New Brunswick’s largest utility says changes to the Electricity Act last year have allowed it to file an application with the Energy and Utilities Board to have a one per cent reduction in the rate set next year.
In 2021, the province amended legislation to allow for variance accounts.
NB Power created two accounts called the Energy Supply Cost Variance Account and the Electricity Sales and Margin Variance Account.
Variances can be caused by weather, exchange rates, and other factors that either add to the cost of supplying energy or result in a savings. This year, which only accounts for seven months instead of 12, allows NB Power to use $15 million to reimburse customers. The total amount in both accounts is $28.6 million.
Lori Clark, NB Power’s interim CEO, said this is good news for customers.
“The customers will see 7.9 per cent next year, I think that simple (thing), rates have been reduced by one per cent due to changes we’re seeing in the market today — things that are outside of our control,” Clark said during a briefing to reporters Wednesday.
In October, the utility filed an application with the EUB to increase power rates across all classes of customers by 8.9 per cent.
At the time, the utility cited increased costs of fuel, inflation, increased cost to purchase power and many years of lower rates.
It’s considered the biggest rate hike in 15 years, and won’t be enough to reduce the utility’s $5 billion in debt. The legislative changes do not allow for the money to be used for reduction of the debt, and can only be applied to power rates.
However, even with the one per cent reduction, customers’ power bills are still expected to rise just below eight per cent.
Clark said the variance accounts go either way in the upcoming years.
“We’ll be calculating this variance each and every year, around this same time of year, depending on those variables, which are out of our control … then will either be a rate charge or credit,” Clark said.
The EUB is expected to hold public hearings in January on the general rate application and hold further hearings on the variance accounts application in February, according to Clark.