Some Anarchist Mountain residents will pay more under return to single-tier electricity rate, FortisBC says

By on January 30, 2018

Some of the Anarchist Mountain residents who want a return to single-tier electricity rates may find they’ll actually pay more than they do currently with the two-tier system, according to FortisBC.

The suggestion was made in a recent letter to the editor in the Osoyoos Times by Diane Roy, vice president, regulatory affairs, with FortisBC. A FortisBC spokesperson has now explained why this would occur.

“A large proportion of our residential customers, including in the Anarchist Mountain area, can expect to see a bill increase as a result of phasing out the two-tiered rate,” Roy said in her letter that the Osoyoos Times published on Jan. 17.

Nicole Bogdanovic, corporate communications advisor, explained that any residence using under 2,500 kilowatt-hours (kWh) in a two-month billing cycle pays less under a two-tier rate, even though consumption over 1,600 kWh is billed at the second-tier rate.

“It’s a common misconception that bills would be higher than a flat rate as soon as consumption hits the second tier,” said Bogdanovic. “This is not true. The breakeven point is 1,250 kWh on a one-month bill cycle or 2,500 kWh on a two-month bill cycle. Assuming people use the same consumption each month (they don’t), this equates to 15,000 kWh per year. Most of our customers are below this amount.”

Customers pay a lower rate of 10.117 cents per kWh for any electricity used up to a threshold of 1,600 kWh in a two-month billing cycle.

Any electricity used above the 1,600 kWh threshold is billed at a second-tier rate of 15.617 cents per kWh.

Customers using less than 2,500 kWh in a two-month billing cycle save more on the lower-tier portion of their bill than the extra they pay on the electricity billed at the higher tier.

“There are many Anarchist Mountain customers who are close to or within this range and will see a bill increase as we phase out the two tier rates (assuming their consumption stays at the same level),” Bogdanovic told the Osoyoos Times in an email.

And, because electricity usage isn’t the same year round, some customers who pay more under the two-tier system in winter may fall under the 2,500 kWh breakeven point at other times of the year.

“The average consumption for Anarchist Mountain customers (that have active service throughout the year) is about 18,400 kWh per year,” said Bogdanovic. “This suggests that many of these accounts are close to or below the 15,000 kWh break even amount. In fact, an immediate return to a single rate could result in higher annual billing for about 40 per cent of these customers.”

She suggests that customers contact FortisBC to see how the phase-out of the two-tiered rate will impact their unique situation.

Customers can also check their own consumption on their account online, which shows hourly consumption.

The five-year phase-out of the two-tier system must still be approved by the B.C. Utilities Commission (BCUC).

FortisBC also wants an optional time-of-use billing system in which customers would be charged a different rate depending on whether they use electricity in peak or off-peak hours.

“If approved, time-of-use will be another option in addition to our conservation programs to help customers who would like to reduce their bills,” said Bogdanovic. “The option they choose and the amount they can reduce will depend on each unique situation.”

FortisBC has proposed a rate of 22.435 cents per kWh for peak use; 11.869 cents for mid-peak use; and 9.280 for off-peak.

This means, for example, that a customer opting into this program could reduce the electricity cost by more than half by running an electric dryer at off-peak instead of peak hours.

Nick Marty, the Anarchist Mountain resident who has led opposition in his community to the two-tier rate structure, maintains that the system results in users without access to natural gas for heating subsidizing those who can use gas to keep their electricity consumption low.

He wants the two-tier system removed in one year instead of being phased out over five.

In her letter, Roy said the five-year phase-out reduces the annual bill impacts for the majority of customers while still reducing bills for heavy users.

“In fact, if the change occurred immediately, the majority of our customers would face an increase in excess of 10 per cent,” Roy wrote. “In contrast, by phasing out the two-tiered rate over five years, we reduce the annual bill increase to, at most, 3.5 per cent, with many of our customers seeing a smaller increase or even a decrease.”


Osoyoos Times



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One Comment

  1. Les Dewar

    January 26, 2018 at 1:37 pm

    Maybe Fortis could just lower the price of electricity in order to encourage more people to use it, instead of using fossil fuels and wood that chokes the valley with smoke. I really don’t understand the concept of trying to make people use less electricity. Why, in the 21st century, should people be forced to sit in the dark and freeze in their houses, when there is no shortage of electricity? On the one hand we are told to stop using fossil fuels and then on the other hand, told to cut back on electricity. Go figure.

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