NB Power rate freeze sought by industry

An organization of New Brunswick's largest employers is criticizing NB Power's three per cent rate hike, saying the higher power prices will hurt their competitiveness.

David Plante, vice-president of Canadian Manufacturers and Exporters, New Brunswick division, said the New Brunswick government should freeze electricity rates until a long-term plan for NB Power can be worked out.

'The inexorable rise in electricity rates is adversely impacting the ability of manufacturers and exporters to compete in global markets and is threatening the viability of a number of provincial operations.' — David Plante, Canadian Manufacturers and Exporters

"A rate freeze would be priceless in terms of buying time to develop a sound action plan to deal with rising energy costs," Plante said in a news release.

"This would provide a benefit to all New Brunswickers as the competitiveness of manufacturers and of our ability to employ people and to contribute to a high standard of living is integrally linked."

Plante's organization accounts for 75 per cent of all manufacturing exports in New Brunswick, which is Canada's third most industrialized province.

The industry association said a series of power rate increases in the last five years have put a lot of financial pressure on the companies to remain economically viable.

Plante said the rising Canadian dollar has also eaten into the value of their exports by about 10 per cent in the last year.

Considering those economic challenges facing the large industrial consumers, Plante said NB Power should have held off on the proposed three per cent surge in electricity prices that was announced on Friday.

"NB Power has provided no rationale for the rate increase, other than the fact that it is allowed for under legislation," Plante said.

"The inexorable rise in electricity rates is adversely impacting the ability of manufacturers and exporters to compete in global markets and is threatening the viability of a number of provincial operations."

NB Power was instructed by the Liberal government to come up with a short-term plan to contain costs after the deal to sell a majority of the utility's assets to Hydro-Québec collapsed. The proposed power accord would have cut large industrial rates by 22 per cent.

After the deal fell apart, Premier Shawn Graham said he'd still like to find a way to deliver a substantial rate decrease to the province's largest power users, who have long complained that high electricity costs are rendering them uncompetitive.

NB Power cutting managers

NB Power is permitted to increase power rates by three per cent without having to justify it request in front of the Energy and Utilities Board.

The New Brunswick government did instruct EUB to review the utility's rate request last year. It is expected that Energy Minister Jack Keir will ask the Crown corporation to appear in front of the regulatory board to explain its 2010-11 rate request.

Gaetan Thomas, the acting president and chief executive officer of NB Power, on Friday released what he said was the utility's short-term plan to reduce costs.

Along with the decision to push up rates, Thomas announced he'd trim the number of vice-presidents to five from eight and cut about 100 management and administrative positions, designed to save $20 million.

But Plante said NB Power's commitment to chopping positions isn't going far enough. He said manufacturers have been forced to aggressively find ways to improve their efficiency and he said NB Power should do more to discover internal savings.

"The message being sent to industry is that prices are going up, so deal with it by cutting costs and improving productivity. Our public institutions, however, are showing no intention of doing the same," Plante said.

NB Power should be forced to undergo a thorough review of its cost structure and how the utility spreads those costs out to its different customer classes, the CME official said.