Two-tier electricity system deserves to be scrapped, but let’s not wait

By on January 9, 2018

News broke last week that FortisBC has finally agreed to scrap its two-tier system of residential electricity prices.

The system was put in place supposedly to encourage energy conservation, but it was poorly conceived.

A two-tier system might encourage conservation in urban settings where consumers have more choice.

But in the rural areas where FortisBC operates, it became merely a system in which consumers without access to natural gas paid for their heating at a higher rate and subsidized consumers who have the choice of gas.

Indeed the usual argument from FortisBC for keeping the system has been that the majority of customers pay less – not that there’s any evidence it encourages conservation.

While many rural residents argued that the two-tier system was unfair, none were more tenacious than Nick Marty, a retired federal energy economist, who represented Anarchist Mountain residents on this issue.

The proposed switch to optional time-of-use billing makes sense.

It may not lead to overall reduced electricity use, but by encouraging people to use electricity in off-peak hours, it does even out demand on the grid, resulting in efficiency.

The change needs to happen sooner than five years. FortisBC is a monopoly and it’s unfair to use that position to favour some customers over others.

 

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One Comment

  1. Jonathan and Gail Smith

    January 10, 2018 at 10:23 am

    During the winter month’s 87% of our Fortis electricity bill falls into the tier 2 rate as we, like many other citizens of BC, do not have access to natural gas.
    We have been paying this discriminatory rate since Fortis introduced it in 2012 6 years ago and now they want us to continue paying at this rate for another 5 years.

    While I understand that their lost revenue has to be replaced from existing customers but it must be understood that if this tier 2 rate had never been implemented in the first place everyone’s rates would have increased anyway.

    Personally I do not mind paying an extra $10.25 per month to save what would be $300 per month just to heat our home in the winter.
    I would also like to add that in the summer month’s when we do not go into the tier 2 rate our monthly bill is around $96, while in the peak of winter it is $800 –

    Fortis needs to make the right decision and eliminate the two tier rate with immediate effect.

    Thank you

    Jonathan and Gail

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