Newfoundland and Labrador Hydro has scrubbed plans to impose new rate increases, giving consumers a break as winter weather settles in.

The Crown-owned corporation — which sells power directly to rural customers, as well as private utility Newfoundland Power — had applied this summer to the provincial regulator for a range of rate hikes.

Ed Martin, chief executive officer of Newfoundland and Labrador Hydro, says internal changes prevented a full rate increase.
(CBC)

Hydro said lower fuel costs and interest rates have contributed to a better financial picture.

Chief executive officer Ed Martin said there will now be an increase so marginal that some consumers may not even notice it.

"If you're [paying] $300 a month, you'll be paying $300.24," he said Friday. "We've been successful in whittling this thing down to where consumers benefit."

Tom Johnson, the Newfoundland and Labrador government's consumer advocate, said behind-the-scenes negotiations prevented the need for hearings at the Public Utilities Board.

"The 'it' that happened was negotiations on the full rate case, essentially," Johnson told CBC News.

Johnson said in all of Hydro's documentation on rate changes, the issue of the consumer's ability to pay is never considered.

"If it was set by ability to pay, we'd have much lower rates, so when I was looking at a $100 increase a year, I knew darn well a lot of them were struggling as it was," Johnson said.

Hydro had applied to the PUB to increase rates by 4.6 per cent on the island and more than 19 per cent in much of Labrador.

A government subsidy of about $400,000 will offset Hydro's costs of buying diesel fuel for generators in rural Labrador.

Sarah Sexton, a senior in St. John's, said the cancellation of the rate increase comes as welcome news for Christmas.

"Thank God, because I've been finding it very tough on seniors," she said.