Newfoundland Power wants to increase electricity rates by an overall average of six per cent, with residential customers getting an even bigger hit.
The utility filed an application with the Public Utilities Board on Friday.
The rate increase, if approved, would be effective March 1, 2013.
The proposed average increase ranges from 0.6 per cent to six cent for commercial categories, and 7.2 per cent for residential customers.
However, Newfoundland Power’s manager of corporate relations, Bob Pike, told CBC News he expects the numbers to change after the company meets with the PUB.
“We have to put everything that we know on the table,” said Pike, adding that the meeting will address the finer details of deferrals, expenses and increases.
“[We’ll] see if there's a different way to do things or if there’s a way to reduce it.”
Newfoundland Power says several factors are driving the need for an increase, including growing fuel costs and the cost of connecting a record number of new homes to the grid.
“We work hard to minimize the impact of rate increases on our customers while balancing the need to maintain and extend the electricity system to provide our customers with safe, reliable service,” Earl Ludlow, president and CEO of Newfoundland Power, said in a news release.
“We remain committed to investing in rural areas of the province while at the same time investing in urban areas where demand for new services continues to grow.”
According to Newfoundland Power, 93 per cent of the electricity the company delivers to its customers is purchased from Newfoundland and Labrador Hydro.
Newfoundland Power says cost increases largely reflect an increase in purchases from Hydro to meet greater usage of electricity.
“Over the past five years alone, we have invested over $350 million in our provincial electricity system,” Ludlow said.
“Establishing a fair and reasonable future return on this investment is another component of this rate increase.”