The ice storm's hidden hit — financial blow to NB Power's books

The physical damage from last week's ice storm is plain to see on the ground all over northeastern New Brunswick, but the financial damage it has wrought on NB Power, although likely significant, is so far mostly hidden.

"At no point have we discussed cost," said Premier Brian Gallant Monday when asked about who is paying what for the massive week-long re-electrification effort that is still underway.

"There's no doubt that we are going to speak at one point about how we're going to make sure we have all of this paid for. This will all come in due time."

NB Power doesn't budget for severe weather events.- Angela Leaman, NB Power director of financial planning

For NB Power, the costs of big storms can be considerable — $20 million or more — a burden that could be especially hard to bear this year given its recent financial struggles.

The utility does not budget for weather disasters and carries no insurance against their occurrence, meaning ice storm costs — whatever they are — will hit this year's bottom line with a thud.

"NB Power doesn't budget for severe weather events," NB Power's director of financial planning Angela Leaman explained to the Energy and Utilities Board in 2015, in a discussion around the unexpected costs caused by monster storms.

Arthur cost $23M

In 2014 NB Power had budgeted $3 million for the year to deal with weather-related power failures but damage and extended outages from post-tropical storm Arthur that year cost a record $23 million.

The biggest expense, $16.7 million, was for more than 200 outside crews to help restore power during 13 days of outages and for cleanup which took months longer.

NB Power's financial vice president Darren Murphy, appearing with Leaman, said because there was no way to anticipate record storms, the utility does not try to budget for them.

"A good example of that would be an Arthur event," said Murphy.  "We wouldn't put in our revenue requirement something of that magnitude on a recurring basis."

• Storm Arthur's cost for NB Power estimated at $23M
• Brian Gallant sees 'a few days' without power for some as storm cleanup continues

Ice storm vs Arthur

So far the ice storm appears to be an event of at least of the same magnitude, if not larger, than Arthur.

According to NB Power more than 200,000 customers lost power at some point during the ice storm, at least 5,000 more than those affected by Arthur. And full restoration of all customers is expected to take the same amount of time — around 13 days — although 380 crews are now on the ground working on the problem, 30 more than at the height of  Arthur repairs.

"It has been more difficult than we thought," said NB Power president Gaëtan Thomas on Monday, vowing to push through all the problems.

"We are going to reconnect everyone.  We are not going to forget anyone."

The cost of doing so will be significant for the utility and comes at a time when NB Power has already been missing its financial targets by wide margins.

Last year's profit, which was originally budgeted to come in at $91 million, instead ended the year at $11 million, the worst result in six years. This year another $90 million profit was budgeted but then downgraded to $45 million mid-year following a variety of problems. The ice storm occurred after that downgrade.

Gallant says costs will eventually be totalled, but not until the event is over.