New Brunswick residents could see big increases in their power bills over the next few years.
NB Power has asked the Energy and Utilities Board for 9.8 per cent residential rate hikes in each of the next two years.
“We understand that raising rates is not something anyone wants, particularly when customers are already paying more for their everyday needs like housing, gas and groceries,” president and CEO Lori Clark said in a news release.
“However, to continue to provide the reliable electricity customers need in the face of unprecedented challenges and change, an increase in rates is required to meet customer demand and prepare for the future. This is not business as usual.”
NB Power has also requested a three per cent increase over 12 months through a Variance Account Recovery to help cover higher-than-expected costs, primarily due to an unplanned outage at Point Lepreau.
The Variance Account Recovery filing represents a calculation of actual reasonably incurred costs and revenues versus what was projected based on the balance of the account as of a particular date.
If both increases are approved in full, the average residential power bill would increase by nearly $25 monthly in 2024-25.
The rate hike comes as the utility looks to achieve a target of 80 per cent debt and 20 per cent equity by 2029.
NB Power’s debt stands at more than $5 billion and its debt-to-equity ratio is at 94 per cent, according to the province’s auditor general, who is concerned about the utility’s ability to self-sustain.
The utility is also facing significant capital investments in the future, including the refurbishment of the Mactaquac Generating Station, which is expected to cost more than $3 billion.
Clark said the utility has cut about $50 million from its operations in the last year and plans to cut an additional $55 million over the next two years.
But she said the reductions are not enough to offset the rising cost of producing energy for New Brunswick.
“We know it’s our responsibility that when we have a rate increase we look internally first to ensure we’ve done everything we possibly can to minimize the rate impact on our customers,” said Clark.
“We are leaving no stone unturned as we look at every aspect of our operations and make the necessary changes to manage our costs and improve our financial situation, build equity and keep rates as low as possible for New Brunswickers.”
Clark said they know a rate hike like this will have a significant impact on New Brunswickers, especially those facing payment difficulty.
“We want to work with our customers to ensure that we are helping them manage their payment arrangements, getting them through the energy efficiency programs that we offer,” she said.
If approved by the EUB, the potential new rate would come into effect no earlier than April 1, 2024.
NB Power maintains that it will still have a lower rate than Nova Scotia and Prince Edward Island, even with the potential increase.
