Energy board grants interim electricity hike

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NB Power expects to start charging more for electricity on April 1, following a Friday decision from the Energy and Utilities Board.

It was the answer the provincial utility was looking for when it made an interim rate hike request to the regulator Jan. 29. The ask was for fast approval on a 9.25 per cent average increase across rate classes, in advance of hearings scheduled in May.

The unusual move would see power bills rise without the normal rate-adjustment process, in which both the utility’s officials and various intervenors make arguments for and against an increase before the board.

The EUB confirmed to Brunswick News it issued an oral decision approving the interim increase, but said a transcript of the Friday hearing was not yet available.

It’s not clear if the interim hike will be for the full 9.25 per cent. Brunswick News asked NB Power to confirm the amount. A spokesperson, Dominique Couture, said the hike factor was not yet determined.

In an emailed statement Friday afternoon, NB Power CEO Lori Clark lamented the need for higher rates in a time of rising household costs. “However, we have applied for this rate increase so that we can continue to provide the reliable, safe electricity customers need during this time of unprecedented challenges and volatility.”

The Jan. 29 application cited an expected revenue shortfall of $33 million if higher power bills went out in July instead of April. This would depress profits this fiscal year to $31 million from $64 million.

NB Power needs those profits to pay down debt, in order to achieve a “capital structure of at least 20% equity” as mandated by its governing legislation. In a report issued in December, auditor general Paul Martin noted the utility’s debt-to-equity ratio had fallen to 94:6 last year.

The provincial government, NB Power’s sole shareholder, has delayed its requirement that management meet its 80:20 target to 2029 from 2027. In practice, it means executives have five years to pay down the equivalent of $1 billion off the corporation’s debt, which sits at about $5 billion in total.

The January interim application pledged NB Power will give the money back to customers, via “billing adjustment,” if the board ends up deciding against its appeal for a permanent increase.

In the last round of hearings, the board cut the utility’s General Rate Application in half after considering the arguments of intervenors.

– With files from John Chilibeck, Adam Huras