From Nick Marty

My concerns about Fortis presentation to be made today:

In their June presentation they listed their “rate design principles” which included “fair appointment of costs among customers”, “price signals to encourage efficient use” and “avoidance of undue discrimination”. And I wrote in saying they should add impact on the environment to this list which is a clearly stated priority of the new government.

In this presentation, they don’t mention any of these principles (presumably because the two-tier system wouldn’t actually meet any of them) coming up instead with a different set of “guiding principles” including:
– 95% of customers should have bill increases no greater than 10% as compared to existing rates
– promote conservation

On that basis, Fortis rejects the flat rate option because it has “unacceptable bill impacts”. They then go on to examine some changes that might be made to the two-tier rate system including adding time-of-use rates but given their starting principles they are clearly intending to maintain a system where the minority continues to subsidize the rates of the majority.

It will be key to question Fortis hard on their “guiding principles”. What’s the basis for the 95% principle? Did they come from BCUC? From the new NDP Government? And why is this the most important principle and the basis of all their “analysis”. Why are they now ignoring the rate design principles outlined in their June presentation? Is this because the RCR doesn’t meet these principles? “Promote conservation” is very different from “price signals to encourage efficient use”. What happened to “fair appointment of costs among customers” and “avoidance of undue discrimination”? In fact, their 95% principle guarantees discriminatory rates? It would appear that Fortis’ sole guiding principle is actually to maintain the shifting of the burden of rate increases onto a minority of customers even though this is resulting in incorrect price signals not related to cost and discriminatory rates. How come there is no “environmental” principle? “Promoting conservation” of zero-emitting, renewable hydro by charging higher rates provides no social benefits but increases greenhouse gas and other air emissions (including harmful particulates from wood burning) by encouraging customers to switch to fossil fuels such as natural gas, heating oil and wood.

The Chair of the BCUC told me that BCUC would not be directing Fortis to come up with any one option (which is what happened in 2012 when Fortis was ordered to switch to two-tier rates). Which means that Fortis can no longer deflect our criticisms by pointing to someone else. So we need to demand answers to these questions. Good luck.

***
Fortis BC is holding a “rate design consultation session” on Wed. July 26, 6:00 pm at the Watermark Beach Resort, Vineyard Room, 15 Park Place, Osoyoos.