Irving Oil must pay bills for opponent in hearing
Company is seeking an increase to wholesale gas margins
Irving Oil Ltd. will have to pay the bills of the chief opponent to rate increases it has applied for at the province's first ever petroleum price hearing next week, the Energy and Utilities Board has ruled.
The company was surprised to learn it was responsible to finance the case being mounted against it by Rene Basque, the public intervener, and unsuccessfully complained about it at a special EUB hearing last week
"Irving Oil takes issue with having any obligation to pay the public intervener's costs in relation to this proceeding," Len Hoyt, a lawyer for Irving Oil, told the board last Tuesday.
He said it was "an absurd and unduly onerous obligation" on Irving Oil to finance both its own case in favour of petroleum price increases and Basque's case against it.
Basque, recently a law partner of former New Brunswick Progressive Conservative Party president and current Moncton-Riverview-Dieppe Conservative MP Robert Goguen, is expected to bill close to $125,000 to oppose Irving's application.
Irving Oil applied for increases ranging between 22 per cent and 25 per cent in the wholesale margins it can charge retailers — and ultimately the public for gasoline — diesel and heating oil last June.
Irving says the wholesale margins — currently six cents a litre for gasoline and diesel and five cents a litre for heating oil — haven't budged since the adoption of petroleum price regulation in 2006 and have been heavily eroded by inflation since.
If successful the application will raise about $20 million a year for Irving Oil and other petroleum wholesalers in New Brunswick and add about 1.5 cents a litre to the pump price of most fuels.
Basque is opposing several elements of the application including the fact that about one quarter of the increase being applied for is to offset future inflation that even Irving Oil acknowledges hasn't occurred yet.
He's also suggesting Irving Oil has wrongly tried to charge some refinery expenses it incurred because of new federal ethanol regulations to its wholesale costs even though the province previously adjusted retail prices to account for the addition of ethanol.
Basque and Irving Oil have already had some testy exchanges in advance of next week's hearing with the oil company complaining about Basque releasing some confidential company information and sharply questioning the credentials of a U.S. energy consultant Basque hired to analyze Irving's application.
Basque suggested Irving Oil planned to "discredit" the consultant when he shows up in person to testify.
The hearing, which begins next Wednesday, is supposed to be public but Irving says much of the material to be reviewed is confidential and the Energy and Utilities Board has indicated that it may have to move much of it behind closed doors.
"The board has an obligation to protect confidential information. It also has an obligation to try and hold a public hearing, as public and transparent as possible," said David Young, a spokesperson for the EUB.
"That's going to be a challenge."