Effort to break even on utilities prompts change in Peace River

Emily Plihal
South Peace News

Town of Peace River council has had to make changes to its utility rate structure as part of the 2022 fiscal year budget to ensure it is recouping costs to maintain current infrastructure.
The new rate structure, rollout effective July 16, 2022, is based on a full recovery model, like what other utility companies utilize to ensure all costs associated with operation are recouped. With the previous model, residents in town who were using very little water were not contributing to infrastructure costs of maintaining the system to deliver water or collect wastewater from their residence or business.
“Prior to the rate change the water and wastewater utility did not operate on a full cost recovery basis with subsidization from the general tax revenue, says Mayor Elaine Manzer.
“The town has been moving to a full cost recovery model, but under the previous system that was not achievable. The Town of Peace River has water treatment and distribution costs significantly above the provincial averages for a comparable sized municipality, yet historically charged very little for the utility service.”
Peace River is unique because the valley’s topography creates expensive challenges to provide service to residents and businesses in the various areas of the town. The new rate structure is not a for profit model, it is simply being adopted to ensure all costs are fully recovered from individuals using the system.
“The physical layout of the town along both sides of a river, and the varying heights of neighbourhoods means that either drinking water is pumped up to a higher elevation or wastewater is pumped up from a lower elevation,” says Manzer. “This is a costly arrangement. Also, with the town subdivisions being fairly spread out we maintain more infrastructure compared to similar communities.”
Manzer explains administration works hard to ensure timely replacement for infrastructure, collecting funds to pay for infrastructure costs through water bills will help to ensure capital projects are not sitting on the back burner.
Because of the valley, the Class 3 Water Treatment Plant is more complex than most plants required to serve communities Peace River’s size. The plant currently provides service to the counties of Northern Sunrise, Northern Lights, and M.D. of Peace. It also provides water to Dixonville and the Shaftesbury Water Co-op.
To ensure fair rate structures, administration looked at the overall usage of water and wastewater facilities to ensure all users pay an equal amount based on amount used. Residential use accounted for 46 per cent of the use, small commercial 21 per cent, large commercial 19 per cent, while all others accounted for the remaining use.
“The goal is to be more transparent in how the service rate is determined. Customers outside of the town are not charged for wastewater collection and storm sewer collection compared to intown residents and businesses,” says Manzer.
“The water M.D. Co-op, the Peace Regional Correction Centre and the County of Northern Lights are only charged for the amount of water they consume, and an appropriate amount of fixed costs required to deliver water to the point of custody transfer,” she adds.
The full cost recovery model will be phased in over the next two years, with some changes already implemented in July 2022. Structure of water bills will be changing, with cost of water per
cubic metre going down from $6.60 to $5.31, residents will notice this on the Variable Utility Charge on their bill. A Fixed Utility Charge will be added to all residential accounts of $57.63, commercial users will also notice a similar addition to their bills.
“For some time now, the utility revenues have been considerably below the cost incurred by the town,” says Manzer.
“Logically, if the town is selling a service below cost, it then needs to cover that shortfall via other revenues,” she explains. “In this case, via property taxes. One goal of this cost recovery model is to reduce the water department’s dependency upon property taxes.”
Garbage and recycling charges have increased to $19 from $17 based on contractor fees that Peace River Waste Management Company((PRWMC) charges, and landfill tipping fees. As a result of a shortfall from PRWMC, utility bills will also have a $29 PRWMC levy added for six months to account for the town’s share. It was a result of decreased industrial tipping fees over the last few years.
For more information on the utility changes and to view rates for commercial properties, potable water, and sanitary sewage dumping charges, please go to peaceriver.ca/corporate-services/budget.
“I foresee continued increases in the years ahead as we are living in one of the greatest inflationary periods in a generation,” says Manzer.
“This is consistent with most every service or product that residents consume in Peace River,” she adds. “The town is a major purchaser of infrastructure and is subject to the inflation reality that every consumer is also subject to.”
If residents would like to write a letter to council expressing thoughts, concerns or to give feedback regarding the rate changes, please email to Tanya Bell, director of community services and interim CAO at tbell@peaceriver.ca.

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