Proposed Electrical Rate Increases

The City of Penticton is holding a public input session to receive input on the alternatives being considered for 2012 electric rate increases.  This session will be held on Wednesday January 18 at 6PM, in City Hall Council Chambers.  Also note that this is a change from the originally scheduled date of January 9.

The electric rate increase will consider three separate issues.
  1. The amount of the rate increase.
  2. Re-balancing rates between residential, commercial and industrial customers to more closely match FortisBC rates.
  3. Premium to charge to recoup lost revenue caused by the difference in rate implementation dates between FortisBC and the City of Penticton.

Alternatives Under Consideration

Alternatives 1 thru 3 each apply a consistent rate increase to each class of customer, residential, commercial and
industrial as noted below.

Alternative 1 Increase electrical rates by 4.00% for all customer classes.

Alternative 2 Increase electrical rates by 2.58% for all customer classes.

Alternative 3 Increase electrical rates by 3.29% for all customer classes.

Alternatives 4 thru 6 recover the same level of electrical revenue for the City as do alternatives 1 – 3 respectively but recover it mostly from residential customers in an effort to re-balance rates to more closely mirror those used by FortisBC.

Alternative 4 Re-balance residential, commercial and industrial rates, maintain same amount of revenue recovery as Alternative 1 with recovery coming mainly from residential customers. Resulting in a rate increase of 7.59%, 0.08% and 0.00% for residential, commercial and industrial customers respectively.

Alternative 5 Re-balance residential, commercial and industrial rates, maintain same amount of revenue recovery as Alternative 2 with recovery coming mainly from residential customers. Resulting in a rate increase of 4.89%, 0.05% and 0.00% for residential, commercial and industrial customers respectively.

Alternative 6 Re-balance residential, commercial and industrial rates, maintain same amount of revenue recovery as Alternative 3 with recovery coming mainly from residential customers. Resulting in a rate increase of 6.24%, 0.07% and 0.00% for residential, commercial and industrial customers respectively.

Understanding the Options

The first three options presented (Alternative 1, 2, 3) incur across the board rate increase of 4.00%, 2.58% and 3.29% respectively
resulting in a maximum increase of $3.61 for residential customers, $23.68 for commercial customers, and $722.74 for industrial customers. This is an estimated average monthly increase.

The second three options presented (Alternative 4,5,6) include the same level of revenue recovery as Alternatives 1,2,3 respectively but recover the revenue mainly from the residential customer. This is a re-balancing of the residential, commercial and industrial rates to more closely mirror those rates used by FortisBC.

The average monthly increase by customer class and alternative can be seen in the chart below. The maximum increase for
the average residential customers would be $6.86 per month. The minimum increase for the average residential customer
would be $4.42 per month.

(click on the chart to view larger)

Loss of Revenue from Different Rate Implementation Dates

The City will face a revenue shortfall caused by the difference in implementation dates of the rate increases. The amount of the
revenue shortfall is different depending on the percentage of the increase being applied. An increase at the retail level of 4.0%,
2.58% and 3.29% requires a premium of 0.42%, 0.27% and 0.34% respectively to be applied to recoup the loss in revenue.

Schedule

December 19, 2011 Introduction of the proposed rates
January 18, 2012
Public input session
January 18, 2012 First 3 Readings of an amending Bylaw to the Fees and Charges Bylaw
January 23, 2012 Adoption of the amending Bylaw to the Fees and Charges Bylaw
February 1, 2012 New electrical rates take effect

This advertisement is an update to an ad published the week of December 23rd and January 1st in this paper. Clarifications have
been made to provide a better understanding of the options available — none of the numbers have been altered. The City of
Penticton encourages all interested to attend the public input session for further understanding and clarification.

Related Documents

For Further Information and Clarification

For future updates, please continue to visit www.penticton.ca or contact Mitch Moroziuk, Director of Operations.