NB Power's bid to hide financial details met with opposition from EUB

NB Power's bid to hide significant details of its finances, including projected profit and debt levels for the next 10 years, as part of an effort to keep the value of an insurance settlement secret, ran into opposition at its rate hearing Friday.

"Those documents are heavily redacted," said Energy and Utilities Board vice chairman Francois Beaulieu about evidence attached to a new rate proposal being made by the NB Power that also withholds critical information about the utility's true financial condition.    

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"I think the parties should have a discussion about this issue and if there's anything that should be unredacted,"  said Beaulieu about the hidden financial information.

"The board would like to hear submissions from every party regarding what I'm raising."

The new rate submission includes lowering increases for customers by about $7 million — from an average of two per cent to 1.5 percent — so they can benefit from an insurance windfall NB Power was paid last month that has lowered its debt and interest costs. 

Redacted

The settlement is the result of a six-year legal fight with insurance companies to recover part of the $1 billion in cost overruns suffered by NB Power during the Point Lepreau nuclear generating station refurbishment.

But as a tradeoff for sharing the benefits of the settlement, the utility wants to bar the public from seeing how the new money has affected its financial condition, including debt and profit projections for the next decade.  

It argues that is critical to keeping the total settlement amount secret as it pursues another claim against the refurbishment contractor, Atomic Energy of Canada Ltd (AECL)

"The rationale behind all of the redactions is that the information that is redacted combined with information that is unredacted would enable a third party to calculate with reasonable accuracy the amount of the settlement," said NB Power lawyer John Furey 

'We can't even see the bottom line'

Chris Rouse, a self-represented intervener in the hearing complained on Twitter that the secrecy placed on debt levels and profit targets, to help hide the size of the insurance settlement, was robbing the public of critical financial information about the power company.  

"Not sure why we are even having a rate hearing to determine just and reasonable rates when we can't even see the bottom line," he wrote.

Later in the hearing room Rouse made his point directly to the EUB and expressed regret the hearing had agreed to NB Power's request to keep the insurance settlement secret without an understanding of how that would drag other information into the dark.

"It's really difficult to partake in a rate hearing not knowing what net earnings are," said Rouse.

"If I had known that was at stake with the confidentiality agreement I probably would have argued that a lot differently.  Lesson learned."

NB Power to provide explanation privately 

Following a two-hour private meeting among hearing participants to sort out problems, Furey acknowledged to the board there was concern among some about the extent of the financial information NB Power is proposing to withhold about itself.

He said early next week the utility will explain privately in detail to public intervenor Heather Black and EUB staff, including its lawyer Ellen Desmond,  why the information being withheld should remain secret.  

He said if either one does not accept the explanation, the issue can be battled out in front of the board itself.

"If we're unable to demonstrate that to them I would expect they would bring forward some form of objection to the board."