N.B. Power asks to give customers 1% rebate on monthly bills

N.B. Power customers might see a one per cent rebate on their bills starting in April, partially because of increased rainfall, resulting in more hydro power.

In October, the utility asked energy regulators to approve an 8.9 per cent increase in power rates for all its customers — the biggest rate hike in 15 years.

And that isn't changing.

But with "hedge gains," which refer to the risk-management strategy of hedging to offset potential losses or gains, and with the increase in hydro power, the utility is filing an application with the Energy and Utilities Board to reimburse customers a total of $15 million, effective April 1, 2023.

Factors out of utility's control 

"Due to changes that we're seeing in the market today, things that are outside of our control, the one per cent credit is as a result of improved hydro flows, as a result of improved export margins and a hedge transaction that we have benefited from in this year," said Lori Clark, acting CEO of N.B. Power. 

"So those are things that are a benefit to customers, and we're following the formulaic prescribed regulation."

Before now, N.B. Power had to absorb any "variances" after its rates were set based on forecasts of anticipated revenue and supply costs.

But variances — in energy consumption, weather and exchange rates, for example — could result in either additional revenue or costs. According to N.B. Power, recent years have resulted in additional expenses that had to be absorbed by the utility.

Changes to the Electricity Act in 2021 mean there are now two variance accounts to track actual costs and revenue: the energy supply cost variance account and the electricity sales and margin variance account. 

The energy supply cost variance account represents the difference between the actual cost and budgeted cost of generating electricity. The electricity sales and margin variance account shows the difference between actual and budgeted revenue. 

Both changes would start April 1

The combined credit for the two accounts in the last fiscal year was $28.6 million. 

If the proposed $15 million reimbursement is approved by the EUB, it won't change the general rate application for the 8.9 increase, but it will mean a refund of one cent for every dollar they consume.

Clark said while the rate and the rebate are separate processes, they would both go into effect April 1. 

The variance will be calculated each year, said Clark, with some years possibly resulting in a credit like this year, or a "rate rider charge."

"This year, it's a good news story for customers," she said. "I think the important thing for customers [to know] is that this could go either way in the future."