Fortis gets approval for ‘modest’ rate increase

FortisBC has received regulatory approval to increase its electricity rates by one per cent as of Jan. 1, 2020 which works out to an extra dollar per month for the average residential customer.

The company got interim approval for the increase from the B.C. Utilities Commission, saying it was needed to cover increased costs and for system investments.

“This is a relatively modest increase and the first since 2017,” said Diane Roy, vice-president, regulatory affairs, FortisBC. “Increases are needed to cover increased costs we incur to provide service to our customers, and to monitor, update and invest in the system while reflecting our ongoing efforts to operate efficiently and carefully balance costs.”

The rate change will result in an average increase of just over one dollar per month for residential customers, but individual changes will vary based on energy needs. In fact, some residential customers could see bills decrease as FortisBC continues its transition to a flat, residential rate.

“We recognize that any changes to rates can be a concern for some customers and we have a number of tools and programs to assist. We encourage customers to get in touch with us if they have questions or need assistance,” said Roy.

FortisBC provides electricity directly to customers in Kelowna, the South Okanagan and the Boundary-West Kootenay regions of B.C., and indirectly to customers in Summerland, Penticton, Grand Forks and Nelson.

The BCUC will decide on permanent rates later in 2020 after it completes its review of related filings.

BACKGROUNDER

The average increase is $13.42 per year for residential customers. Individual changes will vary based on use.

In 2019, FortisBC received permission to phase out the two-tiered residential rate by 2023 and the declining block commercial rate by 2021. Phasing out these two-tiered rates is revenue neutral for FortisBC.

For residential customers, phasing out the two-tier rate by 2023 means a decrease to the higher tier and an increase to the lower tier. The basic customer charge will also change.

o The higher tier will decrease to 14.320 from 14.915 cents per kilowatt-hour.

o The lower tier will increase to 10.799 from 10.394 per kilowatt-hour.

o The basic customer charge is changing to $17.28 from 16.58 per month (or $34.56 from 33.16 for a 60-day billing period).

For mid-size commercial customers, phasing out the declining block commercial rate by 2021 will reduce both the higher and lower tiered energy charges while also reducing the difference between the two rates. The demand charges and customer charges will also change. Commercial customers can work directly with their Electricity Technical Advisor, who can be found at fortisbc.com/contactus.