Saturday price hike for electricity in N.B. a projected 4.8 per cent
New Brunswick electricity prices will be increasing by 4.8 per cent at the end of this week, after changes ordered by the New Brunswick Energy and Utilities Board knocked $50 million off a rate request made by N.B. Power.
In a letter to the EUB, responding to a series of changes required by the regulator following a two week hearing in February, N.B. Power's Stephen Waycott said making alterations will lower the rate increase from the 8.9 per cent applied for, to 5.7 per cent. An additional rebate due to customers from another issue that also takes effect on April 1 will further reduce new charges customers face.
"The combined impact … is that N.B. Power's in-province customers will see an average increase in electricity rates of 4.8 percent in 2023/24," wrote Waycott, who is N.B. Power's director of corporate compliance and regulatory affairs.
Every one per cent change in rates is worth just under $16 million per year to the utility.
For a residential customer with an annual power bill of $3,000, the new prices will add $144 plus HST in yearly charges. Separately, the utilities board also approved a $1 per month increase to customers who rent water heaters from N.B. Power, which would add to that rate increase amount.
The board still needs to grant a final approval to the changes, but that is mostly a formality. Municipal utilities in Saint John, Edmundston and Perth Andover are expected to adopt the same percentage increases for their own customers.
N.B. Power originally applied for an 8.9 per cent increase in its rates in early October, hoping to have it approved for the beginning of its next fiscal year, which begins on April 1.
It's application was challenged aggressively over eight days at hearings in February, especially by its largest private sector customer, J.D. Irving Ltd.
The forestry, transportation and consumer products company hired three lawyers to fight the increase. The group successfully challenged N.B. Power's use of stale data in the case it was making for higher prices.
N.B. Power had been claiming the high prices for commodities it uses to run its largest generators would attack its bottom line in the coming year.
"In a single year, the cost of fuel and purchased power necessary to supply customers in New Brunswick has increased by $102.8 million," N.B. Power president Lori Clark told the hearing on its opening day.
"This has occurred largely due to market price increases for natural gas, heavy fuel oil and electricity."
But those claims were based on old prices from months earlier in June, 2022.
During hearings, the utility acknowledged it had fresher data internally that showed some prices had moderated, and prospects for exporting power had improved significantly.
In a preliminary ruling two weeks ago, the EUB told the utility it needed to use the more up-to-date numbers.
"The Board is not satisfied that the rates, as applied for, are just and reasonable," it wrote in demanding changes.
"N.B. Power is ordered to refile its 2023/2024 test year budget … and the resulting rates."
The new calculations show that despite losing one third of the requested rate increase, N.B. Power's projected profit for the coming year has more than doubled to $30 million by using the new figures.
N.B. Power did not immediately respond to a request for comment about the changes.
