NB Power's plan to pay for the cost of refurbishing the Point Lepreau Nuclear Generating Stations in equal monthly payments over 27 years has been approved by the New Brunswick Energy and Utilities Board.
In its ruling on NB Power's deferral account, the regulator accepted NB Power's financing cost and the methodolodgy for amortizing the repayments over the life of the reactor.
"Our customers will not see any increases in rates going forward as a result of the Point Lepreau refurbishment projects," said NB Power president Gaëtan Thomas in a statement.
"The costs related to Point Lepreau have been fully accounted for in our projections and we intend to recover these costs through equal payments — similar to a home mortgage — made monthly during the 27-year life of the plant."
At a hearing before the EUB in October, NB Power said it would like to repay more than $1 billion in deferred costs through more than 300 monthly payments of $5.6 million.
That payment schedule lowers the principal owed on the deferral account by $1.6 million a month, or about $20 million in the first year.
An EUB lawyer pressed the utility at the hearing on whether a more aggressive payment schedule in the early years would guard against the reactor not performing as well as expected.
However, NB Power argued it is equally likely Lepreau could perform better than expected over time and paying costs gradually prevents current customers from paying too much for something that would also benefit future customers.
"Our goal has been to ensure future generations do not bear an unfair financial burden from the Lepreau refurbishment while being open and transparent in our finances," said Thomas.