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Latest LEC News & Updates


LEC 2016 Financial Statements

July 25, 2017

At the July 17, 2017 Council meeting, the City received LEC’s Financial Statements as part of LEC’s Annual General Meeting process. LEC publishes its Financial Statements and they are now available to view here.

 

City Approves Application Fee Adjustment

City Council adopts City Bylaw 8545 which modifies the application fee charged to applicants. As of March 6, 2017, the application fee will be charged at an amount equal to 0.15% of the construction value of the work associated with the building permit. The fee will be due and payable at the time of building permit issuance.


LEC to Adjust its Rates

LEC has received authorization from its regulator, the City of North Vancouver, to adjust its rates effective November 1, 2016. The open letter to LEC customers provides more details. It was sent in late-August to all LEC customers. A Public Meeting to discuss LEC's application was held on October 3, 2016 in the Council Chamber, City Hall, 141 West 14th Street, North Vancouver, BC. Members of the public were provided the opportunity to comment at that time. The meeting presentation and discussion are available at the following links.


Commodity Charge Update

Effective: January 1, 2017

By bylaw, LEC's regulator, the City of North Vancouver, authorizes LEC management to make adjustments to the Commodity Charge to reflect market pricing fluctuations. The Commodity Charge is adjusted to follow the purchase price of 1,000 GJ/month of gas under FortisBC's Rate Schedule 3. With the January 1, 2017 change in Fortis’ rate schedule, the Commodity Charge for Rate 1 is to increase to $0.03945 per kilowatt hour, and Rate 2 is increase to $0.03334 per kilowatt hour. Click on the link below to access a table, which calculates how this adjustment affects LEC's Commodity Charge.

Current Commodity Charge Adjustment (January 1, 2017)
Historical Commodity Charge Rate (July 1 2006 - October 31 2016)


Application for 2016 Rate Adjustment

LEC has applied to its regulator, the City of North Vancouver, for permission to adjust its rates in the fall of 2016. 

LEC’s rate structure includes three components:

  1. The Meter Charge, which is constant from month to month and similar for each customer, currently at $150 per month, per service connection.

  2. The Capacity Charge, which is constant from month to month, but different for each customer. Basically, the charge is for ensuring that LEC’s generating capacity is sufficient to meet LEC’s system capacity requirement. The monthly charge is currently set at $3.231 per kilowatt multiplied by the energy capacity nominated by a customer.
  3. The Commodity Charge, which varies from month to month and is based on the amount of energy consumed. This charge essentially covers the cost of the energy purchased by LEC to provide heat to the buildings. The total charge is based on the amount of heat consumed in a month and the unit cost is adjusted in line with FortisBC gas price fluctuations. The charge currently stands at $0.02747 / kW.h.

More information with regard to these charges is available under the heading “How Rates Are Calculated”.

The application aims to implement a two rate system that will provide more flexibility to customers based on annual energy consumption.  Customers choosing Rate Schedule 1 will pay a lower monthly Meter Charge but a higher Commodity Charge.  Customers choosing Rate Schedule 2 will pay a higher monthly Meter Charge but a lower Commodity Charge.  The Capacity Charge will be same for both Rate Schedule 1 and Rate Schedule 2. However, the proposed rate adjustment contemplates increasing the Capacity Charge to $3.5541 per kW.  Both rates are summarized as follows:

Rate Schedule 1 
(recommended for consumption of approximately 300 MWh per year or less)

  • Meter Charge $30 per month
  • Capacity Charge $3.5541 per kW
  • Commodity Charge $0.03398 per kW.h

Rate Schedule 2 
(recommended for consumption exceeding approximately 300 MWh per year)

  • Meter Charge $161.55 per month
  • Capacity Charge $3.5541 per kW
  • Commodity Charge $0.02871 per kW.h

The application also recommends changing the Late Payment Charge to 1.5% per month, and increasing the Service Connection Fee to $75 per kilowatt of nominated energy capacity.  

Assuming constant natural gas prices, the net increase is estimated at 7.0% of the total amount invoiced to an average customer.

While the increase exceeds the rate of inflation, the following factors should be considered:

  • The Capacity Charge remained constant since LEC started operations in 2003 through 2013.  The last increase was on July 1, 2014, more than two years ago.

  • The Meter Charge has never been increased since LEC’s start of operations in 2003. 

  • The Commodity Charge was last set at $0.0458 / kW.h in 2007 to follow natural gas prices fluctuations. Due to market pricing decrease of the price of natural gas, it currently is at a record low level of $0.02747 / kW.h; a 40.0% decrease.

  • As shown in the attached report, LEC’s average cost is currently the lowest of comparable Lower Mainland district energy providers. It is also lower than the cost of using stand-alone in-building boilers or electric baseboards.

Click here for the attached Report to Council, which provides additional information.  The recommendation contained in the report was adopted by the Council of the City of North Vancouver at its regular Council meeting of July 25, 2016.

Any member of the public may forward comments to LEC’s regulator, the City of North Vancouver, as per the following:

  1. Written submissions referring to “LEC Rate Adjustment” may be forwarded prior to 4:00 p.m. on October 3, 2016, attention of the City Clerk, City of North Vancouver, 141 West 14th Street, North Vancouver, BC, V7M 1H9, fax 604.985.9417, email: kgraham@cnv.org

  2. In person, at the Public Meeting to be held at 6:30 p.m. on October 3, 2016, in the Council Chamber, City Hall, 141 West 14th Street, North Vancouver, BC. 



LEC Financial Statements

June 10, 2016

At the May 30th Council meeting, the City received LEC’s Financial Statements as part of LEC’s Annual General Meeting process. LEC has published its Financial Statements and they are now available to view here.



Expansion in Moodyville given the green light

April 7, 2016

LEC is pleased to report that it will be extending its thermal energy services within the City of North Vancouver.

In April 2016, City Council approved a $2.3 million expansion of the LEC network between Lower Lonsdale and the Moodyville area. This means, once the area is redeveloped; more City residents will be connected to the LEC district energy system and will receive sustainable, thermal energy to meet all their needs.

Proposed Passive Houses in the Moodyville area also received a boost, as Council supported the suggestion that they should be connected to the LEC network. The energy provided from LEC would be used for mainly for domestic hot water purposes, as Passive Houses do not require extensive infrastructure for space heating.

Council also agreed to a $600,000 loan to facilitate the construction of the distribution system between 1033 St. George’s Avenue and 160 East 6th Street (formally 161 East Keith Road). The extension will be the first phase in linking LEC’s Lower and Central Lonsdale service areas together for the purpose of enhancing system redundancy to customers including the Lions Gate Hospital.


Disclosure of the Corix Settlement    

January 28, 2016

LEC is pleased to report that since January 1, 2014 it has assumed full responsibility for the development and operations of the district energy system operating throughout LEC’s service areas.  Background information on LEC’s incorporation, the inception of the district energy service and LEC’s early years of operations can be accessed here.

Between March 3, 2004 and December 31, 2013, LEC was under contract with Corix Utilities Inc. (Corix), formerly Terasen Utility Services (“Agreement”).  The Agreement covered the design, procurement, construction, financing and operation of boilers, central control system and energy meters in the Lower Lonsdale service area, as well as certain other LEC customer services, such as billing.

Following expiry of the Agreement, and after failed negotiations between the parties, Corix commenced arbitration proceedings in the fall of 2014 to determine the final purchase price for certain assets delivered under the Agreement. The arbitrator rendered a partial award on June 30, 2015 and a final award on September 21, 2015. Loan approvals were requested by LEC in 2015 to satisfy its financial obligations pursuant to the arbitral awards. Since the issuance of the arbitral awards, LEC has paid an amount totalling $2,526,188.39 in full satisfaction of all obligations to Corix remaining under the Agreement.

The Agreement contains a confidentiality clause that does not expire until after December 31, 2018.  As a public utility wholly owned by the City of North Vancouver, LEC is guided by the public interest principles of transparency and accountability.  In line with those principles, in November 2015 LEC sought the early removal of the confidentiality clause so that further information and documentation could be made public.  Corix refused this request.  A copy of Corix’s letter is available at here. As a result, while LEC would prefer that all information connected to the Agreement and subject to the confidentiality provisions be publicly available without further delay, LEC remains bound by the confidentiality provisions contained in the Agreement.

LEC looks forward to the expiry of the confidentiality provision after December 31, 2018, after which LEC will make all information of public interest concerning the Agreement, Corix and the district energy system, available through the City of North Vancouver and LEC websites.
 

Another Accolade for the City of North Vancouvers Lonsdale Energy Corporation

The Lonsdale Energy Corporation has received a prestigious Business Excellence Award from the North Vancouver Chamber of Commerce. The Chamber has recognized LEC in the area of 'innovation' for its creative approach to business growth, success in unique business methods and reaching new markets. The award was presented at the North Vancouver Chamber of Commerce 17th annual Business Excellence Awards event.


LEC Receives $12m Capital Investment From The City

In December 2013, the City of North Vancouver provided a capital investment of $12million in the form of a loan. With the exception of $500,000 which may be used for working capital, the amount is to cover a portion of the construction cost of the distribution system. LEC has met all of its financial obligations concerning the construction of the plants and customer heat delivery stations as well as the construction of the distribution system prior to 2009. Only the distribution system built by the City on behalf of LEC since 2009 is covered by this loan. In addition to reimbursing the amount, LEC will be paying to the City interest at a rate of 2.1%. LEC will also be providing an annual report on the balance and payments of principal and interest of the loan, as well as on construction activities impacting borrowing and loan repayment.

The information provided to Council and Council’s discussion is available at the following links.


LEC to Increase its Capacity Charge

LEC has received authorization from its regulator, the City of North Vancouver, to increase its Capacity Charge by 5% effective October 1, 2013 and 5% effective July 1, 2014. The Meter Charge and Commodity Charge are to remain unchanged. The attached open letter to LEC customers provides more details. It was sent in mid-August to all LEC customers. A Public Meeting to discuss LEC's application was held on September 23, 2013 in the Council Chamber, City Hall, 141 West 14th Street, North Vancouver, BC. Members of the public were provided the opportunity to comment at that time. The meeting presentation and discussion are available at the following links.


LEC and CNV Continue Working at Reducing the Impact of the PST on District Energy Systems

Mayor Darrell Mussatto met with Honorable Michael de Jong, Minister of Finance on September 18, 2013 to discuss the impact of the PST on district energy systems. LEC continues its work so that district energy providers compete on a level playing field. A copy of the briefing note that was provided to Minister de Jong at the meeting is available here. Also present at the meeting were: Hon. Naomi Yamamoto, Minister of State for Tourism and Small Business and MLA of North Vancouver-Lonsdale; MLA Ralph Sultan, MLA of West Vancouver-Capilano; Peter Milburn, Deputy Minister of Finance and Secretary to Treasury Board; and Ben Themens, Director LEC.


Marine Harbourside Expansion

LEC is currently expanding the district energy system to the Marine Harbourside Area. A new miniplant has been built at the new City of North Vancouver Works Yard at the corner of West Ist Street and Fell Avenue, and the district energy system piping has been installed along Fell Avenue to serve new buildings on Marine Drive, West 3rd Street, Copping Street, the new Works Yard building and Greenhouse, and the new North Shore Rescue Building.


Climate and Energy Action Award

The City of North Vancouver won the Public Sector Collaboration category for the Lonsdale Energy Corporation and School District 44 Education Service Centre/Arts for Kids project, which showcases a geothermal heat pump system and recycling of surplus heat. By saving energy and reducing greenhouse gases, the project allows more of SD 44s budget to be directed towards its education mission, while allowing LEC to integrate heat recovery and geo-exchange systems into its district energy system.

The awards are organized annually by the Community Energy Association in partnership with the Province of British Columbia, Union of B.C. Municipalities, B.C. Hydro and FortisBC.


Bylaw 8086

Bylaw 8086 eliminates the three distinct Lonsdale Energy Corporation service areas and expands the service area to the whole City. As such, any new building of more than 1,000 square meters is required to connect to the district heating system for heating purposes unless it is determined by the City's Director of Finance that the cost to the City would be excessive. Bylaw 8086 also allows LEC to provide cooling services in buildings planning to be equipped with air conditioning systems. Depending on the size and nature of the system, LEC may be able to use the heat generated during the cooling process in its heating network. Connection of properties to LEC's cooling system is optional.

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