Greater Trail mayors are seeking power in numbers before they address the province about an energy rate disparity between Fortis BC and BC Hydro.
Warfield, Trail and Montrose mayors formed an alliance last week in light of a recent energy report, which determined that Fortis consumer rates are about 20 per cent higher than its counterpart, BC Hydro.
“We already realize that we need to involve other mayors within the Fortis service area,” said Trail Mayor Dieter Bogs. “And discuss how we are going to handle this issue from a political perspective.”
The energy rate report, which has not been made public, was commissioned earlier this year by the Energy and Sustainability Committee of the Lower Columbia Community Development Team Society (LCCDTS).
“Right now, we are on a fact-finding mission,” said Warfield Mayor Bert Crockett.
“We need input and consensus from the entire service area, including the many rural directors, to determine the best strategy to move forward.”
Bogs has been appointed the spokesperson for a future strategic planning session to address concerns arising from the significant difference of residential rates between Fortis BC and BC Hydro customers.
Though specifics can’t be shared at this time, the report uncovers some of the primary drivers behind the rate differences, according to Mike Martin, LCCDTS chair.
One reason, he said, is that Fortis has completed upgrades to its distribution systems.
“Fortis had a very aggressive program over the last few years to complete system upgrades,” said Martin, in an earlier interview with the Trail Times.
“By government intervention, BC Hydro has not been allowed to do that.”
Also, BC Hydro has access to a lower interest rate because every loan is backed by taxpayers in the province.
Bogs added that BC Hydro receives tremendous financial incentives from the provincial government such as grants in lieu of taxes; benefits that Fortis BC is not subject to.
“There are substantial advantages in terms on Hydro’s debts, which are at the provincial borrowing level and significantly lower than those of Fortis,” he said. “Somehow the government needs to have Hydro and Fortis on the same playing field.”
However, the rate disparity results are somewhat marred by BC Hydro’s practise of deferral accounting.
Essentially, customers don’t see a rate increase but it shows up in the BC Hydro books as an asset.
Currently, the deferral account is sitting on a $5 billion mountain of debt that awaits ratepayers.
“We cannot lose sight of the fact that BC Hydro rates are lower, in part as a result of government intervention into energy setting,” explained Martin. “Our concern is that the debt level of BC Hydro needs to be addressed and this should not be at the expense of ratepayers within the Fortis BC service area.”
An online search for current energy rates finds that Fortis bi-monthly residential rates are listed as $30.33 based on a 60-day billing period. The first 1,600 kWh are billed at 8.803 cents per kWh; any additional kWh are billed at 12.952 cents.
Under the residential conservation rate, BC Hydro customers pay 6.90 cents per kWh for the first 1,350 kWh they use over an average two-month billing period. Above that amount, customers pay 10.34 cents per kWh for the balance of the electricity used during the billing period.