NB Power is knocking one per cent off the proposed 8.9 per cent rate hike it set out in October after realizing a windfall in the Variance Account Recovery filing today.

The move will bring proposed rate hikes to 7.9 per cent, resulting in a $14.50-per-month increase from current bills for the average monthly customer, as opposed to the previously projected $16-per-month increase.

Following changes to the Electricity Act in 2021, the utility was granted the regulatory mechanisms to allow it to recover variances in revenue and supply forecasts, putting it in line with other provinces.

The Variance Account recovery filing resulted in a $28.6 million credit to its accounts and, in turn, a proposed reimbursement of $15 million to customers this year. If approved, the new rate hike will come into effect on April 1st, 2023, with a rate reduction rider of 0.12 cents per kW/h. It will continue for 12 months.

“I certainly understand what our customers are challenged with these days. The utility was challenged with the same items, although on a much bigger scale,” says Lori Clark, acting president and CEO of NB Power. “So we do recognize that it’s important for the utility to be healthy and to continue to be able to pay down its debt… to be sustainable for the long term for the residents of New Brunswick.”

Since this is the first year the utility has made the filing, and only seven months’ worth of data were available from April to October, the accounts don’t reflect the winter. The utility is reserving the rest of the credit to offset any uncertainty the winter might bring.

Clark said that New Brunswickers who need help paying for power can access the SaveEnergyNB.ca program, and the Enhanced Energy Savings Program that allows New Brunswickers making less than $70 k per year to get an energy audit.

This filing is in addition to the General Rate Application submitted to the Energy Utility Board in October, which was based on future projections. That filing with the EUB proposed an 8.9 per cent increase. Both filings will go through separate processes with the EUB.

The Variance Account Recovery is required to be filed by December 15 each year with the Energy Utility Board. It takes into account costs from the previous fiscal year and establishes a rate rider that is reset on an annual basis.

Rates are set based on forecasts of anticipated revenue, including factors like energy consumption, weather, commodity prices, exchange rates, hydro flow, and supply costs the following fiscal year.

In recent years, NB Power has experienced mainly negative variances that have affected its ability to pay down debt.

Two variance accounts were established to track certain actual costs and revenues that vary from the approved forecasted amounts.

The Energy Supply Cost Variance Account calculates the difference between the actual energy supply cost and the budgeted monthly energy supply cost for in-province energy sales.

The Electricity Sales and Margin Variance Account is the monthly calculation of the actual and budgeted in-province revenue and margin from sales of energy, capacity and renewable energy credits to out-of-province customers.

The calculations made from these accounts resulted in the credit of $28.6 million.

The EUB will issue its decision in early spring.

Alex Graham is a reporter with Huddle, an Acadia Broadcasting content partner.