HST Savings for LEC Customers

The Provincial Government's Harmonized Sales Tax (HST) took effect on July 1, 2010. As an LEC customer, you can benefit from new savings on your energy costs.

The implementation of the HST is expected to help current and future LEC customers realize savings of approximately 4-5%. This estimate was determined by comparing charges under HST rules and charges under the previous Provincial Sales Tax (PST).

Source of New Savings
LEC's Commodity Charge is regularly adjusted to follow the price of purchasing 1,000 GJ/month under Terasen Gas' Rate Schedule 3. Under the HST, LEC is able to recover an Input Tax Credit equivalent to the amount of tax paid at the time of purchase. As of July 1, 2010, LEC adjusted its Commodity Charge to remove the PST/HST from the calculation of the Commodity Charge.

Another portion of the savings is reflected in future Capacity Charge adjustments. With the HST taking effect on July 1, 2010, LEC is able to claim an Input Tax Credit on its equipment and material purchases. The savings realized will be passed to all LEC customers over the long-term as future system expansions will be completed at a lower cost than they would have been under the previous PST.

The new HST provides a level playing field to district energy providers like LEC. Under the previous PST, customers paid additional PST on energy purchases. Now, LEC customers can receive the full benefits of efficient locally-produced green energy.

Additional Savings
In addition to the above-mentioned savings, residential customers will continue to receive a point-of-sale HST rebate on heat purchases, similar to the previous PST exemption for residential energy.

Effect of the BC Carbon Tax
Please note that the decrease in LEC's Commodity Charge will be somewhat offset by an increase of the BC Carbon Tax, which also took effect on July 1, 2010. However, this increase is in line with increases that impact all energy consumers in BC.

Furthermore, LEC recently introduced solar energy to its system and will continue to review available green technologies to reduce the use of non-renewable (i.e. carbon-taxed) energy. Because the LEC system is designed to use a variety of fuels, LEC's corporate strategy is to transition to using zero emissions energy sources as soon as it becomes economical to do so.

For more HST-related details, including background information leading up to this announcement, click on one of the documents provided below or watch the following video feature.