Utilities unlikely to face new fee

West Kelowna councillors cool to idea of new tax on FortisBC Gas, BC Hydro

It might bolster city revenues, but there appears to be little support among West Kelowna councillors for new taxes on utility companies.

If a so-called franchise fee is applied to gas and electrical providers, those companies would just pass the cost on to their customers, several councillors say.

“I see this as nothing less than a hidden tax grab,” says Coun. Rick de Jong. “If we start charging these fees, our residents are going to be paying them.”

Coun. Doug Findlater also criticized the franchise fee proposal, to be discussed in more detail during 2019 city budget deliberations in mid-January.

“It’s not transparent. It’s back door,” Findlater said of the proposed tax.

West Kelowna is the only municipality in B.C. that doesn’t have a natural gas fee. It’s a levy charged to the gas company for the right to bury utility lines under municipal roads and rights-of-way.

In West Kelowna’s case, city administrator Jim Zaffino has estimated charging a franchise fee to FortisBC Gas would net the municipality an extra $450,000 annually. Zaffino suggests the fee is fair because the gas company already pays artificially low taxes and currently doesn’t pay anything for the use of municipal property.

“They’ll pass the cost on to the user, yes, but they’re using city property to earn their revenue,” Zaffino says.

Zaffino has also raised the idea of a similar franchise fee on BC Hydro, which the utility would likely recoup in a similar fashion by charging its customers more for their electrical consumption.

A majority of council voted down the idea of a gas franchise fee last June. But several incumbent councillors were defeated in the Oct. 20 election, and the idea will be put to the new council again in January.

At the most recent council meeting, none of the newcomers indicated whether they’ll support or oppose the gas franchise fee. Council has heard the fee would likely cost the average West Kelowna homeowner about $60 more on their annual gas bills.