MAYOR AND COUNCIL’S UPDATE ON NELSON HYDRO’S RATE APPLICATION TO THE BC UTILITIES COMMISSION
In November of 2020, Mayor and Council, through its electric utility department, Nelson Hydro, submitted a Cost of Service Analysis (COSA) and Rate Design Application (RDA) to the BC Utilities Commission (BCUC). The report identified that costs between commercial, residential, rural and urban had over time become quite unbalanced and unfair for a number of reasons.
Council and staff have put a great deal of thought and care into developing a rate structure consistent with regulatory principles and accurately reflect the historical facts of the City of Nelson’s electric utility and its relationship with its rural customers. It ensures that the utility will be sustainable into the future by generating sufficient revenues to cover its costs and its investment in infrastructure renewal.
Rates are designed to provide the same rate of return across all ratepayers, and costs are contained within the two tax jurisdictions (RDCK – Areas E & F and the City). This approach is consistent with our legislative requirements and our responsibilities to our residents. While we meet those obligations and work within those limits, we are still able to provide public power sales to rural customers that are projected to remain significantly less than the alternative supplier, FortisBC.
Currently, commercial (rural and urban) and urban residential customers are subsidizing the cost of rural residents, and the City taxpayers are not receiving an adequate return on the assets of Nelson Hydro. Council has submitted the COSA & RDA to address these inequities and passed policies in the spring of 2020 that provide greater transparency and clarity to how rate calculations are determined.
The rural ratepayers that are swept up in this are effectively advocating for brand new rights for themselves. When requesting electrical service from the City of Nelson in 1922, rural residents did not ask to buy into the Nelson electrical system; they did not strike a deal to earn ownership; and, they didn’t even ask for rate parity with their City counterparts, rather they negotiated a fair rate that reflected the cost to serve them while providing a fair return to the City. This rate application will re-establish these agreements with our rural neighbours while still providing fair and reasonable rates.
Mayor and Council, through the Nelson Hydro EcoSave program, are fully committed to working with all customers to lower their energy usage and reduce the impact of any rate increase.
We encourage you to review Nelson Hydro’s application, especially section 3 – Background and Relevant History of Nelson Hydro and Section 4 – Legal and Regulatory Context. https://www.bcuc.com/Documents/Proceedings/2020/DOC_60270_B-1-NelsonHydro-Cost-of-Service-Analysis-and-RateDesign-Application.pdf
If you wish to make comments to the BCUC, the deadline to submit a letter or email is the end of the day, on Thursday, March 4th, 2021. Emails can be sent to email@example.com. To learn more on how to submit a letter or email to the BCUC, please visit: www.bcuc.com/get-involved.
To learn more about reducing your energy costs, visit: http://www.nelson.ca/222/EcoSave-Program