Hike in power rates cut by half in revised proposal, says NL Hydro

"Too much for customers" is how a Hydro vice president describes the original numbers and says the utility knew it would have to find ways to ease the burden.

A proposed 18% hike now down to between 9-11%, with decision up to public utilities board

NL Hydro's Dawn Dalley says the utility knew when it saw the 18 per cent increase that it would have to examine options to ease the impact on customers. (CBC )

Newfoundland and Labrador Hydro says a proposed 18.6 per cent power rate hike has been reduced by half in a series of revised proposals to the Public Utilities Board.

"We've listened to the discussion," said Dawn Dalley, vice president, regulatory affairs and corporate services. 

"That rate increase was too much for customers and we understood that."

Dalley said the utility uses a formula under the Rate Stabilization Plan to calculate where power rates should be on July 1, similar to weekly price adjustments for gas, except it's done once a year.

"It's almost like a calculator. We put in a series of data that we have on electricity usage and oil prices and what comes out on the other end is the recommended change," she said.

Rates are calculated partly on how much oil is needed to run the Holyrood generating station, and on energy consumption by consumers.

But for 2017, the number — 18.6 per cent — was a shock. So high, the Public Utilities Board, which regulates energy prices, sent Hydro back to the drawing board to look at other options.

That's just what the company has done, Dalley said. In fact, it was ready before the order to recalculate.

"When we saw the output we had the exact same discussion .... we knew and expected that we would be discussing options."

There are five alternatives in the revised report to the PUB, Dalley said, bringing down the proposed increase to between nine and 11 per cent.

"We're OK with all those options. Whichever one the PUB chooses, we will be fine with it."

She said she expects a decision from the board "any day."

Dalley said Hydro could have come up with the options before making its initial application, but decided to let the process run its course and wait for input from industrial users, Newfoundland and Labrador Power and the Consumer Advocate.

Rates will be calculated differently when Muskrat Falls power comes online. (Newfoundland and Labrador Hydro)

With files from Stephanie Kinsella