Hefty hikes in oil prices will likely translate into higher electrical bills, Newfoundland and Labrador Hydro has warned.
The Crown-owned utility, which burns oil at its generating station in Holyrood, has applied to the Public Utilities Board for an increase of seven per cent. If approved, the application under the Rate Stabilization plan would take effect on July 1.
"The fuel price projection used for setting electricity rates has climbed from $84 per barrel to $103 per barrel — almost $20 more per barrel over the last 12 months," Hydro vice-president Jim Haynes said in a statement.
The increase would be passed on immediately to customers of Newfoundland Power, which purchases power from Newfoundland Hydro.
"The cost of oil is a direct pass through to consumers and neither utility receives any profits or benefits financially from changes in oil prices," Haynes said.