Photo: Contributed

The impact of a B.C. Utilities Commission order regarding the allowable return on equity for small utilities like Nelson Hydro is still being investigated, says the city-owned utility’s general manager.

Scott Spencer said the order G-321-24 issued on Nov. 29 for the generic cost of capital stage 2 proceeding approved the allowable return on equity for all small utilities in B.C., including Nelson Hydro, retroactive to Jan. 1, 2024.

Nelson Hydro is still working to determine the impact on the 2024 rates collected and the 2025 rates applied for, Spencer explained.

“Nelson Hydro and the BCUC anticipated this decision, and retroactive rate changes will be captured in a revenue variance deferral account that will be amortized over the next five years, starting in 2026 in order to minimize the impact to ratepayers in a single year,” said Spencer.

The impact of the decision will be explained to council at their next meeting, currently scheduled for Friday, Dec. 6. As well, the bylaw for the rural rate increase of 7.54 per cent will be approved after it was delayed in its final reading and adoption on Tuesday night.

Higher than expected

FortisBC’s rate increase has gone above and beyond what Nelson Hydro was calculating earlier this year.

Last week the BCUC approved a FortisBC rate increase of 5.65 per cent effective Jan. 1 on an interim and recoverable basis subject to approval of the FortisBC 2025 to 2027 rate setting framework.

“This is different than the original increase of 5.30 per cent applied for that Nelson Hydro used in its rate calculations,” Spencer pointed out. “This change will also be captured in a variance deferral account amortized over five years and be included in the rate calculations for 2026 and beyond.”