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Delta school district stuck with energy deal

FAES notes it followed the calculations prescribed in a rate development agreement with the district to determine the new rate
delta bc canada school district
Using forecasting, FortisBC Alternative Energy Services Inc. has applied for a small increase of the cost of service rate per kilowatt-hour for its thermal energy service.

FortisBC Alternative Energy Services Inc. (FAES) has applied to BC Utilities Commission (BCUC) for a small increase to the annual cost of service rate for its thermal energy service to the Delta School District.

The forecast cost of service for the school district for 2021/22 is $1.119 million.

That will still be lower than originally expected, according to FAES.

In a 2019 decision handed down by the BCUC, the school district was ordered to pay FAES a more costly rate for the energy system that was originally intended to save the district money.

A utilities commission panel determined “it is just and reasonable” for FAES to recover the costs of providing service to the district.

Several years earlier, the district entered into a deal with FAES that saw the replacement of conventional natural gas boilers with new technology at 19 sites, including schools.

Fortis provided the district with a market rate rather than a cost of service rate that would have been higher.

However, in 2018 Fortis applied to the utilities commission to not only switch the school district to the higher rate, which was about $1 million more annually, but also get a back payment of almost $4 million.

A school district submission to the BCUC noted it would mean an increase to the school district’s budget of about $1 million a year for the next 15 years.

Someone familiar with the deal when it was devised told the Optimist the cost of service rate was expected to be lower than what Fortis later sought because more customers were expected to sign up to be part of the thermal energy initiative.

That interest never materialized, which left the school district on the hook to pay much more than anticipated.

When it approved the original deal, the utilities commission wrote that it was concerned about the cost risks the district was assuming.