The B.C. Utilities Commissions appears to moving to rein electricity rate increases at FortisBC that in be recent years have regularly exceeded the inflation rate and hit 6.6 per cent last year.
In a decision released last month, the commission chopped away at many of the utility’s spending proposals and then told it to resubmit its rate increase calculations in light of these changes. Fortis was seeking general increases of 1.5 per cent this year and 6.5 per cent in 2013. For the years 2014-16, the utility was forecasting it would need hikes of 5.4, 10.6, and 4.3 per cent annually to keep its doors open and our lights burning brightly.
The usual interveners showed up to oppose or question the rate request: forest companies such as Celgar and Atco; Nelson, Penticton and other municipalities that have electrical distribution businesses; consumer and environmental groups; and a few individuals like former Trail councillor Norm Gabana who are invigorated at the prospect of traveling to Kelowna to sit in conference rooms for hours on end listening to lawyers and technocrats drone on. (Actually, it’s not completely dull – I used to enjoy it when I was being paid to follow the show.)
A presentation from Penticton noted the city has had to take “drastic steps” amid tough recent times to hold the line on spending and taxes and suggested the commission “challenge FortisBC” to cut costs and be more efficient so that rate increases can be reduced or eliminated.
Gabana suggested that the city’s letter was an example of “what is happening in the real world” and called for a rate freeze this year and next.
The utility justified raising rates on the basis of higher taxes and financing costs; rising purchases of power from B.C. Hydro, which cost more than the utility’s limited in-house supply; and capital expenditures to upgrade and maintain its system.
The commission said that only the proposed capital expenditures were really significant to rates in the two-year period covered. It rejected $12 million in proposed projects noting that there has been a lot of catch-up in recent years and some of the proposed capital spending was not justified.
The decision chipped away at some of the utility’s other expenses, ruling that customers should not be expected to pay for the company’s political contributions and allowing only half of its community donations to be included in rate calculations. It also suggested the company was vastly overstating the need and cost to consult with First Nations and other groups and slashed its public relations budget.
The commission rejected suggestions from interveners that annual pay increases of 3-5 per cent, which have been negotiated, or are anticipated, for union and non-union employees over the next few years are excessive. The decision notes that the utility faces large numbers of retirements and that the $40 hourly base rate paid to linemen is equal to or below comparable wages in B.C. and Alberta.
Of note, is that the commissioners rejected complaints that FortisBC’s rates are now about 20 per higher than B.C. Hydro’s. They reasoned that utilities vary in areas such as customer base, geography, energy sources, and age of infrastructure and tying one company’s rates to another makes no sense.
What this all means in terms of the current rate request remains to be determined, but it appears that the rate of rate increases at Fortis will be slowed in the coming years.
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Teck’s acknowledgement this week that its Trail operations are responsible for a hundred years worth of pollution on the U.S. stretch of the Columbia River does not appear to be a change in approach to dealing with our southern neighbours.
The corporate policy is basically one of stall, negotiate, and investigate in the hopes that any environmental problems will diminish over time and ultimately prove negligible.
The company could have long ago acknowledged that, over the years, something more than the “sweet smell of money,” as former premier W.A.C. Bennett used to describe pollution, was discharged from Trail into the river. But instead it held off the Colville Confederated Tribes until the eve of a costly and unwinnable trial on the issue.
Now the tribes can go back to paying their lawyers for the next stage of their legal campaign to force faster action on the issue while Teck funds Environmental Protection Agency-mandated studies of the river that aren’t due to be completed before 2015. Throw in a few delays and time to study the studies and work up a remedial plan with the EPA wonks and it will be 2020 before you know it.
Who knows who will still be standing by then?
Raymond Masleck is a retired Trail Times reporter.