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Electricity will cost more for Okanagan customers of FortisBC, starting Saturday.

Fortis has completed its annual rate review with the B.C. Utilities Commission and received approval for an increase of 1.6 per cent.

Fortis said in a statement the increase is necessary to allow upgrades and improvements to the electrical system, and to purchase added capacity.

“Since 2004, FortisBC has invested over $1 billion in safety and reliability upgrades, so this is a continuation of that,” said Michael Allison, manager of corporate communications for the utility. “It’s essentially infrastructure, capacity purchase agreements and things to ensure, long term, our customers’ service integrity is maintained.”

The additional capacity is needed to accommodate peak usage in winter, according to Allison.

He said the infrastructure the increase pays for does not include smart meters.

“Advanced meters are actually going to pay for themselves,” he said.

Allison said the $51-million program will pay for itself by eliminating the need for employees to go door to door to check meters, and by helping to locate outages quickly and easily.

In addition to the new increase, a 3.5 per cent interim increase from Jan. 1 was made permanent.

Having the two increases within one year is unusual, but Allison said that's because Fortis and the BCUC recently changed their rate-making structure.

“Typically, we would be able to wrap up all the rates in the fall of 2014 and have that ready for Jan. 1,” Allison said. “Since we were working with the B.C. Utilities Commission on this regulatory structure, that was delayed and so an interim rate change was put in.”