Municipalities accuse NB Power of over-charging for street-light service

The Union of Municipalities of New Brunswick says NB Power needs to stop raising the rates it charges for street lights. 

In fact, executive director Margot Cragg said the utility not only needs to stop raising rates — it needs to reduce them. 

Cragg made a presentation to the Energy and Utilities Board in early February after the City of Fredericton wrote a letter about the rates for street lights and the union decided to take on the fight for all municipalities.

"For Fredericton, the cost in 2017 was over a million dollars," she said. "For other municipalities in the area, like Oromocto, it was $340,000 and even for a rural community like Hanwell, it was over $41,000 … that's a pretty hefty bill." 

Cragg said money spent on street lights can't be spent elsewhere. 

Another increase

She added the EUB has set a standard to determine the charges to each rate class.

"So what the EUB has said is that the rate charge for each class should be about equal to the cost of supply of the service, within a range of reasonableness." 

But Cragg said NB Power is proposing to increase it to 195 per cent of that cost.

"That's almost double the cost of actually providing the service." 

Cragg pointed out the present rate is too high and has been getting worse year over year. She said in 2015-2016 it was 176 per cent of the cost of supplying the service. 

In 2017-2018 it was 192 per cent of the cost.  

"That cost to revenue ratio has been getting worse year over year," Cragg said, adding that if the proposed rate is accepted, the ratio will be even more punitive.

'Optional' service

At its rate hearing last year, NB Power said it considered street light service optional and not subject to the EUB's fair price guidelines. It also said the higher prices it charges for street lights help it to keep prices it charges other customers, such as homeowners, lower.

At hearings this week, both public intervener Heather Black and EUB lawyer Ellen Desmond pressed NB Power rate design managers to explain why they ignore the board's fair price guidelines in setting charges for both street lights and water heater rentals. 

"NB Power doesn't really view street lights as a rate class," said the utility's rate design specialist Kevin Gibson. But he said it would follow whatever direction the EUB gives it on the issue.

Follow the standard

Cragg said it's up to the EUB to make NB Power follow the standard it set.

"What the heck, you've set a standard for what should be charged for each rate class, this is pretty clearly not falling within that, what are you going to do about it?" 

Cragg said the group asked the EUB to set the rate at one that provides fair pricing for street-lighting services within all municipalities. 

"Any dollar that is spent on excessive pricing for street lighting is money the municipality can't spend fixing the road, can't spend on the water services, can't spend on the services and infrastructure you and I use every single day in our communities," she said.