Power rates could jump by 7% on July 1

Power rates could jump by almost seven per cent effective July 1, independent of any changes that will come from rate mitigation and paying for the Muskrat Falls hydroelectric project.

The figure is at the centre of N.L. Hydro's application for this year's annual rate adjustment,which happens every year on July 1. The corporation has requested a rateincrease of 6.9 per cent, which is a preliminary estimate of the overall customer impact based on discussions with Newfoundland Power, according to the application.

Most customer electricity rates fell by an average rate of 0.3 per cent in 2022, according to Newfoundland Power.

The application, which would have to be approved by the province's Public Utilities Board, carries three main recommendations that could be rejected or tweaked:

• Anadjustment to the rate stabilization planof 0.0496 cents per kilowatt-hour.
  
• An adjustment of 0.015 cents per kilowatt-hour to cost-recovery adjustments.
  
• Keeping Hydro'sproject cost recovery rider, which was implemented last yearto begin cost-recovery efforts for the Muskrat Falls project, at 0.798 cents per kilowatt-hour.

According to a statement from Newfoundland and Labrador Hydro, the increase would raisethe average residential customer cost from about 13.4 cents per kilowatt-hour to 14.3 cents per kilowatt-hour, based on an average monthly usage of 1,235 kilowatt-hours.

Hydro says other costs to consumers, like the monthly basic customer charge of $15.83 per month, arethe responsibility of Newfoundland Power, adding the increase in rates resulting from their application primarily impacts energy charges.

Hydro says the provincial government asked that the corporation not include any Muskrat Falls-related costs in the application for the rate increase. Energy Minister Andrew Parsons outlined the request in a letter dated April 14, the application shows.

"Government asked Hydro to include no additional Lower Churchill Project (LCP) related costs in the upcoming July 1 annual RSP adjustments," the application said.

"Government also indicated that further LCP related rate increases will be more appropriately addressed upon implementation of the rate mitigation plan."

The provincial government also provided Hydro a grant of over $190 million on March 30 for rate mitigation, the application said.

Newfoundland and Labrador Hydro CEO Jennifer Williams told reporters earlier this month that following the completion of testing of the Labrador-Island Link, work to finish the province's rate mitigation plan will likely take a couple of monthsand that another rate application besides the one made in July won't be made in 2023.

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