Electrical Services

Nelson Hydro

Nelson Hydro is a City of Nelson owned and operated utility, and is the local supply authority for electrical service in the City of Nelson and surrounding area. The Nelson Hydro service area covers from the Nelson Hydro Power Plant on Kootenay River to the west, Blewett, Taghum, Sproule and Grohman Creek, the City of Nelson, Hwy 6 south towards Salmo to Perrier Road and beyond, north and east along Kootenay Lake to Harrop - Procter, Balfour, Queens Bay and terminating at Coffee Creek north of Queens Bay along
Kootenay Lake.

Electrical Service Area Map 2009 [PDF - 821 KB]

Nelson Hydro connects to the FortisBC system at Coffee Creek, the Nelson Hydro Power Plant at Bonnington and at the Rosemont Substation in the Rosemont area in the City of Nelson. Nelson Hydro is very unique in that it is one of the few Municipally owned and operated utilities to have its own generation, transmission and distribution systems.

Supply

Includes Power Purchase and Generation - activities associated with the procurement and production of the electricity commodity.

Power Purchase

Approximately 45% of our annual energy requirements are obtained via power purchase. The supplier has historically been West Kootenay Power, now FortisBC under the current traditional regulatory environment. Power purchase represents approximately 30% of our annual operating costs.

Generation

Nelson Hydro owns and operates a 16 MW hydroelectric generation facility located at Bonnington Falls on the Kootenay River 16 km southwest of Nelson. The current water license allows a year-round output of 9.1 MW, which represents about 55% of our annual energy requirements. Operating costs for generation includes maintenance of the four generating units and of the buildings and property, water license fees and insurance. The powerplant serves an important function in that it tempers the rate impacts that FortisBC increases would otherwise have on our customers.

Transmission & Substations

Nelson Hydro owns and operates about 20 km of 63 kV transmission line that links the Powerplant and our supply points from FortisBC to our substation facilities in the City. Nelson Hydro also manages seven substation facilities - five within the City, one on the North Shore and one at the Powerplant. The facilities serve to convert transmission supply at 63 kV to distribution supply, primarily at 25 kV. Expenditures in these areas include crossarm and insulator replacement and outage response for the transmission lines and building, structure, switchgear and transformer maintenance in the substations.


Distribution

The most extensive portion of the Nelson Hydro system involves delivery of the electricity commodity to individual customers. This includes the medium (between 750 and 63,000 volts) and low (less than 750 volts) voltage facilities of Nelson Hydro, including transformation. Expenditures in this area include crossarm, insulator and conductor replacement, primary and secondary connector renewal, transformer maintenance, vegetation management and outage response.

Metering

All field activities associated with revenue collection is grouped under Metering. Expenditures include labor and vehicles for meter reading, connects, disconnects and all activities associated with Measurement Canada certification of new meters and re-certification of meters in service.

System Operations

Activities that support and benefit the functions above are grouped into this category. Drafting, technical design services, easement costs, radio and alarm maintenance, standby, tool repair and replacement and insurance are the major items included in this category.

Administration

Supervisor salaries, training, legal and consulting fees and Nelson Hydro's annual rent at the City Works Yard are the major components of this category. Also included in this category are Nelson Hydro's share of City Hall staff in support of billing, computer services and other administrative functions.

Industry Restructuring

Since the early 1990's, particularly in the United States, the electric utility industry has been positioning itself for competition similar to the situation that phone and natural gas have experienced. In the last five years, the British Columbia Utilities Commission has made only minor moves towards customer choice. Wholesale customers such as Nelson Hydro have the ability to choose their electricity supplier, provided that two year's notice is given to the current supplier. There are no near-term plans to offer choice to the rest of the market. In 1997-98, Nelson Hydro and the five other wholesale customers of West Kootenay Power issued a request for proposals for supply of electricity and other services. Three potential bidders expressed interest, but ultimately declined to submit proposals because they were unable to offer a price lower than the current FortisBC tariff rates. Based on these conditions, Nelson Hydro has entered into negotiations for a new five-year supply contract with FortisBC.

External Rate Impacts

West Kootenay Power has made application to update their transmission facilities in the Kootenay-Columbia Valley from South Slocan to Waneta in partnership with Cominco and Columbia Power Corporation. West Kootenay Power's estimate of the rate increase required to fund these improvements is about 5% over seven years. Because only 28% of Nelson Hydro's cost of service is due to power purchase, the rate increase required for Nelson Hydro to pass on to their customers is 28% of 5%, or 1.4%. The importance of our ability to generate a significant portion of our energy requirement with Bonnington Falls becomes clear.

Outlook

Simply stated - rates are going up! In Canada, jurisdictions that have been in a position to develop significant hydro-electric resources have been able to keep rates low. Places that have developed thermal or nuclear generation have not been as successful. It is safe to say that there is little or no additional hydro resource left to develop. BC Hydro's recently released Integrated Electricity Plan states that at least 70% of their new resource additions in the next ten years will be fired by natural gas. Natural gas prices have seen massive increases recently as US markets become more readily accessible. Increased fuel costs mean increased electricity costs as our dependence on thermal generation increases.

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