How we set our rates.

Since we began operation at Silver Star Mountain, Silverhawk Utilities has always calculated our rates as if we were a regulated utility. While our rates are not regulated by the provincial government, we have always set our rates for sewer service, whether they are residential or commercial properties, using an industry standard methodology. The rate structure contains both fixed and volumetric components, and the balance of these components promotes equity among the utility. To help our customers better understand how our rates are determined we will provide an overview of our rate-setting process.

We begin with calculating all operating costs associated with the operation of the utility. Next, we calculate the total consumption for the “Service Year”, being January 1st to December 31st. Our annual billing is for services provided within the previous Service Year (billing in arrears). In this way, Silverhawk correlates its actual Service Year operating costs with the customers’ wastewater production during the same timeframe.

Silverhawk then allocates all operating costs into three functional categories to determine the revenue requirements that are to be funded by our rates.

Using this method we can determine the unit cost of service for each category. The unit costs are then applied to the units of service associated with each residential customer class or each commercial customer class to determine its share of the cost of service.  This rate-making framework is consistent with industry practices.

The SSPOA has referenced a report which included a national benchmarking initiative that compared multiple water and wastewater utilities throughout Canada. While we recognize that the sewer rates at SSMR are above the B.C. average, it is imperative that similar variables are compared.

ECOLOGICAL: SSMR is located within a highly sensitive eco- logical area and we need to take great care in ensuring that no harm is done to the environment. This requires a highly sophisticated treatment plant that results in effluent that is “crystal clear, with absolutely no smell” and is “classified as being permitted for use as irrigation for unrestricted public access”. 

POPULATION: The wildly fluctuating wastewater flows require our treatment plant to sufficiently handle the high demand and peak flow rates during the busy season. The municipalities and regional districts cited within the National Benchmarking Initiative referenced by the SSPOA all have a service population of greater than 50,000. SSMR has a very low permanent resident count; approximately 100 permanent residents, while Sun Peaks Resort has around 700 permanent residents according to their latest survey.

ECONOMY OF SCALE: Silverhawk does not have the advantage of “economy of scale” as most other utility operators (private or public) serving a population of greater than 50,000. All other utilities that the SSPOA are comparing us to are also operating at minimum one other service such as water, garbage, natural gas, etc., which invariably will reduce administrative costs and overhead.