EUB slashes proposed NB Power rate hike for residential customers

A proposal by NB Power to impose a range of rate increases this year on different customer groups has been struck down by New Brunswick's Energy and Utilities Board.

Instead, every group will have to be charged the same increase about 2.49 per centwhen rates change in the next two weeks,likely on Aug. 1.

That's good news for NB Power's residential consumers, who were in line for a 2.9 per cent increase and will now pay less than expected, but bad news for commercial customers, who had faced a proposed increase of only 1.7 per cent.

"It's quite disappointing," said Louis-Philippe Gauthier of the Canadian Federation of Independent Business, which has pushed for a fix to inflated commercial power rates in New Brunswick for several years.

"For small business, it means they will be paying more than what the cost of electricity actually is."

The EUB has long asked NB Power to keep rate increases to its commercial customers to a minimum to fix inflated prices charged to the groupcompared to other customers.

But following a rate hearing in May the board concluded the information it has been using to divide up costs and set rates among various customer groups has become unreliable.

In the ruling released Tuesday morning, it said it "lacks confidence in the precision"of the data NB Power has been providing and wants to see updated studies in advance of next year's rate hearing before resuming the approval of "differential"rate hikes that allow commercial customers to receive smaller increases.

Currently, commercial customers of NB Power can pay up to 20 per cent more for electricity than residential customers and substantially more than industrial customers.

Concerns about alternative power projects

On other issues, the EUB expressed concern with NB Power financing various research projects into alternative power sources such ashydrogen from seawater, small nuclear reactors and other initiatives.

The boardsaid it would not disallow a planned $250,000 investment this year to study whether a proposed new iron plant in Belledune could help fuel its nearby coal-powered generating station but warned it would not necessarily approve future spending.

"It is difficult for the Board to determine whether these projects meet a minimal threshold of acceptable risk to ratepayers," it wrote.

"This [$250,000]approval should not be construed as allowing future spending associated with these projects. Any spending on research and innovative projects in future years will be subject to Board review."

Deferral account rejected

In a split decision, the board also disallowed a proposal by NB Power to set up a deferral account to run various energy-efficiency programs for homeowners and businesses.The deferral account would allow NB Power to spend money on the programs but delay accounting for the expenditures on its bottom line until future years.

Four of five EUB members who heard NB Power's rate application expressed concern that the deferral account would disguise the utility's true financial condition and ruled against it. The fifth EUB member, John Herron, endorsed the idea in a dissenting opinion but was overruled by the others.

The EUB ordered NB Power to take all of its rulings into consideration, recalculate rate increases for each customer group and resubmit the numbers for a final approval, a process that normally takes less than a week.

The EUB said it would then set a date for increases to take effect.That will likely be Aug.1.