N.B. Power wins long fight to raise rates 19 per cent over 2 years

N.B. Power's headquarters in Fredericton. The utility, which applied to raise rates on customers by $320 million over two years, has been awarded all but a few million of that by the Energy and Utilities Board. (Shane Fowler/CBC - image credit)
N.B. Power's headquarters in Fredericton. The utility, which applied to raise rates on customers by $320 million over two years, has been awarded all but a few million of that by the Energy and Utilities Board. (Shane Fowler/CBC - image credit)

N.B. Power has won approval to keep charging rates that it increased on customers by an average of 9.25 per cent on April 1, and to repeat the increase next April, with only minor modifications.

In an oral decision released Friday morning, the New Brunswick Energy and Utilities Board granted N.B. Power almost everything it asked for in an application the company launched late last year to raise its rates significantly over two years.

The two increases ruled on by the board include the retroactive approval of rate increases awarded to the utility on an interim basis last April of an average 9.25 per cent, including 9.8 per cent for residential customers.

A second identical increase, to take effect on April 1, 2025, was lowered marginally but only by a fraction of one per cent.

EUB board member Christopher Stewart expressed frustration Monday that the federal government was not participating in the hearing to determine the cost of federal clean fuel regulations.
EUB board member Christopher Stewart expressed frustration Monday that the federal government was not participating in the hearing to determine the cost of federal clean fuel regulations.

Board member Christopher Stewart presided over a three-person panel that sat on and off all summer to review N.B. Power's rate request. Stewart delivered a final decision Friday. (Ian Bonnell / CBC)

The board's ruling was delivered orally by utilities board member Christopher Stewart, who presided over hearings on the application during the summer.  He said more detailed written reasons will be issued later.

"The Board is issuing this decision on an expedited basis to give ratepayers certainty about their electricity costs and to provide N.B. Power information necessary to plan its business and operational activities," said Stewart.

N.B. Power's Chief Financial Officer Darren Murphy (left) told the utility's rate hearing the company should be allowed to keep unbudgeted revenues that have turned up at its rate hearing rather than reduce its rate increases.
N.B. Power's Chief Financial Officer Darren Murphy (left) told the utility's rate hearing the company should be allowed to keep unbudgeted revenues that have turned up at its rate hearing rather than reduce its rate increases.

N.B. Power president Lori Clark, and vice-presidents Darren Murphy, left, and Brad Coady, right, testified in June in support of the utility's rate request. (Pat Richard/CBC)

Although broadly granting N.B. Power most of the $320-million rate increase the utility requested over two years, Stewart noted a couple of exceptions. 

He said a request by the company to unify monthly service charges between rural, urban and seasonal residential customers has been rejected.

In one criticism Madsen said NB Power has charged $180 million too much depreciation on its transmission and distribution assets making its financial condition seem worse than it is.
In one criticism Madsen said NB Power has charged $180 million too much depreciation on its transmission and distribution assets making its financial condition seem worse than it is.

N.B. Power tried to merge its cheaper urban, and more expensive rural and seasonal monthly service charges, into one category but the EUB has rejected the idea. (N.B. Power/Facebook)

"The board orders N.B. Power to maintain the distinction between rural and urban residential customers," said Stewart.

That does not affect the overall value of the increase to the utility but it will require raising the current $28.27 per month charge on rural and seasonal customers by about $1.33 per month. That will be offset by urban residential customers having their monthly service charge lowered by $1.29.

Stewart said the board will consider merging the three groups in a future "rate design" hearing.

In a second variance from N.B. Power's application, Stewart said the board had decided to approve 3.7 fewer "forced loss," or breakdown days, at the Point Lepreau nuclear generating station next year than the utility had requested.

Stewart said N.B. Power will have to calculate how much that change reduces the April 1, 2025, rate increase but it is unlikely to move it more than just tenths of one per cent.

Residential customers may not feel that increase, however. Premier Susan Holt has pledged to try to drop the province's 10 per cent sales tax on residential electricity bills by April 1, close to the same amount residential rates are set to increase on the same day.

JDI not happy with board decision

In its ruling, the Energy and Utilities Board effectively rejected the arguments of several parties who participated in the rate hearing and had urged the board to slice deeply into the rate increase request.

Forestry company J.D. Irving Ltd., N.B. Power's largest private-sector customer and the operator of several large sawmills and paper mills, sharply criticized the ruling.

"J.D. Irving Ltd. is very disappointed in today's decision by the New Brunswick Energy and Utilities Board," the company said in a news release.

"Current electricity rates have a massive impact on Irving paper's ability to compete."