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City council upset with Fortis raising substation ticket price

City council is angry with Fortis B.C. asking for $750,000 in non-project costs for the Westminster electrical substation upgrade project.
January 29, 2014 - 9:28 AM

"I FEEL LIKE I'M GETTING SCREWED WITH MY PANTS ON."

PENTICTON - Council is angry with Fortis B.C. asking for $750,000 extra when it already agreed to a $4.96-million deal to upgrade the city's Westminster electrical substation.

The $4.96 million project will pay for substation upgrades and installation of a 12 kilovolt transformer. The work will increase system security with the improved substation being able to handle a higher electrical load and be more flexible in the event of an emergency. The cost could vary by minus 10 to plus 30 per cent and city council agreed to an upset limit of $6.45 million. The company also asked for a $1.87 million deposit to buy the transformer.

The city agreed on all counts after months of negotiation but the company told the city in mid-January it now wants $750,000 more but not for construction or capital costs. Three Fortis B.C. officials said this money will go into company coffers and then come out as benefits to its customers through lower electrical rates.

Fortis B.C. project manager Pierre Dufour said the company had unexpected problems the past year including a labour disruption and additional "competing pressure." The labour dispute means double duty for 2014 as company projects, booked for 2013, will now have to be completed this year alongside 2014 projects. 

"We are helping you to pay for the labour strike," Coun. Helena Konanz said.

Dufour said no that is not the situation here.

"The actual markup has no relation to the cost of the substation itself," Coun. Wesley Hopkins said. Dufour said the markup is not directly related to the substation work.

"I have a problem with that," Hopkins said. "There's an agreement with Fortis about costs and this $750,000 is outside the agreement."

"It's almost a million dollars. We are not talking peanuts here," Coun. Katie Robinson said.

"I feel like I'm getting screwed with my pants on," Hopkin said.

Operations director Mitch Moroziuk said work on the substation is expected to be completed sometime in 2015 and the city should buy the new transformer as soon as possible.

He explained transformers are custom made and can only be installed in the spring and fall months to avoid high-power demands caused by air conditioner use in the summer and electrical heating use in the winter. Any delay in procuring the transformer could delay the whole project by half a year.

The operations director asked the Fortis B.C. officials if the transformer could be purchased and the rest of the costs be negiotated later. They said no.

Moroziuk also confirmed there are other contractors outside of Fortis B.C. who could do this work.

Council deferred further discussion on this matter until the next council meeting on Feb. 3.

To contact a reporter for this story, email Shannon Quesnel at squesnel@infotelnews.ca, call 250-488-3065 or tweet @InfoNewsPentict.

News from © InfoTel News Ltd, 2014
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