Proposed N.B. Power rate increase hits wall of opposition during final arguments

Multiple parties participating in N.B. Power's summer-long rate hearing joined forces during final arguments Monday to urge the New Brunswick Energy and Utilities Board to reject the Crown corporation's full request for an average 9.25 per cent increase in electricity prices in each of two straight years.

"A financially healthy N.B. Power is good for all in New Brunswick," said Ryan Burgoyne, a lawyer representing the three municipal utilities that operate in Edmundston, Perth-Andover and Saint John.

"However, the burden of improving N.B. Power's financial health cannot fall exclusively to ratepayers."

The three civic utilities were joined by New Brunswick's public intervener Alain Chiasson, forestry company J.D. Irving Ltd. (JDI) and a pair of groups representing low-income power customers in criticizing the size of rate increases being requested.  

They all called on the EUB to exercise its powers to make adjustments.

"The threat to New Brunswick's economy and to some New Brunswick residents and businesses is existential," argued lawyer Glenn Zacher in JDI's final presentation asking the EUB not to approve the full increase.

Since June, N.B. Power has been in front of its regulator seeking approval of an average 19.4 per cent cumulative rate increase over two years, including 9.25 per cent this year and another 9.25 per cent beginning next April.

Proposed increases to residential and large industrial customers are even higher, totalling 20.6 per cent over the two years.

The first half of those amounts took effect in April but are subject to final approval by the board following the current hearing. If the full amount is not approved, N.B. Power will be required to rebate excess amounts customers have already paid.

As of the end of August, N.B. Power estimates it will have collected $52.5 million in higher rates since the spring.

The utility has been arguing the amounts are needed to help overcome ongoing performance problems at the Point Lepreau nuclear generating station, improve its weak financial condition and prepare for expensive capital projects that are looming, including a multi-billion-dollar refurbishment of the Mactaquac dam.

In his presentation, Burgoyne acknowledged N.B. Power is not financially healthy but said raising rates significantly needs to be a last resort in fixing its problems.

"N.B. Power must minimize costs and take all other reasonable steps to improve its financial health without excessively burdening ratepayers," Burgoyne said in his presentation.

He said the municipal utilities "do not believe that the evidence in this matter supports that N.B. Power has taken these steps."  

Zacher made a similar argument on behalf of JDI, which is N.B. Power's largest private sector customer.

He claimed the utility has been the author of many of its own misfortunes, like poor performance at the Point Lepreau nuclear station, and said it should not be up to N.B. Power customers to come to the rescue.

"It is not just and reasonable that New Brunswick ratepayers continue to bear costs that do not reflect reasonable management and operation of the utility," he argued.

Public intervener Alain Chiasson questioned a number of accounting issues at the utility and what he claimed were unneeded or exaggerated expenditures planned by N.B. Power in the two-year period and said he felt there was considerable room available to the EUB to lower the request.

"The public intervener opposes the applied-for rate increases in 2024/25 and 2025/26," Chiasson argued at the beginning of his presentation.

Representatives of the Saint John Human Development Council and the New Brunswick Coalition of Persons with Disabilities also weighed in, calling the proposed rate increases a serious problem for low-income customers.   

Both groups have been questioning the absence of special low-income energy assistance programs available in other jurisdictions, like rate rebates, and urged the EUB to find some way to help.

"I urge the board to carefully weigh the human cost of the proposed rate increases," said the coalition's Shelley Petit.  

"It is imperative to consider alternative solutions that do not place an undue burden on our most vulnerable citizens."

In its final presentation that lasted more than 90 minutes, N.B. Power lawyer John Furey argued that the utility's financial problems are well understood and said during the hearing it fully and exhaustively justified its need for the full amount it is requesting.

"N.B. Power acknowledges that historically rate increases have not been as large as requested in this proceeding," said Furey. "But N.B. Power faces a challenging business environment." 

A final decision on the rate increase by the Energy and Utilities Board is expected to take several weeks.