Management bonuses reintroduced at NB Power

If NB Power's executives are able to reach 10 performance targets they'll be eligible for bonuses that could amount to up to 25 per cent of their salaries.

The No. 1 target is to ensure that power rates are only increased by a maximum of three per cent annually for the next three years, the company revealed as it released its targets in Fredericton on Wednesday.

But economic realities will determine if NB Power can actually meet that target, said board chair Francis McGuire.

"We're saying to our group, 'We will limit.' Now if the price of oil goes to $200, we probably won't be able to make that," McGuire said.

Other performance indicators include reducing carbon dioxide emissions from seven million tonnes to five million tonnes by 2012. But beyond using more wind power, the board has not provided details on how that will be done or if any coal plants in the province will be shut down.

The inclusion of performance bonuses is a practice that had been eliminated under the previous Conservative government when they were costing the province more than $1 million annually.

But to attract and keep people, the company needs to pay its executives a competitive rate, said board member Ed Barrett.

After salary raises, the company president will be paid up to $400,000 per year and could collect a bonus of up to 25 per cent of that, while the eight other executives will be paid up to $230,000 per year plus a potential bonus of 20 per cent.

"Even if every single bonus was paid to the full amount, our executives will still be under the industry norm," Barrett said.

The compensation is in the mid-range for utilities in Atlantic Canada, Barrett said.

Public reports will be released every three months to outline how the utility is meeting its goals.

Liberal Energy Minister Jack Keir said utilities are facing a challenging time due to increased power demand and crude oil prices, and the new compensation levels are consistent with neighbouring utilities.

"Establishing benchmarks to make NB Power more accountable is in the best interest of New Brunswick ratepayers," Keir said in a written statement. "It allows for the public to monitor and track the performance of its utility, and also encourages efficiency, productivity and transparency."