BCUC is requesting your comments on two-tier electricity pricing

The British Columbia Utilities Commission (BCUC) has issued a request for comments on the residential inclining block (RIB) electricity rate; also known as the Residential Conservation Rate (RCR). Many of you may not be aware of this, since BCUC is not publicizing this request in many regions of the Province. I only found out about it by accident (and have registered my objections with the BCUC). However, this is the opportunity that we have been fighting for. It is important that as many people as possible write in and that everyone encourage those of their neighbours without access to natural gas to write in as well. And, since there will be a provincial election next year, I would suggest sending a copy of your response to your MLA and to the NDP Energy Critic (norm.macdonald.mla@leg.bc.ca).

Below is (1) BCUC’s request; (2) my suggestions on how to respond to this request; and (3) a copy of the response that I will be sending.

1. BCUC’s Request For Comments

If you are a residential electricity customer of BC Hydro or FortisBC without access to natural gas, the Commission is seeking your comments on:

    • the impact you have experienced or identified from the residential inclining block electricity rates; and
    • your awareness of ways to mitigate any impacts.

You are requested to provide your comments using the Commission’s Letter of Comment Form found online athttp://www.bcuc.com/Register-Letter-of-Comment.aspx  Comments must be in writing, by e-mail or mail, to the Commission Secretary on or before Monday, August 15, 2016:

Email: Commission-Secretary@bcuc.com

Mail: Ms Laurel Ross, Acting Commission Secretary, BCUC, 6th Floor, 900 Howe St., Vancouver V6Z 2N3

2. My Suggestions On How To Respond

You can use my response in preparing your own, but you will need to customize it to reflect your particular situation.

With regard to the impact you have experienced, if you haven’t kept your past bills, you can request your utility to send you this information. Use whatever data best makes your case. In a letter to me, Minister Bennett claimed that “most electrically-heated homes see lower overall bills under the RCR”  This is your chance to prove him wrong. If you use sources in addition to electricity for space and water heating, such as wood or solar, it is important that you mention that.

Minister Bennett has also indicated that a way to mitigate the impact on you of high electricity prices would be for utilities to offer more programs to assist you in improving the energy efficiency of your home (such as the existing rebates for upgrading your home insulation). While such programs may be useful, it is important to tell BCUC that they would not significantly mitigate the impacts of the two-tier rates because your high electricity consumption that puts the majority of your electricity use in Block 2 is not primarily a result of your house being energy inefficient but rather a result of you being forced to use electricity for space and water heating because you don’t have access to natural gas.

The final section of my response makes the key point that it’s BCUC’s fault that we are experiencing high electricity rates (because they messed up the design of the conservation rate). Hence, the only sensible and effective way to mitigate the adverse impacts is for the BCUC to fix their errors. You are welcome to copy part or all of this section of my response.

3. My Response To BCUC’s Request For Comments

I am a residential electricity customer of FortisBC, without access to natural gas, living on Anarchist Mountain, just east of Osoyoos.

I have experienced a huge increase in my electricity bill

Under the current two-tier pricing system, the majority of my electricity consumption is in Block 2 – 70% on average. My electricity bill, for the most recent winter months (Dec 12, 2015 – Feb 16, 2016) was $977. This bill is 26% higher than my bill for the same winter period (i.e. Dec 9, 2011 – Feb 9, 2012) under the previous flat rate. It also represents a 70% increase from the first winter period that I experienced in my new home (Dec 9, 2008 – Feb 11, 2009) when my electricity consumption over that two month period was actually 8% higher. Clearly, I have been severely impacted by the Government’s electricity pricing policy, including the introduction of the RIB.

There is very little I can actually do to mitigate the impacts

I have taken the steps available to me to mitigate these bill impacts – e.g. turning down my thermostat; washing clothes on the cold cycle – but such actions have had little impact on my bill. My house was constructed in 2008, is very well insulated, and heated and cooled by a geothermal heat pump (the option recommended by governments for its efficiency and environmental benefits). There is virtually no opportunity to reduce my bill through improving the energy efficiency of my house.

The most obvious way for me to reduce my electricity bill would be to switch to wood-heating, however, due to my concerns about the adverse environmental impacts of burning wood, I did not install such a system at the time of construction. It cost me $37,000 for the geothermal heating system and another $26,000 to bring power to my house from the lot line. There would be no environmental benefits and it would make no economic sense for me to switch to solar energy, which, in any event, would not be very effective in my region which experiences many cloudy days in winter.

The negative impacts I am experiencing are primarily the result of a poorly designed “conservation” rate. They can only be mitigated by the Government fixing its design errors

The huge increase in electricity bills that I have experienced since 2012 is a direct result of the Government and the BCUC requiring electric utilities to implement a two-tiered pricing system that wasn’t properly designed to address the diverse set of electricity consumers that exist in BC. The RIB, as structured ignores the fact that there is a small percentage of BC residents (often rural) who use electricity for space and water heating and will, regardless of their efficiency levels, always consume far more electricity than the BC average. This is because most BC residents, particularly those in major urban areas, have access to natural gas and use that fuel for space and water heating, significantly reducing their need to consume electricity (since 75% of the average energy use in single detached homes in BC is for space and water heating).

In addition, the BCUC has approved Block 2 rates at a ridiculously high level. No other province charges a higher rate to its customers (except Ontario but they only charge their highest rate on consumption during peak hours). Yet, as Minister Bennett has often stated, the cost of electricity generation in BC is among the lowest in North America. And FortisBC has stated that its Block 2 rate significantly exceedsthe cost of bringing on new electricity generation. So, the reason I am paying such a high electricity rate has nothing to do with the cost of providing that electricity and has very little to do with how efficiently (or inefficiently) I use that electricity. I am paying one of the highest electricity rates in Canada on the majority of my electricity consumption simply because I live in a rural area with no access to natural gas and hence use electricity rather than natural gas for space and water heating. Setting rates in this fashion actually constitutes price discrimination which, according to BCUC’s mandate, they are supposed to be preventing.

The Government has encouraged the BCUC to implement the RIB as part of its clean energy policy. However, the consumption of hydro-electricity produces no greenhouse gas emissions and the RIB, as structured, is making rural electricity consumers switch to wood-burning which produces greenhouse gas emissions and a variety of other air pollutants.

The only way to mitigate the adverse impacts that the RIB it is having on a small percentage of BC residents is to move to a different pricing system. This could be done readily by replacing the two-tier system with some combination of flat rate/time-of-use pricing, at least for those residents who use electricity for space and water heating.

Nick Marty   teresanick.marty@gmail.com