NB Power rates going up

NB Power 3% Rate Hike Plan outlines higher electricity rates, EUB review, and job cuts via attrition after the Hydro-Quebec deal collapse, aiming debt relief and break-even as Dalhousie generating station nears closure.

New Brunswickers will soon be paying three per cent more for electricity.

NB Power submitted a new rate plan to the government, which calls for the three per cent hike, just as the Graham Liberals had warned would happen if there was no deal with Hydro-Québec at all.

The utility also plans to eliminate about 100 management and administrative jobs through attrition and voluntary retirement, said acting CEO Gaetan Thomas, who has argued that industry must remain with NB Power to stabilize rates.

The job cuts, mostly at the head office, will save about $20 million a year and should allow the utility to break even in the coming year, he said.

We are going at streamlining the operation and pursuing NB Power reform measures, simplifying the operation, and we will be a leaner organization after this staff reduction program.

NB Power currently has a debt of about $4.8 billion, and some have urged the province to form a regional utility to address the burden.

The government had planned to sell most of NB Power's generation assets to Hydro-Québec for $3.2 billion, eliminating much of that debt, but the deal fell apart last month over Quebec's concerns about unanticipated costs, according to Premier Shawn Graham.

On March 24, when Graham announced the collapse of the controversial deal that initiated a caucus revolt and sparked several protests, he warned a rate increase was coming.

Make no mistake about it, rates do have to go up, he had said. But we're asking NB Power to look for efficiencies internally, we're asking them to minimize that.

NB Power can raise rates by up to three per cent without requiring approval from the Energy and Utilities Board, the provincial regulator under the Electricity Act framework. But the government asked the utility to come up with a rate plan.

Although the three per cent increase was no surprise, the government will likely ask the Energy and Utilities Board to review it, said Energy Minister Jack Keir.

If NB Power believes they need that three per cent increase... I understand that. We want them to be able to continue to manage over the next year and continue to run an efficient operation, but the EUB is there to look at those such things, he said.

Keir also said he'd like to see changes that would require any rate increases to be reviewed automatically.

The rate plan was presented to the government, not the Energy and Utilities Board. And one of three deputy ministers now sitting on the NB Power board will likely stay there.

But that won't mean the politicization of the utility, said acting board chairman Ed Barrett.

The government has been very clear to us about its intention to maintain the independence of the board, he said. We understand very well that the government is the shareholder.

NB Power also reconfirmed the Dalhousie generating station will close when its fuel supply runs out next winter. The utility has suggested the government put it up for sale.

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