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February 28, 2019 - 3:58 PM
PENTICTON - Fortis B.C.’s much-maligned two-tiered residential electrical conservation rate will disappear over the next five years.
The two-tiered rate that bumped up the cost of electricity for high usage residential customers will be phased out over a five-year period, Fortis BC announced in a press release today, Feb. 28.
The return to a single, flat rate for residential electricity customers was requested by Fortis B.C. during the B.C. Utilities Commission latest rate review in December, 2017.
The two-tiered rate, known as the residential conservation rate, was instituted in 2012 in a bid to encourage energy conservation, according to Fortis B.C. Customers pay a higher rate when their use exceeds 1,600 kilowatt hours over a two-month billing period.
A return to a flat rate means 30 per cent of customers being charged the higher rate under the two-tiered system will see savings, the utility said. Fortis B.C. said it pushed for the phased approach in order to reduce the bill impacts for lower use customers who will see moderate bill increases as a result of the change.
The rate change is a revenue-neutral move, Fortis B.C. said.
“We’re satisfied with this result,” Fortis B.C. vice president of regulatory affairs Diane Roy said in the press release. “During rate design process, we heard from many residential customers with concerns about the two-tiered rate, particularly those with high energy needs and limited conservation options. A gradual return to a flat rate balances the interests of our residential customers."
The two-tiered system was considered controversial by a South Okanagan advocacy group. Spokesperson Nick Marty had said it had the opposite effect on energy conservation by forcing further use of fossil fuels and providing a subsidy for the majority of Fortis B.C.’s customers.
The Anarchist Mountain Community Society, headed by Marty, worked with the Regional District of Okanagan Similkameen under intervenor status during the utilities commission review in a bid to get Fortis B.C. to return to a single rate immediately.
“There’s no way it should be phased out over five years,” Marty said at the time. "That’s ridiculous, because the two-tier system has not been encouraging efficiency, it’s resulting in using of more fossil fuels as people switch to wood burning stoves, and it actually taxes customers who use electricity for water and space heating, using the revenue from that to subsidize the majority of Fortis customers.”
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