Newfoundland and Labrador's consumer advocate plans to oppose Newfoundland Power's proposed rate increase, saying the utility's customers would pay about $35 million more over the next three years it it goes ahead.
Dennis Browne said Wednesday that Newfoundland Power is attempting to increase rates by increasing its own rate of return from 8.5 per cent to 9.8 per cent, which he says would increase its monthly profit from $3 million to $4 million.
"We have to look at it from the profit perspective. How much profit are they reasonably entitled to?" he told CBC News on Wednesday.
Browne's statements come as the Public Utilities Board reviewing Newfoundland Power's rate increase application. The PUB is responsible for regulating Newfoundland Power and approving any rate change. He said it's "troubling" that the rate increase application comes while the federal and provincial government work on rate mitigation deal to prevent electricty bills from doubling once the Muskrat Falls hydroelectric project comes online..
In an emailed statement to CBC News, Newfoundland Power said it's required to file a rate application with the PUB every three years. They say there's been no increase in rate related to their operations since 2016.
"The proposed rate increase of 0.8 percent, or 80 cents on a $100 electricity bill, reflects all changes in our costs, including investment in the electricity system and a fair return on this investment," said Newfoundland Power's statement.
But Browne said 0.8 percent isn't accurate because Newfoundland Power is applying rate decrease credits against the proposed rate increase.
"What they're effectively looking for is a 3.5 per cent rate increase, so they're not telling all," he said.
If Newfoundland Power's rate of return stayed at its current level of 8.5 per cent, he said, rates would actually go down for customers.