South Okanagan man hopes to challenge Fortis B.C. on rate application

PENTICTON – With three different positions being argued regarding the future of Fortis B.C.’s two-tiered residential conservation rate, intervenor Nick Marty hopes an oral hearing will be called as the application proceeds.

Marty made expert submissions to Fortis B.C. on July 31 on behalf of the Regional District of Okanagan-Similkameen and the Anarchist Mountain Community Society challenging the two-tiered residential conservation rate.

Marty’s expertise stems from a career with the federal government in energy policy. He was the director of policy for the office of energy efficiency with Natural Resource Canada.

His challenge to the rate argues the two-tiered system should end now. Fortis B.C. is in agreement the rate should be dropped, but wants to phase it out over a four-year period. He says the rate will continue to penalize those using electricity for space and water heating to the tune of $14 million over the four year proposed phase out period.

The B.C. Sustainable Energy Association and the Sierra Club are also involved in rate application discussions. Those two groups want to see the rate continue, but Marty says they don’t understand the issue.

Marty says the rate has punished those who use large amounts of electricity because they have to, not because of inefficient use.

His submission includes testimonials from 200 regional district residents affected by the conservation rate, which Marty says has resulted in a cross-subsidy to low electricity users from high electricity consumers of between $30 and $40 million since the rate came into effect in 2012.

“The sustainable energy association and Sierra Club are arguing for a system which would actually be bad for the environment, because the first and second rates, as well as the threshold rate, was set wrong, which has resulted in higher rates being charged for those using electricity for water and space heating and a resulting substitution away from hydro to fossil fuels, which is actually harming the environment,” he says.

He says high-energy consumers are being overcharged to the benefit of low energy consumers.

“As a result, the rate has been promoting inefficiency rather than efficiency, promoting the substitution of fossil fuels for hydro and increasing air pollution and greenhouse gases,” he says.

Marty says Fortis estimates the cost of new electricity generation is now lower than the present flat rate for electricity. He says if the second tier rate was set to electricity’s actual cost today, Fortis would have a declining balance rate where the second tier would be lower than the first.

“Based on that, there is no point in continuing with the residential rate because the purpose of the rate is base on marginal cost being greater than the first tier rate. If it’s not, there’ s no point to it,” he says, adding the Sierra Club is arguing the marginal cost has been calculated incorrectly, and is actually higher than the first tier rate, so it should continue.

“My question to them is, they are addressing one rate to be fixed, but what about the other two?”

Marty is pressing for an oral hearing, which would take place the week of Oct.15.

“We have contradictory evidence – mine and Fortis’ – and they don’t match,” he says.

A report to regional district directors prepared for a board meeting tomorrow, Aug. 16, says the process will eventually wrap up with arguments by intervenors and Fortis before the new rates, whatever they might be, go into effect starting Jan. 1, 2019.

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