N.B. Power's former president presided over successful financial year before firing

The surprise firing of N.B. Power president Keith Cronkhite earlier this month has become more perplexing with news he recently presided over the utility's best financial result in a decade.

According to financial statements submitted to the province last week and signed by Cronkhite in June, just 18 days before his termination, N.B. Power posted net earnings for the fiscal year ended in March of $80 million.

It's the highest profit at the utility since March 2012, and it beat the net income target set by N.B. Power's board of directors by $6.3 million. It's the first time N.B. Power has met or exceeded a profit target in seven years.

No one from the utility was immediately available to speak about the financial results on Wednesday, according to spokesperson Marc Belliveau.  

Cronkhite was fired suddenly on July 4, a little more than two years after being appointed N.B. Power's president. N.B. Power Board Chair Charles Firlotte said the utility needed "transformational change," and Cronkhite was not the one to make it happen.

"The board has concluded we must embark on a significant transformation of the organization," Firlotte said at the time in a statement.

Improved results under Cronkhite last year appear to be partly due to a surge in electricity sales, including a more than 50 per cent increase in export sales. There were also substantial gains made on company investments and other financial instruments N.B. Power holds to both balance the price of commodities it buys and to save for various generating station retirements.

According to the 63-page financial report, electricity sales, transmission revenues and other income streams jumped $364 million (19.8 per cent) over last year to a record $2.2 billion with operational expenses to support those sales rising $235 million. 

Part of the rise in revenue was fuelled by a 1.9 per cent rate increase N.B. Power began charging on March 31, 2021, but most was the result of rising demand for power both at home and outside the province as economies emerged from COVID-19 slowdowns.

Sales to business customers, including large industrial customers in New Brunswick were up 11.9 per cent over the previous year, with sales to residential consumers climbing 4.8 per cent. Sales to out-of-province customers totalled $558 million, a 51.6 per cent improvement over the previous year.

In at least one sour note, net debt at the utility climbed during the year by $9 million, but that was overwhelmed by a surprising $399 million increase in equity driven mostly by N.B. Power's substantial gains on investments.  

That more than doubled the level of equity in N.B. Power's capital structure from 6 per cent to 13 per cent in one year, a major move toward government requirements N.B. Power reach a more solvent equity level of 20 per cent  by 2027.

Belliveau said more detailed information on N.B. Power's financial year will be made available in two weeks with the release of the crown corporation's annual report.