Neighbourhood Energy Utility Rate Review

Summary

• The City commissioned an independent consultant (Midgard Consulting) to conduct a comprehensive rate review of the False Creek Neighbourhood Energy Utility (NEU) — a City-owned low-carbon district energy system — 13 years after it began operation, and 8 years since the last full review.
• The NEU has nearly doubled in size since 2015, now serving 44 buildings, and its service area has expanded into Mount Pleasant, Northeast False Creek, and the False Creek Flats; total connected floor area is forecast to reach 1.9 million m² by 2040.
• Key recommended rate design updates include: establishing a separate 25-year deferral account for NEU expansion costs; using multi-year averages when benchmarking rates against BC Hydro; updating capacity levy calculations for new high-efficiency (zero-emissions) buildings to charge based on subscribed capacity rather than floor area.
• The review also recommends phasing out the past practice of disproportionately escalating variable energy charges as a conservation signal, in favour of evaluating other conservation measures.
• The NEU has faced cost pressures from natural gas price volatility, federal carbon taxes, capital cost escalations, and COVID-related revenue disruptions, though it remains within established rate-setting performance targets.
• These updates were endorsed by the independent Neighbourhood Energy Expert Panel and will guide annual NEU rate-setting going forward; by-law amendments are required to implement some changes.

Vote

Documents

• Report – Comprehensive Rate Review – Neighbourhood Energy Utility