Large price hikes requested by N.B. Power to get long-delayed review

New Brunswick residential and industrial electricity customers began paying 9.8 per cent more in base power rates on April 1, but those amounts have not yet gotten final approval from the Energy and Utilities Board.  (Robert Jones/CBC - image credit)
New Brunswick residential and industrial electricity customers began paying 9.8 per cent more in base power rates on April 1, but those amounts have not yet gotten final approval from the Energy and Utilities Board. (Robert Jones/CBC - image credit)

A long-delayed hearing into two large rate increases sought by N.B. Power is scheduled to begin in Fredericton today, although for months the utility has been charging customers some of the higher prices that will be under review.

The New Brunswick Energy and Utilities Board is expected to hear evidence sporadically over 16 days starting this week and ending in late August to determine whether N.B. Power should be allowed to raise its electricity rates by nearly 20 per cent over two years.

The utility says it needs the money to slow growth in its $5.4 billion debt load as it begins spending billions more on major infrastructure projects, including a refurbishment of the prematurely aging Mactaquac hydro electric dam outside Fredericton.

Highlighting the gravity of the request, N.B. Power president Lori Clark will appear at the hearing for a second straight year to personally give evidence about the need for higher rates, something previous chief executives at the utility have rarely done.

"The cost of delivering electricity has risen significantly," Clark says in an opening statement that has already been filed with the EUB and is expected to be delivered today.

N.B. Power CEO Lori Clark said she felt relieved when the Higgs government directed it to push back major rate hikes.
N.B. Power CEO Lori Clark said she felt relieved when the Higgs government directed it to push back major rate hikes.

N.B. Power CEO Lori Clark, shown here at an appearance at the legislature, intends to personally appear at the utility's rate hearing to testify about the need for higher prices. (Jacques Poitras/CBC)

"We need to raise rates to allow us, as a cost-of-service utility, to cover our costs and that is reflected in our application.  We understand that nobody likes to see rates going up, and we know this is a difficult time for our customers as they are already facing cost pressures on their everyday needs from gas to groceries." 

Because of delays in scheduling the rate hearing, mostly caused by the New Brunswick government, N.B. Power was given permission by the EUB to raise its base rates for this year on April 1 by an average of 9.25 per cent, including 9.8 per cent on residential and industrial customers.

The hearing will investigate whether that increase was justified. It will also determine whether a second average increase of 9.25 per cent, including another 9.8 per cent increase on residential and industrial customers scheduled for April 2025, is warranted.

By the time the hearing concludes in late August, N.B. Power will have collected an estimated $52 million in additional  revenue from customers from the higher rates awarded in April.

The utility will be required to refund a portion of that if the EUB eventually decides the full increase is too high.

Premier Blaine Higgs quoted from a presentation by Dr. James Cantor, a Toronto psychologist who testifies in favour of gender-affirming care bans in the United States.
Premier Blaine Higgs quoted from a presentation by Dr. James Cantor, a Toronto psychologist who testifies in favour of gender-affirming care bans in the United States.

A decision by Premier Blaine Higgs not to fill vacancies on the Energy and Utilities Board for several months left it unable to hold hearings on N.B. Power's rate increase in May. Earlier, a surprise government decision to alter N.B. Power's debt targets scuttled a February hearing. (Radio-Canada)

"The Board directs NB Power to make billing adjustments for customers in the event that final rates approved by the Board are different than the rates approved in the interim Order," the EUB wrote in its decision to allow increased rates to take effect in April before the hearing into whether they are reasonable.

Last year following a hearing, the EUB approved only two-thirds of an 8.9 per cent rate increase requested by the utility.

N.B. Power's application is the first seeking approval for rates that cover more than one year.

New rules allow that option.

The utility has filed more than 400 exhibits in support of its application and answered several hundred written questions submitted in advance of the hearing by other interested parties.

Those include the industrial forest company J.D. Irving Ltd., the province's three municipal utilities, the community group Human Development Council, public intervener Alain Chiasson and the EUB itself.

The contruction of the Mactaquac dam lead to the creation of the headpond waters. Waters that Heath Canada says can lead to mercury poisoning in fish and their food following their creation.
The contruction of the Mactaquac dam lead to the creation of the headpond waters. Waters that Heath Canada says can lead to mercury poisoning in fish and their food following their creation.

N.B. Power is planning to spend $70 million on the Mactaquac Dam refurbishment project this year, $295 million next year and billions more in future years. The utility says higher rates will help keep its debt from ballooning because of it. (Shane Fowler/CBC)

Originally meant to be held in February the hearing has been unexpectedly delayed twice.

Last fall, just days before N.B. Power was supposed to file its application for new rates, the New Brunswick government changed its mind on debt targets the utility should meet.

That caused a 72-day delay in the application being submitted as the utility calculated the impact of that change on its budgets. 

That forced the hearing to move from February to May, but it had to be cancelled again after a car accident involving the EUB's acting chair, Stephanie Wilson.

Legislation requires a three-person panel to conduct a hearing, and at the time the EUB was down to only three members following delays by the province in filling board vacancies.  Wilson's absences made it impossible to proceed.