NB Power hiking rates by 2% on Oct. 1

NB Power will be raising power rates for all of its residential and industrial customers by two per cent on Oct. 1, the company announced on Monday.

The rate increase ends the three-year rate freeze instituted by the Alward government following the 2010 election.

NB Power is permitted to hike electricity rates by two per cent annually for the next two years without being forced to defend its rates in front of the Energy and Utilities Board. That provision was included in the new Electricity Act, which is being debated in the legislative assembly.

"Even with the positive financial results of the past few years, this rate increase is required to address the impact of rising fuel costs, and to contribute to our goal of reducing the debt of the corporation by $1 billion over the next 10 years," said Gaëtan Thomas, NB Power’s president and chief executive officer, in a statement.

The NB Power president listed eight initiatives undertaken in the last three years to trim costs at the utility, including reducing the number of vice-president positions, eliminating executive bonuses, cutting 300 full-time positions, instituting a two-year wage freeze on non-union positions and negotiating zero per cent increases in large union contracts.

"NB Power is a smaller, more productive, more efficient organization than it was three years ago," Thomas said in a statement.