N.B. Power proposal to end urban, rural rates would add 15% to service charge for some

N.B. Power's proposal to do away with separate urban and rural service charge rates would mean a 15 per cent monthly increase for some customers.

That proposal was spurred by New Brunswick's local governance reform, according to N.B. Power staff appearing before the province's Energy and Utilities Board last week.

N.B. Power rate design specialist Veronique Stevenson said those within municipal boundaries before those reforms took effect in January 2023 are now paying a cheaper urban rate.

While those brought into municipal boundaries in 2023 would technically fall into that same urban category, Stevenson said those households are still paying the more expensive rural rate. 

That's because transferring those households over to the urban rate would mean a considerable revenue loss for the utility, she said.

The Crown corporation's general rate application lists the existing urban and rural rates as $24.57 and $26.96 per month, respectively. It also has a "seasonal" category, which is also charged $26.96 per month.

N.B. Power proposes to merge the categories to a uniform rate of $28.97.

But that would mean a 15.1 per cent increase to the monthly service rate, or $3.70, for about 51 per cent of customers – those who would have previously been charged under the urban category.

While the remaining customers in the rural and seasonal categories will take on a 4.9 per cent increase, or $1.31 per month.

"So N.B. Power's proposal is asking urban customers to bear a higher increase in order to cover a lower increase for the rural and seasonal customers, that's the implication?" Abigail Herrington, counsel for the EUB, asked the panel on Thursday.

Stevenson agreed that urban customers "will certainly see a bit of a higher rate increase" if the changes are accepted by the board.

"Because it only applies to the service charge, customers with lower energy will see a higher percentage increase on their bill," Stevenson said. 

It's a disparity that Randy Hatfield, executive director at the Human Development Council in Saint John, worries will disproportionately impact low-income customers. 

"Low-income people are better off with a lower monthly flat-rate charge. As low as possible," he said. "Because they tend to be users of a smaller amount of electricity, and they have some control or agency over how much they use."

He also pointed to a report from independent consultant Robert Knecht, hired by public intervenor Alain Chiasson, which says the overall increase across categories isn't justified.

Shelley Petit, who is representing the New Brunswick Coalition of Persons with Disabilities, also worries about how the change will affect people's bills and ability to access basic needs. 

"These increases are portrayed as small, just a few dollars here and few dollars there, barely the price of a coffee a day, but we do not have that luxury of going out and buying a coffee," Petit said in a statement. 

"Too many persons with disabilities are already eating only what is obtained from the food banks. They are being forced to skip treatments, uncovered medications and more."

She worries ultimately those on fixed incomes will not be able to handle the proposed increases.

Asked about the utility's reasoning for putting more of the increase on urban customers, N.B. Power spokesperson Dominique Couture referred CBC News to exhibit NBP11.41. 

However, exhibit NBP11.41 does not provide a rationale, but lays out the increases in each category and bill impact.

CBC News requested comment from the province's Department of Local Government on Friday but did not receive a response.