EUB hearing room splits on endorsing N.B. Power's rate hike - Action News
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New Brunswick

EUB hearing room splits on endorsing N.B. Power's rate hike

N.B. Power and it's single largest customer continued their regulatory brawl over the utility's rates during closing arguments in front of the New Brunswick Energy and Utilities Board on Friday with other parties falling in behind both sides.

Public intervener and municipal utilities offer tepid support, business groups voice opposition

A side profile of a man with black-rimmed glasses flipping through papers
N.B. Power lawyer John Furey apologized after taking two hours to make his final argument in favour of the rate hike, but said he felt it was important to address every issue. (Ed Hunter/CBC)

N.B. Power and it's single largest customer continued their regulatory brawl over the utility's rates during closing arguments in front of the New Brunswick Energy and Utilities Board on Friday, with other parties falling in behind both sides.

In a comprehensiveaddresshe apologized for taking two hours to deliver, N.B. Power lawyer John Furey said the utility had proven its need for an 8.9 per cent increase from New Brunswick customers.

"N.B. Power submits that the evidence demonstrates that the revenue requirementis reasonable and should be approved by the board," he said.

But speaking directly after Furey, J.D. Irving Ltd. lawyer Nancy Rubin urged the EUB to grant little of what is requested, based on the case the utility put forward.

A woman in formal business attire bites her nails while holding a pen and looking forwards.
J.D. Irving Ltd. lawyer Nancy Rubin built a case for a 0 per cent rate increase based on updated N.B. Power budget numbers but acknowledged that would not be in the public interest. She suggested a small increase be granted and applied to N.B. Power's financial obligations. (Jonathan Collicott/CBC News)

"The evidence in this proceeding suggests that the 8.9 per cent rate increase could be entirely or largely nullified,"she said, just seconds into her own address.

The two-week rate hearing has been turning on the issue of how to deal with updated budget numbers requested by J.D. Irving Ltd. and reluctantly supplied by N.B. Power just this week.

The new projections seemed to show the utility'srevenues and expenses for next year had improved from when it first prepared a budget and asked for such a large rate increase.

A side profile of a man with a beard looking down
Acting Public Intervener Rick Williams endorsed a slight cut in the rate hike to 7.9 per cent, but expressed concern about N.B. Power getting much less than that. (Ed Hunter/CBC)

But the same numbers also showed N.B. Poweris suffering huge and unexpected financial losses in the current year that might justify a big increase, even if next year's budget no longer does.

In his address,Furey urged the EUB to ignore the new information because it updates only part of N.B. Power's budget. Alternatively, he said, if the update is to be considered, it should involve the entire update, including heavy losses being experienced in the current year.

"The financial position of N.B. Power has deteriorated significantly in the second and third quarters of [this]fiscal year," he said.

Piles of white paper documents on a white table
The rate hearing involved more than 400 documents being placed in evidence. A decision is not expected for several weeks. (Jonathan Collicott/CBC)

Noting that the rate increase request was made before a December breakdown of the critical Point Lepreau nuclear generating station helped push debt levels at the utility above $5.3 billion, $380 million higher than last year, Furey said an even larger increase would likely have been asked for "if the current financial information were available to N.B. Power at the time it filed this application."

That position gained some sympathy from acting public intervener Rick Williams who suggested the new evidence should not be used "due to the poor performance" occurring this year.

A man wearing glasses and a suit and tie. There are people sitting behind him.
Len Hoyt represented Twin Rivers Paper during the hearing and, like J.D. Irving Ltd., asked for the requested increase to be scaled back. (Jonathan Collicott/CBC)

Williams did question some expenses and suggested a 7.9 per cent increase might be sufficient for next year, but accepted that the overall financial health of N.B. Power is an urgent problem that needs to be addressed.

Scott Stoll, a lawyer representing New Brunswick's three municipal electric utilities in Saint John, Edmundston and Perth-Andover, said his clients do not like it, but support N.B. Power gettingevery penny it has asked for.

A woman with medium blond hair and wearing a blue blazer
Heather Black is one of three EUB members who will rule on N.B. Power's rate increase. She said evidence heard in the case 'paints a sobering picture' of the utility's finances. (Ed Hunter/CBC)

"The last thing anyone wants is an 8.9 per cent rate increase," said Stoll.

"Reluctantly, we view the risk of further deterioration of N.B. Power's financial state as too great to recommendany reduction in the requested increase."

But on the other side of the issue, Twin Rivers Paper and the Canadian Federation of Independent Business sided with Irving in asking for a reduction of some kind.

A man in a suit sits at a table with a microphone infront of him.
Energy and Utilities Board chair Francois Beaulieu said he is aware of N.B. Power's desire to have new rates in place by April 1, but said given the complexities of the issues involved that might not happen. (Jonathan Collicott/CBC)

Rubin would not give a figure of what J.D. Irvingconsiders reasonable for an increase, except to say 0 per cent is probably too low.

Francois Beaulieu, EUBchair said, he is aware of N.B. Power's desire to have new rates in place by April 1, but said given the complexities of the issues involved that might not happen.

"We are going to work diligently but there is a lot of material to review," he said.