New Brunswick

NB Power customers face rate increase of about 2% on Oct. 1

NB Power customers will be paying close to two per cent more, starting on Oct. 1.

Energy and Utilities Board has approved increase, but exact amount uncertain

NB Power customers will be paying more on Oct. 1, likely close to two per cent, but the exact amount is not yet set.

NB Power had applied for a rate increase of two per cent to begin on July 1. (CBC)
In an interim decision released on Monday, the New Brunswick Energy and Utilities Board (EUB) says it is prepared to approve a delayed rate increase for NB Power at the end of September, but not the entire amount the utility had asked for at hearings in June.

The EUB has asked NB Power to recalculate what it needs, based on $4 million in expenses the board has disallowed from the utility's application.

"NB Power is directed to reduce its revenue requirements accordingly, recalculate the necessary rates … and refile this information … with the board as soon as possible," the decision states.

However, the recalculation is unlikely to reduce NB Power's rate increase below two per cent.

NB Power originally applied for the rate increase to begin on July 1 and the delay until Oct. 1 has already cost it several million dollars, more than enough to offset the disallowed expenses.

NB Power is still reviewing the board's decision and will file the requested response as soon as possible, spokeswoman Deborah Nobes said in an email to CBC News.

$1M Tobique riverbank fix MOU secret

In its interim decision, the EUB says $1 million NB Power had in its budget to fix riverbank problems along the Tobique cannot be charged to power customers because the work was imposed on the utility by the provincial government and does not benefit NB Power.

"Insufficient information was provided to support this expense related to the project and it is therefore disallowed," wrote the board.

NB Power would give very little information at its rate hearing about why it is spending money on the Tobique riverbank other than to say it was ordered to do it by the provincial government.

Government has instructed us not to disclose that document.- John Furey, NB Power lawyer

NB Power's chief financial officer Darren Murphy said the riverbank work was part of a memorandum of understanding (MOU) between the province and the Tobique First Nation, an issue EUB lawyer Ellen Desmond tried to explore in depth at the June hearings without success.

"If the [province] is directing certain action how come the [province] is not bearing the cost of that activity?" asked Desmond.

"I can only speak to the fact that NB Power was directed to carry out certain works," said Murphy.

NB Power lawyer John Furey told the EUB he could not even supply a copy of the MOU for the board's inspection on orders from the province.

"The response of government is that [it] is not just a confidential document but it is a document that they have refused to provide under Right to Information requests," said Furey. "Government has instructed us not to disclose that document."

Deal was negotiated by Graham government

Government officials could not immediately be reached for comment on Monday.

The Tobique MOU was negotiated by the former government of Shawn Graham and signed in December of 2009.

The Graham government sought to solve long-simmering grievances over the construction of hydro-electric dams in the province by offering a package of electric power-related benefits to the Tobique First Nation.

In addition to calling for riverbank restoration projects on the St. John and Tobique rivers, the government also promised:

  • Training and maintenance work for Tobique First Nation workers at the Tobique and Beechwood dams.
  • Work on fixing old riverside dump sites.
  • Royalties from power generation.
  • The transfer of five megawatts of power  — worth up to $4 million per year — to the Tobique First Nation, along with other benefits. 

In exchange, the provincial government won agreement that protests and blockades at the dam would end.

NB Power was not involved in negotiating the MOU and the document itself has never been publicly released.

EUB orders $3M in expenses to be cut

In addition to disallowing money spent on the Tobique riverbank, the EUB also said it expects NB Power to cut its expenses by an extra $3 million.

It accepted some of the evidence of John Athas, an expert called by public intervener Heather Black, who argued NB Power should be able to save more money from continuous improvement efficiencies than the $10 million it had budgeted.

The board says it will settle on a final rate hike when NB Power calculates the effect of eliminating the disallowed expenses and moving the rate increase from July to October.

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.

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