The Jan. 7 special meeting of Penticton city council was illustrative.
The agenda focused on which of three electrical rate increases recommended by city staff would be imposed on residents and businesses for 2015. In an effort to avoid any tough fiscal decisions, council, with the notable exceptions of councillors Konanz, Watt and Martin, chose the middle of three options. This outcome was to be expected and therefore no surprise.
What the meeting exposed, was not that our elected officials by and large simply enact the staff bureaucracy’s policies — that is a given — but rather the extent to which the city owned electrical utility distorts the rate residents and business pay for electricity and how its operations provide cover for the most spendthrift of our councillors to continue to spend freely on largely unnecessary programs.
Whether by design or accident (I suspect the former, but have no evidence) the financial operations of the electric utility are hidden in the general accounting of the city. The detail is available, but few residents would take the time to investigate. Regardless, the contribution the electric utility makes to general surplus is significant, in the $2 million annually range. This is money that is extracted from each electric power consumer, and these funds help subsidize city programs and operations. In effect, the “profit” of the electric utility is an additional tax on business and home owners, who then subsidize, without recourse, all city expenditures to a varying degree.
Putting aside the “fairness” of this arrangement, the Penticton power utility charges residents and businesses a significant premium for the privilege of “owning” a utility. Councillor Konanz, to the chagrin of staff and council, brought forward data indicating that large industrial users are paying 38 per cent ($84,000 annually) more for power from Penticton than a similar customer would pay Fortis (Fortis is the City’s electricity supplier) in a place like Summerland. For smaller businesses the difference is, on average, $200 each month. For residents is $2.60/mo on average, but Penticton electrical charges residents on low side of the broader market.
For a council, all of whom campaigned on jobs and accountability, one would have expected this revelation to cause debate and calls to action. It did not. Council raised your rates again.
Penticton residents and businesses would, on the face of it, be far better off purchasing power directly from Fortis. Obscuring the actual financial condition of the city by rolling the utility’s “profit” into general revenues allows staff and certain of our elected officials to funnel money to pet projects and bolster the bureaucracy at city hall, yet claim they are working to keep your taxes low. 18 months after the contentious core review, and downsizing of city staff, the number of full time equivalents at city hall is back to pre-core review levels, and there are plans to hire seven more full time positions. It is unclear what explosion in economic activity requires this expansion, but we’ll all be paying for it, in part on our power bills.
When the 2015 fiscal budget is released with its “modest” 1.9 per cent increase, bear in mind, if you are a utility power customer, you are, in effect, paying an additional tax each month on your electric bill. If you don’t want to pay the extra, as Mayor Jakubeit suggested, you can turn your lights off.