The Alward government is facing criticism over its decision to allow NB Power to hike power rates by as much as two per cent without any regulatory oversight for the next two years.

Energy Minister Craig Leonard announced a new Electricity Act on Tuesday that will make NB Power a single company again, reversing the Lord government’s decision to break up the utility nine years ago.

NB Power will be forced to appear in front of the Energy and Utilities Board to justify any rate increase, instead of the current rule of appearing only for increase of more than three per cent.

But that change is being delayed for two years, which Green Party Leader David Coon said is politically convenient for the Alward government.

"They're going to let the EUB have the last word on rate increases after the next election," Coon said.

Coon said he expects NB Power will need significant rate increases to make up for a three-year freeze on rates imposed by the Alward government.


Energy Minister Craig Leonard unveiled the new Electricity Act in the legislature on Tuesday. (CBC)

He said Leonard wants to make sure that doesn't happen until after New Brunswickers vote next fall.

The provincial government is brushing aside criticism that the decision to delay EUB oversight is politically motivated.

Leonard said the two-year delay was imposed because the regulatory board will be just too busy with other parts of the law.

"The amount of work that's going to be required from the EUB hearing regulatory matters that come out of this reintegration simply doesn't allow for all these rate hearings," he said.

The Alward government’s three-year rate freeze expires on Sept. 30. Leonard said "modest" power hikes will allow the utility to hit its financial and debt reduction targets.

Repackaging NB Power

In 2004, the Lord government broke up NB Power into a holding company and a series of competing subsidiaries.

The intention was to make NB Power operate more like a business and run at arm’s length from the provincial government.

On Tuesday, Leonard said the reintegration of NB Power would allow the utility to "pay down debt and operate like a business."

The new law will also let NB Power's board of directors pick the next president and chief executive officer rather than having that power rest with the cabinet.

The proposed law will also force large industrial customers to purchase electricity from NB Power.

The Lord government’s reforms gave the large industrial customers the option of leaving the grid and purchasing their power from outside of New Brunswick. However, no companies ever came forward to test out the provision in the law.

The Energy and Utilities Board will have the authority to scrutinize all parts of NB Power, instead of just two companies.