Listen to this article
Estimated 3 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
N.B. Power is in front of the New Brunswick Energy and utilities board seeking approval to raise its rates by 4.75 per cent this year, but the utility’s plans to follow that with a 6.5 per cent increase next year and another 6.5 per cent increase the year after have been raising their own set of questions..
Randy Hatfield of the Human Development Council questioned N.B. Power executives at length this week on how consumers on low incomes will be able to cope with years of cumulative large increases in power bills.
“When N.B. Power develops its rate proposals and long-term investment plans, how does the corporation take these household affordability pressures into account,” he asked senior vice-president Darren Murphy and chief financial officer Justin Urquhart.
“Why isn’t affordability a more explicit organizing principle?”
Murphy expressed sympathy with those who struggle to pay for electricity.
WATCH | No end in sight for energy rate bumps:
More significant power-rate requests on the horizon, N.B. Power says
The utility is asking for a 4.75 per cent increase to power rates for this year and forecasts rate-increase requests of 6.5 per cent in the next two fiscal years.
But, he said, the utility has little choice but to invest heavily in its aging generation and transmission assets to prevent even higher increases later on.
Murphy said spending now on “improving reliability” is to everyone’s benefit, including those who are “struggling,” and will keep rates from heading to worse places than they are already going.
“Although that, for some people, is a stretch to understand the connection between those two things, I think reliable assets are more affordable and therefore certainly support keeping rates as low as possible,” Murphy said.
Public intervener Alain Chaisson is one of at least three participants at N.B Power’s rate hearing that asked about unexpected revenues the utility is projected to earn this year and next. (Radio-Canada)
For much of the last decade N.B. Power has promoted how its rate increases since 2010 have been kept below the rate of inflation but that took a dramatic turn in 2023 with a 5.68 increase followed by back to back 9.14 per cent increases in 2024 and 2025.
By 2028, under current plans, rates will have increased 50 per cent in six years — nearly five times the expected rate of inflation over that stretch.
On Tuesday, public intervener Alain Chaisson noted that N.B. Power’s next three planned rate increases all “far exceed the consumer price index in all three years.”
Chaisson questioned whether that is reasonable given other economic struggles facing the province.
Since 2023, power rates in New Brunswick have been on a trajectory to increase 50 per cent by 2028, more than four times the expected rate of inflation in those years. (NB Power)
“Electricity is a basic necessity,” he said. “People need electricity and indeed in winter may need it to survive.”
Justin Urquhart, N.B. Power’s chief financial officer, conceded those points, but he and Murphy defended the utility’s need for more money to fix its own multiple problems.
“It is not the utilities’ single accountability to address those,” Murphy said about solving affordability issues faced by some customers.
