FortisBC is recommending to return to a single flat rate.
On Dec. 22, the company submitted its cost of service analysis and rate design application to the BC Utilities Commission (BCUC) and in it, recommended returning to a single, flat residential rate and re-establishing a time-of-use rate as an option for residential customers, according to FortisBC.
“We’re committed to ensuring all our customers are billed fairly for the energy they consume and in a way that meets their needs while providing opportunities to encourage conservation,” said Diane Roy, vice-president of regulatory affairs. “These recommendations reflect a comprehensive review of FortisBC’s current rate structure and make sure rates paid fairly reflect the cost of providing service.”
All utilities review cost of service allocation and rate design periodically to make sure that rates reflect the fair and equitable allocation of costs, according to FortisBC. Through the rate design process over the last year, FortisBC looked at the cost of providing service to each rate class and reviewed several options for rate design. During this review process, FortisBC also encouraged input and feedback from the public.
“FortisBC understands that electricity rates and bills matter to our customers and consulting with our customers and various stakeholders was an important part of this rate design process,” said Roy. “We heard from many participants with concerns about the two-tiered rate, particularly those with high energy needs and limited conservation options.”
If approved, the return to a single flat rate for residential customers will be phased in over five years by reducing the difference between the two tiers of the residential rate and increasing the customer charge that was frozen for a period of time under the residential conservation structure. This phased-in approach is intended to mitigate annual rate impacts for lower consumption customers, said FortisBC.
By re-establishing time-of-use rates, residential customers still have an option to reduce their energy costs by shifting their high consumption activities to off-peak hours. This time-of-use option is one of the benefits made possible by advanced meters which now provide accurate hourly consumption data. FortisBC’s application recommends a redesign of this rate option for all other customer classes as well.
Overall, changes from a rate design review are revenue-neutral for FortisBC. The company’s last rate design application was submitted in 2009. For more information about the rate design consultation process and the options that were considered, visit fortisbc.com/electricratedesign.
As a regulated utility, FortisBC sets its rate structure through a rigorous and transparent process with the BCUC. FortisBC expects a decision on its electric rate design by the end of 2018 with the new structure coming into effect in 2019. Customers are encouraged to follow the proceedings at bcuc.com.