NB Power has filed for an 8.9-per cent rate increase with the Energy and Utilities Board, which would take effect April 1, 2023, if accepted.
It’s a significant jump in rates that the utility company says is needed due to the rising cost of fuel, high interest rates, inflation and investments.
“NB Power has taken steps to ensure the rate increase is as low as it can possibly be while ensuring the utility can continue to cover its services reliably, safely and confidently to New Brunswickers now and into the future,” Lori Clark, NB Power’s interim CEO, told reporters on Wednesday.
The rate increase translates to about $16 per month or $200 a year for customers. The goal, Clark said, was to keep the increase below 10 per cent.
As the utility continues to grapple with costs and significant debt, it will also be looking at places to save money, which could include layoffs.
“So, we will be looking position reductions at NB Power. Labour is a huge component of our overall costs so there will be a number of positions that will be eliminated as we look for cost reductions and opportunities to reduce costs into the future,” Clark said.
The increase won’t help reduce the utility’s $5 billon in debt, either, but is simply a way to keep up with the costs.
“In future years, we’re looking at what that increase needs to be so we do adequately address our debt situation and ensure the utility is financially sound for the future,” she said. “This year it was important that we focus on covering our costs and not necessarily focus on any profit or earnings level for the utility as well as any significant debt reduction.”
Meanwhile, New Brunswick Premier Blaine Higgs blames the increase on the federal climate policy.
“This shouldn’t be a surprise in the sense of the policies that are being put on us are causing a higher cost for energy in our province and in every province,” said Higgs. “NB Power (is) reacting to that because they really don’t have a choice.”
He said energy costs, like carbon pricing, have been mandated by the federal government and they are going up. But Clark told reporters on Wednesday that carbon pricing has little to do with the rate increase application.
“Very little of that is attributed to the carbon pricing,” she said, saying it more is a result of the price of fuel traded on the global market, impacted by COVID-19, the supply chain and the war in Ukraine.
Even so, Natural Resources and Energy Development Minister Mike Holland says he hopes the various efficiency programs available to New Brunswickers will help offset the impact. He said while the rate is increased, the idea is to reduce consumption, and make homes more efficient.
The government introduced a heat pump program for incomes lower than $70,000.
“This program here is looked at as the equivalent of around $40 a month in savings if you incorporate a heat pump into your home,” he said, speaking to savings that will entirely off set the planned rate increase next year.
NB Power says it plans for the rate increase to last for 2023-24, but there is too much variability to predict what rate could come for 2024.