Power rates up, but rebate on way
Energy watchdog orders reduction in NB Power's rate increase; average credit will be $14 per household
FREDERICTON - New Brunswickers are still paying more for their electricity but will see a slight decrease on their bills as the Energy and Utilities Board has approved a 5.9 per cent rate hike -- slightly less than what NB Power had been seeking.
The decision means homeowners will receive a small rebate retroactive to June when NB Power was granted an interim rate increase of 9.6 per cent. That rate then dropped to 6.4 per cent following a settlement over the Orimulsion fuel dispute.
Yesterday's decision to lower the rate even further to 5.9 per cent means the average homeowner will receive a credit of $14. NB Power must contact individuals who no longer have an account with the utility to ensure they receive their rebate.
NB Power must start issuing the rebates by May, the board stated in its decision.
However, customers are still paying nearly $100 more this year for electricity compared to the 2006-2007 fiscal year.
"Obviously I'm pleased, any rate reduction is good for the ratepayers of New Brunswick," said Daniel Theriault, who was hired to represent customers during the board's hearing into the rate request.
However, homeowners may be faced with another hike very shortly. As the board's decision is for the 2007-2008 fiscal year, NB Power could choose to increase rates again as soon as April.
The utility and Premier Shawn Graham have said increases for the next three years won't surpass three per cent, barring unforeseen circumstances, meaning NB Power will not have to appear before the board to justify its increase.
Energy Minister Jack Keir said government is reviewing the decision. Government has up to 30 days to over-rule the board's decision, but Keir has been adamant in the past that NB Power must operate like a business and has criticized the former government for capping electricity rates.
"The EUB's always made some very timely decisions and always used logic with the decisions they've made to-date," he said. "I want to take a look at this and what their logic is."
Some customers are paying more for their electricity following Friday's decision.
The board approved 6.9 per cent increase for large industries. In comparison, small businesses that don't use electricity to heat their facilities will see a four per cent increase.
The different rates are aimed at ensuring one group of customers isn't subsidizing another class of electricity users.
"The principle, that customers should pay their fair share of the cost of the electricity they use, is well established and generally not disputed," the board stated in its decision.
NB Power had argued increasing fuel costs meant it needed to raise rates to cover a revenue shortfall of $112.3 million. However, following months of testimonies, studies and public hearings, the board decided the utility's requirement for increased revenue is $105.8 million.
Darren Murphy, NB Power's vice-president of customer services, said the utility is pleased with the outcome, noting the board acknowledged NB Power has been managing its expenses well.
"The main difference that the EUB has identified is a financial break-even point, which they've identified being lower than what was presented by NB Power," he said.
Murphy said it's too early to predict when NB Power will be seeking its next increase or what that increase will be.
Theriault is also pleased the board has said NB Power should pass along more of its Orimulsion settlement to ratepayers.
Following the $338 million settlement with Petroleos de Venezuela, NB Power announced it would use $47 million to pay the provincial government for costs incurred by the utility. However the board has ruled that the utility must use $18 million of that amount to offset rates over the next 17 years.
"The board has sort of split the difference," said Theriault, who argued the full amount should have been directed towards ratepayers.
David Plante of the Canadian Manufacturers and Exporters said large consumers of electricity have faced consecutive electricity hikes and can't take much more.
However he said government's commitment to cap increases at three per cent does provide some certainty and stability to industries.
"We have seen a further point-five decrease, we weren't expecting a huge amount more and government has committed to cap the rate increase over the next three years," he said.
Opposition energy critic Bruce Northrup said any increase is too much for New Brunswickers, especially as the Liberal government broke its promise to rebate the provincial portion of HST on heating costs.
"It's a government that can't be trusted and I don't mind saying that," he said.
More The News
Search Articles
More CE Network Sites & Partners:
