N.B. Power's Rate Recalculation: A Holiday Toonie?
New calculations by N.B. Power reveal that hundreds of thousands of customers are owed rebates for electricity charges between April and November. However, don't start planning any extravagant holiday vacations just yet. The majority of refunds, especially for residential customers, will barely cover the cost of a single cup of coffee. Alain Chiasson, New Brunswick's public intervener, aptly described the rebate as “not going to be material,” emphasizing that it will be a “very small amount of refund.”
The Rate Increase and the Rebate
Earlier this month, the New Brunswick Energy and Utilities Board made a decision regarding N.B. Power's application to increase its rates by an average of 19.4 percent over two years. This application proposed a 9.25 percent rate increase this year and a matching increase next April. Some customer groups, including residential, wholesale, and industrial customers, faced even higher increases, with a proposed 9.8 percent hike in each year.
The utilities board, however, disallowed certain budget items in its November 8th decision. This prompted N.B. Power to recalculate the rate increases, removing the disallowed amounts. These recalculations show that the two 9.8 percent increases for residential customers will be lowered to 9.7 percent increases, retroactive to April 1st.
This adjustment necessitates refunds, as N.B. Power has been charging residential customers at the higher rate since April. The utility is legally obligated to pay back the difference. N.B. Power's CFO, Darren Murphy, affirmed the company's commitment to returning the full amount, stating, “We will ensure that customer bills are adjusted for whatever final decisions are rendered. Customers will not be harmed.” The public intervener, Chiasson, corroborated this, asserting that N.B. Power must issue the refunds regardless of their size: “Yes, they have to still make good on that.”
Calculating the Refunds
The difference between a 9.8 percent and a 9.7 percent rate increase on an average pre-increase residential bill of $200 (excluding HST) is approximately 20 cents per month. Over eight months, this translates to an average refund of about $1.60, plus HST. Commercial, industrial, and municipal customers are also eligible for the 0.1 percent refund. However, N.B. Power spokesperson Dominique Couture stated that the utility cannot yet calculate specific rebate amounts because the EUB hasn't formally approved their rate recalculation. Couture confirmed that, “Once approved by the [New Brunswick Energy and Utilities Board], we will communicate any changes to customers.”
The Impact on Businesses and Municipalities
Saint John Energy, a significant electricity purchaser from N.B. Power, remains uncertain about potential refunds and whether these would be passed on to its customers. They cautiously stated that they “will await the Board’s order before determining next steps.”
The Bottom Line: A Few Dollars, Big Implications
Ultimately, the financial impact of this refund is small for most residential customers – a mere few dollars. While the amount might seem insignificant individually, the implications are broader. It highlights the complexities of utility rate regulation and the regulatory body's role in ensuring fair and accurate billing. The fact that N.B. Power must provide a refund, however small, reinforces the importance of transparency and accountability in public utilities. This whole situation, while resulting in only small rebates, serves as a reminder of the continuous monitoring and adjustments needed to maintain fair pricing in essential services. The impact of this regulatory scrutiny extends beyond individual refunds, influencing how utility companies manage their finances and interact with their customer base. The outcome of the Energy and Utilities Board’s final decision will shape the narrative going forward, not only financially, but also in terms of public confidence and regulatory effectiveness. The upcoming approval from the New Brunswick Energy and Utilities Board will determine the exact figures and the final impact on New Brunswickers' electricity bills. We will keep you updated as more information becomes available. This will not only affect this year’s energy bills but likely set a precedent for future adjustments, and further illustrate the balance between appropriate profit margins for NB Power and fair pricing for consumers.
