Starting February 1, Penticton residents can expect their electric rates to jump by 4. 4 per cent, or about $4.50 a month for residential customers.
During a special council meeting Wednesday evening, Penticton city council voted 4-3 for the rate hike, which applies increases in the city’s costs to an average of the wholesale purchase price and the retail prices charged to customers.
That is the middle option of three presented by staff, ranging from 5.11 per cent if the increases were applied solely to the retail price down to 3.7 per cent if applied to the purchase price. For an average industrial customers, the difference is higher, about $930/month.
Frank Conci, president of the Penticton Industrial Development Association, tried to show council how much an effect ongoing increases have had on industrial users. The industry in his example spent nearly $3.3 million on electricity between 2010 and 2014.
“If there hadn’t been any rate increases it would have been $2.8 million. So the cost impact of the increases over the four years is $400,000 plus,” said Conci, who suggested council stick to passing the actual increase on to customers as well as looking at setting rates that our more competitive with other power utilities.
Daryl Clarke, plant manager at Cut Technologies, which employs about 36 people, said this is not the time to burden industry with extra costs. Rising power rates, said Clarke, could be the difference of hiring another person and also have an effect on where his head office chooses to invest money.
Coun. Helena Konanz advocated strongly for the lowest rate increase.
“The difference between our rates in Penticton and those throughout the rest of the province are quite astronomically higher than many other communities,” said Konanz.
Director of Operations Mitch Moroziuk showed graphs putting Penticton roughly in the middle of the pack, with B.C. Hydro, and other city utilities in Summerland and Nelson below Penticton’s rates. He said going with the lowest increase would result in the city making less money from the electrical utility.
“That would then have a carryover impact into your capital budget or other areas of your operating budget. But that is an option that is available to you,” said Moroziuk. “You would have to find $228,000 in your budget.”
Coun. Max Picton argued raising electric rates was better than alternative ways of dealing with the current budget shortfall.
“In essence we are looking at dumping it on everybody’s backs again with a tax increase rather than a electrical increase,” said Picton.
Mayor Andrew Jakubeit supported Picton’s argument.
“People have a choice, because it is billed on consumption. You can choose to try to be more energy efficient. But $228,000 on a tax bill, everyone pays for that,” said Jakubeit.
Couns. Tarik Sayeed and Judy Sentes voted with Jakubeit and Picton in favour of the 4.4 per cent increase, with Couns. Konanz, Campbell Watt and Andre Martin in opposition. A final vote on the rate increase will be held at the regular council meeting Jan. 12.