New Brunswick

Liberals promise 4-year freeze on NB Power rates for homeowners, small businesses

PC leader says one way or another, New Brunswickers will pay for a rate freeze

August 29, 2018

Liberal Leader Brian Gallant says NB Power has to do better. (Nicolas Steinbach/Radio-Canada)

A Liberal promise to freeze power rates for residential customers and small businesses drew sharp criticism from opposition parties Wednesday. 

Liberal Brian Gallant said the party would introduce legislation to freeze rates for some customers over the next four years and force NB Power to cut jobs and spending. 

ADVERTISEMENT

"Many people's power bills are going up faster than their wages," Gallant said during a campaign announcement on the lawn of a private home in Moncton.

The legislation would force NB Power to find about $13 million in annual savings to make up for revenue it would have otherwise raised if it could increase the cost of electricity. 

NB Power spokeswoman Sheila Lagacé said the utility won't be commenting "as this is an election campaign promise." 

Leaders call move 'irresponsible'

David Coon, leader of the Green Party, and NDP Leader Jennifer McKenzie both called the Liberal plan an "irresponsible" move.

"We have a regulatory process that's designed to ensure that any rate increase proposals are properly vetted and if they're not warranted, they're turned down," Coon said, referring to the Energy and Utilities Board. 

McKenzie called it a "dangerous path" the Liberals have proposed and suggested a better approach would be focusing on developing renewable energy. 

Blaine Higgs, the Progressive Conservative leader, said "putting a political hand-cuff" around the utility will make its financial situation less secure. 

Click to show more
Gallant promised to freeze NB Power rates if re-elected. He said "enough is enough."  0:56

"One way or another, the people of the province will pay for a rate freeze," Higgs said in Lamèque.

NB Power forecasts a two per cent rate increase each year as it seeks to pay down its $4.8 billion debt. The utility recorded a profit of $23 million in the last fiscal year. 

People's Alliance Leader Kris Austin said in an emailed statement that the Liberal announcement "is an encouraging idea." But he said the financial strain of increasing power bills isn't new. 

'A small relief'

"We question as to why only during an election cycle does the Gallant government offer a small relief, after four years of tax increases that have many at the breaking point," Austin said. "Seeing as this promise is coming from the Liberals, is this a promise the people can really trust?"

Annual increases of two per cent per year would cost residential and small businesses more than $13 million a year over the next four years, said Gallant.

The freeze would also apply for municipal utilities on electricity purchased from NB Power for either residential or small business customers.

Blaine Higgs, the Progressive Conservative leader, says the Liberal promise effectively means 'putting a political hand-cuff' around the utility that will make its financial situation less secure. (Radio-Canada)

The freeze would not apply for large industrial customers. 

Asked what would happen if NB Power shifted the rate increase to industrial customers, Gallant said the utility would have to make up the $13 million difference through "efficiencies" in measures the party has proposed.

'Mandate' savings

"We will mandate them to find the $13 million and we will have a discussion with the measures we'll put in place, and we hope they'll come with their own ideas," Gallant said. "With the measures we put in place, we believe we can find the $13 million, but even more than that."

He said the legislation will include an "incentive" for NB Power to cut costs so rate increases aren't required.

"Call it a stick, if you will, but we're going to make it real clear that they're going to have to reduce power rates and that's going to be the case for four years," he said. 

No 'weather tax'

A Liberal government would also reduce the size of management at NB Power by 30 per cent and would require a review of senior salaries. It would also set a "cap" on administrative expenses as a percentage of overall expenses. 

The Liberals would also prevent NB Power from introducing any kind of "weather tax" to help pay for extreme weather events, he said.

The 2017 ice storm cost NB Power about $30 million.

Voters head to the polls on Sept. 24.

Brian Gallant said a re-elected Liberal government would introduce legislation to freeze power rates over the next four years for residential customers and small businesses. (Shane Magee/CBC)

With files from Shane Magee and Nicolas Steinbach

CBC's Journalistic Standards and Practices
Report Typo or Error