Rate hearing delays prove costly for NB Power

Delays at NB Power's ongoing rate hearing have evolved from a mere frustration into a significant financial penalty for the utility as each week that passes without an increase costs it — and saves customers — about $400,000.

Utility says it's losing about $400,000 with each passing week

NB Power says it's losing income as a result of the delayed EUB hearings. (CBC)

Delays at NB Power's ongoing rate hearing have evolved from a mere frustration into a significant financial penalty for the utility as each week that passes without an increase costs it — and saves customers — about $400,000.

"A very rough rule of thumb that we've used is somewhere between $1.5 and $2 million a month," NB Power's chief financial officer Darren Murphy said last week about the cost of its rate review dragging on without a decision.

The utility is asking for permission to raise rates on customers an average of 1.5 percent but had banked on getting an increase in place by April 1.

It submitted its application for a change last October, in part so it could have it approved by the start of its fiscal year.  

NB Power's Darren Murphy said the utility is losing about $400,000 with each passing week at the rate hearing is continually delayed. (Robert Jones/CBC)

The Energy and Utilities Board scheduled a 12-day hearing that was supposed to conclude in late February, giving the regulator a month to issue a decision on power rates by the end of March, but that schedule fell apart almost immediately.

Lost income

Complex issues, long winded participants, unexpected developments and scheduling conflicts among parties all took turns wreaking havoc on the optimistic timeline.    

As a result, the hearing is now eight weeks behind schedule and, since April 1, the lack of an increase has been draining money from the utility's new fiscal year budget with no clear date in view of when higher rates might take effect.

Given the current board schedule we think there's some likelihood that it's the latter part of June or first of July.- Darren Murphy, NB Power

Hearings began another two-week recess this week as parties were unable to clear days in their schedules at the same time to meet again until the very end of April and then only for three more days.  

If the hearing has not concluded by May 2, it will be another week long recess until two more more sitting days can be pieced together mid month.

Murphy said since the EUB normally takes a number of weeks after a hearing concludes to issue a rate decision, the utility is not hopeful of being able to charge customers more until summer.

"Given the current board schedule we think there's some likelihood that it's the latter part of June or first of July," said Murphy.

"So somewhere between four and a half and six or seven million dollars (in lost income)?" asked Scott Stoll, the lawyer for municipal utilities.

"Correct," replied Murphy.