EUB approves 9.8% interim rate increase for N.B. Power's residential customers
Sam Farley | CBC News | Posted: March 15, 2024 7:13 PM | Last Updated: March 15
Utility says increase on April 1 necessary because of debt, 'unexpected events'
N.B. Power residential customers will be seeing a 9.8 per cent interim rate increase on April 1, the public utility announced Friday afternoon.
"We will be communicating with all customers before the new rates take effect this spring to help them understand any changes to their bills," the utility said on X.
The average increase for all rate classes on April 1 is 9.25 per cent, while residential customers will increase by 9.8 per cent.
Approval of N.B. Power's request for the increase was delivered orally by the Energy and Utilities Board, whose lawyer had questioned the need for the rate increase at a hearing in early March.
"We understand that raising rates is not something anyone wants, particularly when customers are already facing the rising cost of basic necessities," N.B. Power CEO Lori Clark said in an email statement to CBC News on Friday afternoon.
She went on to say the increase is necessary to provide customers with reliable power "during this time of unprecedented challenges and volatility."
N.B. Power applied for the increase 10 weeks past the deadline, which the EUB blamed on the province. N.B. Power's original rate increase proposal was 12 per cent, but at the last minute the province moved back a debt reduction target for N.B. Power from 2027 to 2029.
This allowed N.B. Power to reduce the increase it was asking for, but made the utility miss the deadline to file.
At the time the EUB estimated the process would delay the new rate from going into effect until July 1, which is why N.B. Power is implementing an "interim" rate increase for now.
Clark acknowledged missing the deadline to file a rate increase request with the EUB, but she said moving back the timeline for paying off debt — to 2029 — allowed the lower 9.8 per cent increase.
"We made the decision to apply for interim rates for April 1st to avoid a revenue shortfall which would eventually be passed on to the customer as we are a cost-of-service utility," Clark said.
Lepreau breakdown a factor
The increased rates are to tackle debt and address what N.B. Power calls unexpected events in recent years, including a breakdown of the Point Lepreau nuclear generating station in winter 2022.
"The requested increases are necessary to allow N.B. Power to fulfil its core responsibility, and to make modest improvements in its financial health," N.B. Power wrote in its application for the rate hike.
N.B. Power spokesperson Dominique Couture said there is an additional EUB hearing next week about an unrelated four per cent variance cost increase to power bills as well.
Couture said in an email that the next step for N.B. Power is to review the decision and adjust rate schedules and policies manual for EUB approval. After approval, new rates will take effect, likely on April 1.
"We respect the ruling of the EUB and their commitment to ensuring New Brunswickers pay a fair rate for their electricity," Couture said.
Final decision expected July 1
Due to the late filing, a final EUB decision is not expected until July 1, Couture said.
"Today's decision allows us to implement the new rate until a final decision is made by the independent regulator. If the EUB decides on a lower rate in its final decision, we will adjust bills accordingly," Couture said.
A spokesperson from the New Brunswick government acknowledged a request for comment Friday afternoon, but did not provide a statement by the end of the day.
Green Party Leader David Coon said the increase for New Brunswickers would be hard "for those who are living cheque to cheque or not even keeping their head above water, any extra costs are going to be problematic, no question about it."
Coon also called it "wholly inappropriate" for the EUB to approve an interim rate hike before full hearings to hear why the hike is needed.
"I'm quite shocked that the Energy and Utilities Board would grant this rate increase without reviewing the evidence to justify the increase," Coon said.
New Brunswick's Liberal energy critic did not respond to a request for comment by Friday evening.
Corrections:- A previous version of this story said the interim rate hike would increase by 9.5%, but was later clarified by N.B. Power to be a 9.8% increase for residential customers and an average of 9.25% increase for all rate classes. March 15, 2024 9:25 PM