May 20, 2015 - 11:31 AM
PENTICTON - Another price hike in the cost of power has city council scrambling to find a solution that won't impact taxpayers.
City of Penticton councillors appear to be well aware of the public’s distaste for another power price hike, following a 4.4 per cent increase earlier this year, but finding a solution that will not involve dipping into the taxpayers’ pocket is proving elusive.
At a regular council meeting May 19, Director of Operations Mitch Moroziuk said the 2.2 per cent rate increase, announced by Fortis B.C. on April 21 and set to take effect July 1, would require the city to pay an additional $345,000 above what had already been budgeted for power purchases.
Staff looked at three ways to apply the increase to consumers, similar to what had been done earlier in the year, by applying at the retail, wholesale or average of the two levels. Staff recommended applying the increase at the wholesale level, which would have least impact on consumers at 1.8 per cent.
Moroziuk said the city was currently in the midst of a rate review, which would ultimately lead to new rate settings for water, sewer and electrical rates. The rate review is expected to be completed in mid September.
Mayor Andrew Jakubeit asked Moroziuk about B.C. Utilities Commission, noting a mid year rate increase was unusual. He said he felt Fortis was holding the city 'hostage' to rate increases.
“This is the first time I’ve seen a mid year increase since I’ve been here,” Moroziuk said, noting the increase had been endorsed and the city was now bound to find around $350,000 to pay Fortis. “There are alternatives, but unfortunately, those alternatives do impact our budget. We could look at capital spending or our administrative costs, but that would affect our budget."
Moroziuk encouraged council to wait until the rate review was complete in order to more clearly spell out administration fees and dividends received from the electrical rates.
Councillors Helena Konanz and Andre Martin both said they are unwilling to pass the increase along to city taxpayers. Martin asked if there are sufficient reserves in the electric utility to pay for the increase.
“Rates have been going up incredibly, every year. I don’t think it’s appropriate to raise rates at this time. I’m sure the rest of council doesn’t either,” Konanz said.
A motion by Konanz to request staff to find the funds in capital projects or in surplus to make up the increase, was defeated by Jakubeit and councillors Judy Sentes, Max Picton and Campbell Watt. A subsequent motion to accept the staff recommendation to pass on the increase based on the wholesale rate of 1.83 per cent was then made by Sentes, which passed with Coun. Tarik Sayeed, Martin and Konanz opposed.
The rate hike will add approximately $2 to the average residential homeowner’s monthly electrical bill.
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News from © InfoTel News Ltd, 2015