New Brunswick's Progressive Conservative Party is applauding the possibility N.B. Power may not be able to raise electricity rates as planned on April 1 even though that may cost the utility $32.6 million in revenue it needs to reach financial targets set for it by the Progressive Conservative government.
"Who would you rather see get the $32.6M? N.B. Power? Or N.B. Families?" the PC party posted on its social media platforms Tuesday about the potential for a delayed rate increase.
N.B. Power has applied for a 9.25 per cent increase that it says it needs to begin on April 1, but a hearing by the New Brunswick Energy and Utilities Board into that request isn't scheduled to start until mid-May because it was submitted more than 10 weeks late.
That, N.B. Power fears, could push a decision on new rates from the EUB out until July 1, which its lawyer John Furey has said the utility cannot afford.
"Even in the most optimistic scenario in which the board is able to render a partial decision which enables the implementation of rates by July 1, 2024, N.B. Power will sustain a negative net impact of $32.636 million," Furey wrote in a submission to the EUB last week.
In posts on X and Facebook, New Brunswick's PC Party said Premier Blaine Higgs 'helped save ratepayers"' by causing N.B. Power to file its rate increase request 72 days late. (PCNB / Facebook)
N.B. Power was operating under a directive from the EUB to file for new rates by Oct. 4 to allow for the submission of evidence for and against the proposal, a full hearing on that collected evidence and a decision, prior to April 1.
However, on Sept. 25, nine days before that October filing deadline, Premier Blaine Higgs signed a cabinet order extending debt targets N.B. Power has to meet by two years, from March 2027 to March 2029.
That significantly lowered the amount of money the utility would need for immediate debt reduction in the coming year and it upended five months of budgeting at N.B. Power which then had to be reconstructed.
Eventually the rate request was filed on Dec. 15, 72 days late.
"The entire GRA (general rate application) filing package, which was largely complete as of September 27, 2023, when the directive was received, must be updated and/or revised to reflect that directive," N.B. Power's chief financial officer Darren Murphy said in an affidavit explaining the delay to the board.
In its social media posts Tuesday the PC party credited Premier Blaine Higgs personally for causing the delay in N.B. Power's application and putting its April 1 increase in jeopardy.
Prominent PC candidate Faytene Grasseschi told followers that the Higgs government 'chose families' when it slowed down N.B. Power's application for new rates. (Faytene Grasseschi/ X)
Premier Blaine Higgs "and the PCNB Government helped save ratepayers from at least some of N.B. Power's massive planned hike," it wrote.
Prominent PC candidate in the riding of Hampton-Fundy-St. Martins Faytene Grasseschi amplified the post on her own platforms and suggested that forcing a delay in N.B. Power's application had been done by the premier and cabinet on purpose.
"The provincial (PCNB) government chose families," wrote Grasseschi.
However, the "massive planned hike" the PC party says Higgs interfered with flows from instructions given to N.B. Power by Higgs in the first place.
In its 300-page rate application, N.B. Power states it needs to generate more than $1 billion in profit over the next five years to meet financial targets it was given in the premier's Sept. 25 directive and that starts with a 9.25 per cent rate increase on April 1 and a second 9.25 per cent increase the following April.
"The Executive Council of the Government of New Brunswick directs N.B. Power to make plans to achieve a capital structure of at least 20 per cent equity by 2029," states the application.
Natural Resources and Energy Development Minister Mike Holland has expressed concerns for several years about N.B. Power's financial condition and has argued for less government interference in its affairs. (Jacques Poitras/CBC)
"The requested [9.25 per cent] increases form the starting point for achieving 20 per cent equity by March 31, 2029."
The Higgs government has insisted for several years N.B. Power needs to improve its financial condition by reducing its high debt levels, a position also taken by New Brunswick's last two auditors general.
Originally in December, Energy Minister Mike Holland said he wasn't happy to see the large increase N.B. Power was asking for but said he supported it taking action to get its finances in order.
"Nobody wants to see something like that, but it is a part of the process of the utility properly putting together a rate increase request," said Holland.
On Wednesday Holland's office did not return messages asking about the PC Party posts crediting the government with slowing down N.B. Power's application.
Doug Williams, executive director of the New Brunswick PC Party said the post was made to counterbalance a CBC article on the issue published last Monday that presented the delayed rate increase only as a problem for N.B. Power, not a benefit to utility customers.
N.B. Power says it needs to turn more than $1 billion in profit over five years to meet 2029 financial targets set for it by the Higgs government, starting with a 9.25 per cent increase this April. (Michael Heenan/CBC)
"The CBC article only chose to focus on "revenue loss" for N.B. Power," wrote Williams in an email.
"PCNB wanted to provide balance to the discussion by highlighting that changing the debt reduction dates for N.B. Power equals more money in the pocket of New Brunswickers."
N.B. Power has applied to the EUB for a special interim rate increase to take effect on April 1 that it says it can refund to customers in whole or in part if the May hearing does not support what it has asked for.
A similar request in 2016 was rejected by the board.
N.B. Power claims without an interim increase it will suffer $32.6 million in lost revenue in April, May and June that it cannot afford to give up.
About half of that would be revenue from residential customers and half from commercial and industrial customers.
The EUB will hear arguments on that application March 1.