Residential, commercial customers could bear the brunt of NB Power's 'weather tax'

The lawyer for New Brunswick's municipal utilities suggested Monday if NB Power wins the right to charge customers extra for storm damage, the bills may fall mostly on residential and commercial customers, as infrastructure serving those groups tends to suffer the most in weather events.

NB Power may seek to recover costs specifically from groups served by the damaged equipment

Scott Stoll questioned how the proposed rate adjustment would be applied. (CBC)

The lawyer for New Brunswick's municipal utilities suggested Monday that if NB Power wins the right to charge customers extra for storm damage, the bills may fall mostly on residential and commercial customers, as infrastructure serving those groups tends to suffer the most in weather events.

Scott Stoll represents New Brunswick municipal utilities in Saint John, Edmundston and Perth Andover and asked if NB Power plans to charge groups according to who the damaged equipment serves if it wins the right to recover storm expenses.

"NB Power is looking to implement a rate adjustment mechanism," said Brad Crawford, NB Power's manager of regulatory affairs, telling Stoll "cost causation principles" would likely be used to sort out who pays what.

​Residential and commercial customers of NB Power are mostly served by the smaller wooden poles and wires of the utility's distribution system that often buckle and give way during heavy storms.

That's generally not the case for industrial and municipal customers, who take their electricity from NB Power's larger and more robust transmission system.

"The vast majority of storm-related damage is distribution system, I believe that's over 90 per cent?" asked Stoll.

"In view of the last series of storms we've had that would be roughly accurate," said Crawford.

An NB Power panel, including the utility’s director of regulatory affairs, Brad Crawford, centre, fielded questions Monday about the company’s plan to recover storm damage costs from customers. (Robert Jones/CBC)

That's potentially bad news for NB Power's commercial and residential customers. They account for just two-thirds of NB Power's in-province sales but as distribution customers could be made to pay almost all storm-recovery expenses.

NB Power says three major storms in the last four years drained it of $63.8 million in unbudgeted expenses. In this year's rate application, it has asked for the ability to pass those kind of unexpected costs onto customers in the future, but has provided only broad outlines of how the scheme might work.

"This application is speaking to the implementation of [the mechanism]," said Crawford.

"Further downstream there are a series of different decision gates around how we handle the rate adjustment mechanism and that has yet to be determined."

More detailed review of the idea at the hearing is expected next week.

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.