NB Power files for 8.9 per cent rate hike, government says it's not likely to intervene

NB Power has filed a general rate application with the New Brunswick Energy and Utilities Board - an 8.9 per cent increase.

"We recognize any rate increase is difficult for our customers,” said Lori Clark, the acting president and CEO of NB Power.

“NB Power has taken steps in ensuring the rate increase is as low as it can possibly be while the utility can continue to cover its services."

If approved, the rate will come into effect in April 2023 and will amount to roughly $16 a month, or about $200 a year for average residential customers.

Premier Blaine Higgs and Energy Minister Mike Holland say it's not likely the government will intervene.

"We have to look at the fact that governments have been criticized for meddling and being involved in NB Power's affairs over the years,” Holland said.

"I don't see that as a favourable approach because what has happened in the past where you know if we look back in history where we've put in rate freezes and you know, we've done things that haven't been the wises investment and they would be politically motivated,” said Higgs.

“That impacts the bottom like to rate payers and it affects the bottom line to the utility. So, how do we deal with that? We deal with it by trying to reduce the consumption and trying to go at that hard."

The Enhanced Energy Savings Program, a partnership between NB Power and the Department of Natural Resources and Energy Development, was opened to applicants last week.

"The programs that were recently announced are only going to reach five per cent of the target audience over the next three years. That's nothing," said David Coon, the leader of New Brunswick's Green Party. “Well it's something for those 2,000 people but it's kind of like a lottery."

Coon says the program should be funded up to $150-200 million a year.

He believes NB Power could lower costs by going with renewable energy.

"If we had a utility as we should in the future that is primarily powered by renewable sources of energy,” Coon said.

“Then you're dealing with free sources of energy which are eternal and your costs are all about harnessing that and storing it, rather than paying for fuel and importations."

NB Power described the proposed increase as a break-even budget.

"The 8.9 per cent is what we're applying to the EUB for. In future years, we were looking at what that rate increase needs to be so we do adequately address our debt situation and ensure that the utility is financially sound for the future,” Clark said.

The utility has accrued about $5 billon in debt. To tackle that in the following years, increases could be raised between two and 16 per cent.

"The next two tears on our application you will see there is debt reduction as a primary focus,” Clark said.

“We are focused on meeting debt equity targets of 80/20 by 2027 to prepare for Mactaquac expenditures and other capital expenditures we have in the future."

NB power plans to cut its operating costs by $50 million. That includes reducing its workforce.