New Brunswick's Crown utility wants approval for electricity rate increases totaling 17.4% over three years, beginning with a 5.5% increase. If regulators sign off, households would see bills rise further as N.B. Power cites aging infrastructure, financial strain, and debt.
Here's what to know
In a filing with the New Brunswick Energy and Utilities Board, N.B. Power asked for permission to approve three years of hikes at once, according to CBC News. The utility said worn generation and distribution assets across the electricity system need maintenance and replacement.
Speaking to reporters, N.B. Power President Lori Clark said the company doesn't believe it can avoid raising rates.
"There's a lot of discussion about N.B. Power's debt and the financial health of the utility, and we're looking to balance all of those things," she said.
She said the current pressure reflects earlier periods when rate increases were too small to meet the utility's needs.
"I would say there have been years in the past where the rate increases have not been as high as they should have been, and we have an infrastructure deficit that we need to address."
More background
Another round of increases would come after several sharp jumps already absorbed by customers. Residential electricity consumption charges have risen a combined 36.4% over four years, which could make a new three-year increase especially difficult for households already stretched by broader living costs.
In applying the increases, N.B. Power said they exceed inflation and that customers would not feel them equally. The utility said low-income households and others already facing financial hardship could be hit hardest.
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Beyond electricity rates, the utility is trying to bring in more money through other fees. That includes about $14 million from water-heater rentals; N.B. Power rents more than 276,000 water heaters, and the proposed increases over three years would range from 27% to 39%, depending on tank size.
Even with higher rates and fees, the utility projects its net debt will reach $10.8 billion after a 62% increase over the three-year period. Much of that increase is tied to long-term lease obligations for a natural gas generating station planned for Tantramar, meaning customers could pay more while the utility takes on more debt linked to fossil-fuel infrastructure.
N.B. Power has formally submitted the application, and the Energy and Utilities Board will decide whether to approve the three-year plan. The utility said the extra revenue would support upgrades to aging assets and stronger financial performance, with a projected $564 million profit over three years from the higher rates.
Where can I learn more?
New Brunswick isn't alone — rising electricity costs and utility decisions are hitting households elsewhere, too.
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