Electricity rate critic applauds proposed return to single-tier rate, but angered it will take five years

By on January 9, 2018

Nick Marty has been speaking out for more than three years about the impact of two-tier electricity rates on rural customers without access to natural gas. (Richard McGuire photo)

A vocal opponent of FortisBC’s two-tier electricity rates is pleased by the recent announcement that the utility is proposing to return to a single-tier rate, but he’s upset the change will take five years.

Nick Marty, a retired federal energy regulator who has been the voice for Anarchist Mountain residents on this issue, has argued that those using electricity to heat their homes are subsidizing those who have access to natural gas.

“I’m pleased that after years of customers complaining that Fortis has finally admitted that the two-tier system isn’t working properly and that we need to return to a flat rate,” Marty said in an interview following the FortisBC announcement.

“But the major problem is they don’t want to actually get there until 2023. They want us to continue to cross subsidize the majority of Fortis customers for another five years.”

Marty wants the return to a flat rate phased in over one year instead of five.

“Why not?” he asks. “If something isn’t working, it’s not promoting energy efficiency, in fact it’s promoting energy inefficiency, it’s actually promoting greater consumption of fossil fuels leading to increased greenhouse gas emissions and increased pollution.”

FortisBC maintains that the phased-in approach is intended to mitigate annual rate impacts for lower-consumption customers.

The return to a single-rate structure, with the option for time-of-use billing, must still be approved by the BC Utilities Commission (BCUC).

Under time-of-use billing, customers would pay for electricity at a higher rate during peak hours, but would get a discounted rate for using electricity during off-peak hours.

The current two-tier system was ostensibly intended to promote energy conservation, but FortisBC has often claimed that a majority of customers – those with access to natural gas – pay less than they would under a single-tier system.

To an energy economist like Marty, this flies in the face of the basic law of supply and demand. Lower prices encourage consumption while the higher-tier rate encourages consumers to heat with natural gas or wood.

Marty points out that customers who heat with gas would only see a small increase in their electricity bills under a single tier system while the minority of customers without access to natural gas would see a substantial drop in their bi-monthly bills.

“It’s price discriminating against customers that use electricity for space and water heating, essentially taxing them and using the revenue to subsidize the rates of the remaining Fortis customers,” Marty said, referring to the extension of the current two-tier system for five more years. “None of this is appropriate.”


Osoyoos Times



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