NB Power faces poorest first quarter in 3 years

Weak hydro production, problems at the Point Lepreau nuclear station and sagging export sales drove net income at NB Power down to $4 million in the critical months of April, May and June this year — the utility's poorest first quarter in three years.  

Seemingly unmoved by the weak result, New Brunswick's Liberal party is sticking by its election pledge to freeze rates the utility can charge residential and some commercial and municipal customers for the next four years.

"We believe that consumers deserve a break through a power rate freeze. We also believe that the utility can do better with expenditures and revenues to pay for that rate freeze," said party spokesman Jonathan Tower in an email to CBC News Tuesday.

Last year, NB Power made 100 per cent of its profit — $23 million — in the first quarter and earned nothing for the remaining nine months. It is hoping to earn $62.3 million this year.

Export sales down

Springtime is usually one of the most lucrative periods of the year for NB Power, because of substantial water flows through its network of river dams. However, this year was a financial washout with annual flood waters proving too fierce to be harnessed.

"Although the province experienced unprecedented spring flooding, the spring runoff started later than usual with high flows over a shorter period of time resulting in lower power production," said a report released by NB Power explaining how too much water too fast generated a disappointing amount of electricity.

But while hydro production was 22 per cent ($18 million) below budget during the first quarter, nuclear production was also less than hoped for after a scheduled 35-day spring maintenance shutdown at Point Lepreau that began in early April dragged on for 53 days instead.   

That cost the utility millions, with the idle plant and under-performing dams both helping to drive NB Power's export sales down $17 million from last year.

No comment

NB Power did not comment on the financial results Tuesday and did not issue a press release to announce the results were available, something it has done every year since quarterly reports began in 2011.  

But there is little doubt posting earnings of $4 million to begin the year is a disappointment.  

The utility has not disclosed what it expected to make during the first three months but in previous years it has set profit targets for the first quarter as high as $43 million.

The utility has also not yet commented on the effect a four year rate freeze would have on its long term profitability, but an internal communication to employees obtained by CBC News shows there is considerable concern.

"There have been several announcements in the media associated with NB Power," says the memo, which was issued shortly after the Liberal party announcement by leader Brian Gallant last week.

"Because there is an election going on, we cannot comment on these announcements. We understand these messages can be a distraction. Please take the time to use your human performance tools to keep your focus."