NB Power seeks average 2% rate hike for all customers next year

NB Power wants to increase its rates by an average of two per cent across all customer classes next year, with residential customers facing the largest proposed hike.

Under the utility's general rate application, filed with the Energy and Utilities Board (EUB), residential customers would pay 2.33 per cent more, starting on April 1.

"General service 1" customers, which includes most small businesses, some schools and community groups, would see the lowest increase of 0.90 per cent.

All other customers, such as large and small industrial as well as wholesale, would pay two per cent more.

We recognize that any increase can be a challenge for our customers.- Darren Murphy, NB Power

If approved, it would be the first time in nearly a decade different customer classes would receive different increases based on a methodology approved by the EUB in May.

The differential rate increases are "intended to promote greater fairness among the rate classes based on the cost to serve each customer class," NB Power said in a statement issued on Tuesday.

Cites long-term benefits

"This increase would allow the utility to continue repaying debt while also investing in outage prevention and customer reliability, and maintain the lowest electricity rates in the Maritime provinces," the statement said.

Existing rates will be insufficient to meet the utility's revenue requirements of more than $1.7 billion for the 2017-18 fiscal year, according to the EUB application.

"We recognize that any increase can be a challenge for our customers. That is why we are cushioning the impact by continuing to invest in energy efficiency programs that provide cash rebates and other incentives for NB Power customers to reduce their energy use," chief financial officer and vice-president of corporate services Darren Murphy said in the statement.

"Modest increases now will help us make financial progress on our debt, which will protect our customers over the long term."

EUB to hold hearing

The utility hopes to pay down some debt in advance of the significant costs that will be associated with the future options for the Mactaquac generating station, which is expected to reach the end of its life by 2030.

Options being considered include removing the dam, building a generating station on the opposite site of the river, leaving the dam in place without power generation, or partially rebuilding and repairing the existing dam to extend its life.

NB Power also anticipates "some necessary investments" in the non-nuclear side of the Point Lepreau generating station to improve performance and reliability.

The EUB will hold a rate hearing in the new year.

Meanwhile, NB Power will continue to pursue internal cost savings and continue to invest in customer reliability through advanced grid technology, infrastructure projects, vegetation management and greater adoption of clean energy on our grid, said Murphy.