NB Power finances suffered $65.7M hit in March from COVID-19

NB Power is reporting it lost $16 million in its latest fiscal year, a victim of the COVID-19  economic meltdown in March that ravaged its finances in a matter of days.

The utility had told the province to expect a $49.7-million profit for the fiscal year ending on March 31 — a figure New Brunswick Finance Minister Ernie Steeves used in his March 10 budget — but 21 days later, $65.7 million had evaporated and NB Power's accounts suddenly tumbled into the red.

"It was the instability of the financial markets in February and March 2020, largely as a result of the pandemic, that drove this reduction," said new NB Power president Keith Cronkhite in a statement in the utility's annual report released Friday.

Cronkhite was only named president on March 30, succeeding former president Gaëtan Thomas one day before the fiscal year ended.

NB Power chair Ed Barrett was philosophical about the unfortunate turn of events in his own statement. 

"It is remarkable that what we may remember most about 2019/20 are the events that surfaced just as NB Power's fiscal year was drawing to a close."  

It's the fifth year in a row NB Power has failed to meet its earnings target although the problem this time was financial, not operational.

NB Power has more than $700 million invested in funds to pay for the eventual decommissioning of the Point Lepreau nuclear generating station and management of spent nuclear fuel.  

The money is managed by Vestcor, the Fredericton investment entity that handles New Brunswick government employee pension funds, and a steep collapse in global financial markets that began in late February was behind most of NB Power's losses, according to the account in its annual report.

"The instability of the financial markets largely as a result of the global COVID-19 pandemic, led to a significant decrease in the gains on the investments year-over-year and was the primary driver of this unfavourable variance."  

No one from the utility was made available to speak about the financial results Friday, but the loss will have a significant impact on New Brunswick's own fiscal year financial results which will be reported later this summer.

The province had projected a $97.7-million budget surplus for the year ended March 31, 2020, but the setback at NB Power will spill onto its books and erase two thirds of that.  

A budget surplus the province had been projecting for 2021 has already been downgraded to a $343-million deficit.