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How Rates are Set
The City of Nelson Mayor and Council approve rates for the Nelson Hydro Urban Service Area and provide overall governance to the utility as a whole. Urban means areas within the City of Nelson. The British Columbia Utilities Commission (BCUC) approves rates and rate-setting principles for the Nelson Hydro Rural Service Areas. Rural means areas outside of the municipal boundary and within the Regional District of Central Kootenay.
All utilities whose jurisdictions fall under the BCUC are required to have an approved Cost of Service Analysis (COSA) to set electric rates. In Nelson Hydro’s case, this is the rural portion of the service territory only.
On November 27, 2020, Nelson Hydro submitted the 2019 Cost of Service Analysis to the BCUC. The review looked at the hydro rates and services in detail and recommended an adjustment to rural rates in order to cover the additional costs incurred to provide service to these areas. Based on the 2019 data, Nelson Hydro collects less from rural customers than it costs to service rural areas. On July 19, 2022, BCUC issued a Decision and Order approving the 2019 COSA subject to a number of modifications.
Annual Process
BCUC requires utilities under their jurisdiction to apply annually for their rates for the upcoming year. This is called a Revenue Requirements Application (RRA). Nelson Hydro submits the upcoming year's Revenue Requirements Application for rural customers based on the approved principles of the 2019 COSA in the fall of each year. Interim approval from BCUC is expected by the end of each year, in the year the application is made, to be effective January 1st of the next year. Final approval from BCUC will occur sometime later in that same year.
Going forward, the approved 2019 COSA will inform the annual Revenue Requirement Applications submitted to support the strategic and operational objectives of Nelson Hydro each year until a new COSA is approved by the BCUC. Cost of Service Analyses are typically reviewed every 10 years or sooner when the costs of operating are not met by the revenue received from electric rates.
Rates FAQ
Nelson Hydro is a caring utility that empathizes with our customers' concern over rising rates because we are customers too.
We review our costs annually to ensure that i) customers are receiving value for service, ii) the utility can provide a safe and reliable electric service in compliance with provincial and federal regulations, and iii) the utility provides an equitable return on investment back to the City of Nelson.
Click the questions below to reveal the answer.
BCUC is an independent agency of the Government of British Columbia to ensure utility rates are fair, just and reasonable for both the utility and ratepayers, and there is transparency across the province.
The drivers of the 2026 rate increase are:
- Urban rates in the City of Nelson are proposed to increase by 7.83%. This is driven by an increase of 4.60% on operating costs and an increase of 3.23% on capital reserve contributions.
- Rural rates in the surrounding area are proposed to increase by 15.98%. This is driven by an increase of 5.93% on operating costs, and increase of 5.57% due to deferral accounts, and 4.48% in the cost of capital.
The drivers of the 2027 rate increase are:
- Urban rates in the City of Nelson are proposed to increase by 2.89% from operating costs.
- Rural rates in the surrounding area are proposed to increase by 3.77% from operating costs.
For more information please visit: https://letstalk.nelson.ca/2026-2027-electrical-rates
Yes, on an interim basis while BCUC reviews the Nelson Hydro rate application. A final decision will be made in 2026 by BCUC.
Rural areas have less customers over a larger geographic area, which means:
➡️ More kilometres of power line per customer,
➡️ More equipment to maintain across remote terrain,
➡️ Longer distances for crews to travel, and
➡️ More trees and vegetation to manage
Providing service to rural customers in our area requires an immense amount of vegetation management to keep the power on. Nelson Hydro has spent approximately $5.8 million on vegetation management in the rural areas since 2017. Thanks to this program, tree-related outages have decreased by 72%* in the rural areas.
*Note: The biggest year for outages from tree contacts occurred in 2018 with 5,767,927 customer minutes compared with that of 1,627,345 customer minutes from January 1 to September 30 2025. Customer minutes are calculated by multiplying the number of customers affected by the number of minutes without power.
Reducing your energy load during peak power times is beneficial to everyone and can actually save you money by reducing our peak demand charges. Try to save your dishes, laundry, EV charging until the later evening, overnight, or early morning.
What is a peak demand charge? A peak demand charge is calculated through the wholesale power purchase agreement Nelson Hydro has with FortisBC. Peak demand charges occur when a new high or maximum demand of energy has been hit by Nelson Hydro customers. This typically occurs from 5-7pm during cold winter months. When the maximum or peak is set, the power agreement calculates electricity charges at that level for 11 months. So the less our customers use, the less money we pay to FortisBC, and the less we have to pass along those fees back to our customers.
Take steps to make your home more energy efficient. Reducing your power bill doesn't always require major investments. Here are some inexpensive ways to save energy and lower your electricity costs:
- Unplug Electronics: Many electronics consume energy even when turned off. Unplug chargers, appliances, and electronic devices when not in use to eliminate "phantom" or standby power consumption. Use power strips to easily turn off multiple devices at once. This is especially useful for electronics that continue to draw power when in standby mode.
- Energy-Efficient Lighting: Replace incandescent bulbs with energy-efficient options like LED or CFL bulbs. They use less energy and last longer.
- Seal Leaks: Ensure that doors and windows are properly sealed to prevent drafts. Use weather stripping or draft stoppers to seal gaps, keeping warm or cool air inside.
- Adjust Thermostat Settings: Lower your thermostat in the winter and raise it in the summer. Wear appropriate clothing and use blankets to stay comfortable. Consider installing a programmable thermostat to automatically adjust temperatures when you're not at home.
- Regular HVAC Maintenance: Keep your heating, ventilation, and air conditioning (HVAC) system well-maintained. Clean or replace air filters regularly and schedule professional maintenance to ensure optimal efficiency.
- Use Fans: Ceiling fans and portable fans can help circulate air, making you feel cooler in the summer and allowing you to lower your thermostat.
- Energy-Efficient Appliances: When purchasing new appliances, look for the Energy Star label, which indicates energy efficiency. Over time, energy-efficient appliances can save you money on your power bill.
- Limit Hot Water Usage: Lower your water heater's temperature and fix any leaks promptly. Consider using cold water for laundry and taking shorter showers.
- Cook Efficiently: Use small appliances like microwaves or toaster ovens for cooking small meals. Match the size of your cookware to the size of the burner on the stove.
- Natural Lighting: Take advantage of natural light during the day to reduce the need for artificial lighting.
- Educate Household Members: Encourage everyone in your household to be mindful of energy usage. Simple habits, like turning off lights and appliances when not needed, can make a difference.
For home upgrades like improving insulation or replacing old windows, help is available through a variety of provincial and federal energy-saving grants and programs. All RDCK and City of Nelson residents are eligible for energy rebates through FortisBC and they are welcome to register for the Regional Energy Efficiency Program (formerly EcoSave) for more information and support. To learn more, please visit: www.nelsonhydro.ca/ecosave
Water that flows down the Kootenay River is 100% allocated by the BC Controller of Water Rights to BCHydro, FortisBC and Nelson Hydro. Nelson Hydro has been granted 2,963cfs of the 46,023cfs of the hydrogeneration output of the Kootenay River. There is no option to increase our water license. We generate electricity to the maximum amount permitted within our water licence, and then the remainder of the electricity is purchased from FortisBC.