NB Power reverses 'weather tax' proposal after public backlash

The utility was initially seeking permission to levy surcharges on customers following major storm damage and other expensive unexpected events.

Severe weather events in the past 4 years have drained the utility more than $60M

NB Power initially proposed the idea of recovering storm costs directly from customers to help support annual profit targets. (CBC)

NB Power's "weather tax" proposal is officially dead.

The utility was initially seeking permission to levy surcharges on customers following major storm damage and other expensive, unexpected events.

The Energy and Utilities Board granted NB Power's request to withdraw the proposal on Monday. The decision was made after a whirlwind of public opposition blew up around the proposal over the last two weeks. 

"The board grants leave to NB Power to withdraw its request  to implement a rate adjustment mechanism in this proceeding," said Francois Beaulieu, vice-chairman of the EUB.

He made the announcement after hearing arguments about terminating the plan on Monday at NB Power's ongoing rate hearing.

"The board will treat the proposed rate adjustment mechanism as no longer an issue in this proceeding."

NB Power had proposed the idea of recovering storm costs from customers directly to help shore up its annual profit targets.

Those profits have been battered by severe weather events three times in the last four years, draining the utility of more than $60 million.

Strong public opposition 

But the idea of a storm surcharge generated strong public opposition, including criticism from Premier Brian Gallant.

Last week, the premier complained to the utility directly about the potential tax, stating he was "strongly opposed" to the idea and might overrule it if approved by the regulator.

John Furey, a lawyer with NB Power, said the proposed "weather tax" has no future. (Philip Drost/CBC)

Meanwhile, John Furey, a lawyer with NB Power, told the EUB the proposal had no future.

"NB Power has received input both from its shareholder and from customers with respect to the rate adjustment mechanism that was proposed in the application," said Furey. 

"That input was overwhelmingly negative."

Furey's motion to retract the plan was not met with significant resistance.

But Ellen Desmond, a lawyer with the EUB, said if it was withdrawn, she did not want to see the proposal come back to life at a later date.

Ellen Desmond, a lawyer with the Energy and Utilities Board, said she doesn't want to see the proposal come to light again after the 2018 provincial election. (CBC)

"We would be concerned if this request came back in its current form in a very short period of time," said Desmond. 

"I think that would call into question the integrity of the process."

This rate hearing is the last one before a provincial election is held in September.

Furey said the utility plans to seek public input before developing any alternative proposal, but said he would be "shocked" if it resulted in anything similar to the suggested "weather tax."

"NB Power's intention today is that this specific mechanism will not be brought back before the board," he said.   

About the Author

Robert Jones

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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.