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New Brunswick government reaches deal with Enbridge Gas

N.B. and Enbridge Gas settle multi-million dollar lawsuits
WATCH ABOVE: N.B. and Enbridge Gas settle multi-million dollar lawsuits

Premier Brian Gallant said New Brunswick and Enbridge Gas have reached an agreement, ending the company’s multimillion-dollar lawsuits against the provincial government.

Gallant said the lawsuits could have cost New Brunswick taxpayers $800 million.

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The premier says the financial risk would have hindered the province’s ability to invest in education, health care and the economy. Gallant says he’s looking forward to moving forward and building a strong relationship with Enbridge.

“We believe there are many ways we can cooperate together to ensure that we have economic growth here in New Brunswick,” Gallant said.

READ MORE: Enbridge Gas New Brunswick seeks damages in lawsuit against province

In 2011, the previous government passed a bill that altered the terms of the company’s original contract that was signed in 1999. The government noted that since 2012, Enbridge significantly scaled back on infrastructure investments in the province.

The deal also renews the company’s general franchise agreement with the government.

New Brunswick Enbridge Gas general manager Gilles Volpé said the agreement also caps residential rates at three per cent increases per year.

Volpé also said there won’t be rate increases for commercial and industrial customers.

The premier said the government will table the related legislation next week.

“It will define the regulatory deferral account and its method of recovery. It will provide more authority for the Energy Utility Board (EUB) to establish rate classes and make decisions regarding rates.

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“It will limit rate increases for residential customers and freeze rates for commercial and industrial customers for 2018 and 2019,” Gallant said.

Gallant says the legislation will also “prohibit the delivery of trucked natural gas within the distribution area and permit variance account oversight by the EUB,” which would give the company the “flexibility to expand the distribution system or respond to future regulatory rate pressures.”

Volpé says the EUB will have more power and tools to be able to provide flexibility in how it designs its rates and could spread the cost over a longer period of time.

The new legislation will also extend the general franchise agreement for another 25 years, with the option of extending another 25 years. Enbridge could not guarantee capped rates beyond 2019.

The Opposition Conservatives said they’re gathering more information and will speak on the issue sometime next week.

Green Party Leader David Coon says he’s concerned that the deal bypasses the EUB’s regulatory process for the next two years, and said he’s concerned about rate increases in 2020.

“It depends what happens out there overall with gas prices,” Coon said.

“The large industrial consumers or customers are going to have to start putting money into the system on the distribution side, so there’ll be some additional revenue coming into Enbridge that they haven’t had in the past, so we’ll see.”

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He says the deferral account will put pressure on rates.

“We’ll have to see what happens there, but it does underline the need for the premier to follow through on his commitment that the revenue from carbon pricing will be plowed on energy efficiency so the peoples’ gas bills can stay consistent even though rates may go up,” Coon said.