Energy plan's industrial rates unfair: CFIB

The Canadian Federation of Independent Business says the provincial government's plan to lower electricity costs for big industry is an unfair subsidy that will drive up costs at NB Power and electricity prices for other customers.

"We want to see an environment created in New Brunswick that allows all businesses to flourish, that sets up all businesses to succeed. And that only happens when all businesses are being treated equally and fairly," said Leanne Hachey, the group's vice-presidentof the Atlantic region.

'Small businesses are already subsidizing other rate classes. We're asking for equal treatment.' Leanne Hachey, Canadian Federation of Independent Business

Under the province's new Energy Blueprint, announced last week, NB Power will be required to buy renewable electricity generated by big industrial companies at a high price set by legislation and then sell it back to those companies at significantly lower rates.

For example, the Crown corporation would have to pay J.D. Irving Ltd. 9.5 cents per kilowatt hour for electricity generated at the company's St. George dam and sell it back for use in J.D. Irving's mills at an industrial rate of less thanseven cents.

That one transaction will cost NB Power more than $1 million a year, but the province hopes the program will eventually generate millions more for a variety of big companies, helping them pay their power bills.

"What we're trying to do with that program is make sure that intensive users of energy have competitive pricesthat's what it boils down to," said New Brunswick Energy Minister Craig Leonard.

The plan will bring qualifying large industrial companies' electricity costs in line with their Canadian competitors, he said.

It will "result in energy cost competitiveness and stability to qualifying large industrial customers. This will ensure these core businesses remain in New Brunswick, providing much needed employment and economic opportunities to our local communities and suppliers," the energy plan states.

"In addition, procuring a supply of less-volatile renewable electricity from large industrial renewable energy purchase program participants and maintaining base load industrial customers will assist NB Power in maintaining stable rates for all its customers," according to the plan.

But Hachey contends benefits to industry will have to be paid by other NB Power customers, many of which already pay too much.

In 2007, NB Power acknowledged in evidence presented to the New Brunswick Energy and Utilities Board that it was undercharging large industrial clients by $30 million a year already and overcharging commercial customers, including small businesses, by $40 million to make up the difference.

Hachey said that problem still exists and government should fix it, not develop ways to give industry new breaks. "It's absolutely unacceptable," she said.

"Small businesses are already subsidizing other rate classes. We're asking for equal treatment."

Leonard said the plan also has environmental benefits. Only renewable energy, such as hydro, wind and biomass-generated electricity will qualify for the program, which will help the environment as companies take advantage of the program, he said.

"Using more electricity generated from renewable sources reduces our need to burn fossil fuels for our electricity and has an overall positive impact on emissions and other environmental concerns," the plan states.

The idea was first raised in a 2010 pre-election energy document released by the New Brunswick Conservative Party, which acknowledged that paying industry to produce green power would not come cheap.

"It must be recognized this will occur at the expense of increased cost to NB Power," warned the document.