by Timothy Schafer Local Journalism Initiative Reporter on Monday Dec 05 2022
There will be a rock under the Christmas tree for Nelson Hydro rural customers in the New Year as the city-owned utility has provincial approval to move forward with an almost 10 per cent rate increase Jan. 1.
On Nov. 22 approval (third reading only) was given by city council to implement a 9.87 per cent rate increase for all rural ratepayers with Nelson Hydro, effective Jan. 1, 2023.
Nelson Hydro had outlined in its 2023 budget the need for the general rate increase for the rural service area, and city council gave its approval earlier this year to pursue it.
That rate application was submitted in late October to the B.C. Utilities Commission (BCUC) requesting approval for a 9.87 per cent increase.
“Submission of the 2023 RRA is a notable milestone for the utility as it marks the first time Nelson Hydro has filed a rate application that is supported by a commission-approved Cost of Service Analysis (COSA) study,” noted Nelson Hydro general manager Scott Spencer in his report to council.
He added that the study arose out of a two-year long proceeding subjected to a number of modifications as directed by the commission.
“The COSA provides a model that allocates the utility’s various costs amongst the rural and urban service areas to allow rates to be set in a manner that reflects the cost of service for these areas,” Spencer explained.
“Servicing the rural area has always been a costlier endeavor given the low-density customer base that lives in heavily vegetated areas.”
Urban customers of Nelson Hydro won’t be left out of the fun as they will wake up to a 3.99 per cent rate increase — largely attributable to the 3.99 per cent general rate increase sought by FortisBC — on Jan. 1, 2023.
“The remainder of the requested increase relates to significant inflationary pressures in Nelson Hydro’s operating budget,” said Spencer.
He said when the entire utility’s budget — both urban and rural — the utility’s 2023 operating budget represents only a 1.6 per cent increase from 2022.
Case for cost
In the Nelson Hydro budget presentations this year, the 9.87 percent rate increase was attributed to the following:
• a 3.99 per cent general rate increase sought by Nelson Hydro’s power supplier, FortisBC, which also seeks an effective date of Jan. 1, 2023;
• significant inflationary pressures (approx. 5.35 per cent on materials and services); and
• increased vegetation management costs.
Source: City of Nelson Nov. 22 agenda