, let alone increase that profit.

And Nelson as a community relies too heavily on the profits of Nelson Hydro to keep residential and business property taxes from being higher than they already are.

This is an unsustainable situation.

The electrical utility of today should be finding ways of helping its customers lower their bi-monthly bills, not increase them. The utility should be assisting its customers to use less electricity each and every day, not more.

Nelson Hydro relies too much on the energy efficiency programs and messages of FortisBC and BC Hydro, neither of which is a paragon of virtue when it comes to encouraging efficient energy use since they also want to make a profit and, in addition, have high long-term debts to pay off.

Nelson Hydro pays FortisBC about $6 million a year in order to supply the yearly demands of its customers in its service area, which basically encompasses the City of Nelson, and RDCK electoral areas E and F.

Nelson Hydro already discriminates against some of its rural customers by levying a higher basic charge on the bills of rural small business customers and it has floated the idea of doing the same for rural residential customers.

The basic charge that is levied against all customers should be pro-rated to energy usage so that someone who uses more electricity pays a higher basic charge, and vice versa.

Then there should be a more diverse number of Nelson Hydro programs encouraging energy efficiency among a broad and diverse array of customers, including hard-to-reach customers, renters, and those on low incomes.

Energy efficiency initiatives should serve the majority of customers so that all or most electric customers experience reduced bills.

Nelson Hydro needs to help their customers understand their energy consumption and how it impacts their energy bill. It would be beneficial to provide their customers with the tools enabling them to benchmark their energy consumption against an appropriate comparator (either a neighbour or a competitor/similar facility in the cases of a business/industrial customer).

The utility needs to better understand its customers and what motivates them and then demonstrate a benefit that resonates with them.

Nelson Hydro should consider refining its current inclining block rate structure so that it encourages more conservation and efficiency. It might want to investigate introducing time of use into its rate structure to reduce electrical demand at peak use times.

The Northwest Power and Conservation Council which oversees electricity supply throughout the Columbia Basin of the U.S. Pacific Northwest says “energy efficiency is now our second largest resource after hydropower.”

Its Seventh Northwest Conservation and Power Plan adopted in February 2016 says modeling consistently proved cost-effective efficiency met all electricity load growth through 2030 in more than 90 percent of future conditions.

“It’s not only the single largest contributor to meeting the region’s future electricity needs, it’s also the single largest source of new peaking capacity.”

One of the core values in the council’s mission statement states: “We tell people what they need to know because trust is the basis of partnership and the key to progress.”

Clearly, raising Nelson Hydro electricity rates by one-third over seven years is not progress. The utility needs to be open to change, listen to the concerns of its customers, and work with them to create a utility for future generations.

Michael Jessen is a former Nelson city councillor and an environmental consultant.


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