NB Power’s proposal to scrap the urban and rural service charge split would mean a 15 percent monthly price increase for some customers.
The proposal was prompted by local government reforms in New Brunswick, according to NB Power staff who appeared before the province’s Energy and Utilities Committee last week.
NB Power rate design expert Veronique Stevenson said people who were within city limits before these reforms came into force in January 2023 would now pay the cheaper city rate.
Households that are moved into the city limits in 2023 will technically be classified as in the same urban area, but Stevenson said they will still be paying the higher rural rates.
NB Power has missed its profit targets by a total of $252 million each of the past four years, and this year reported to both the Energy and Public Utilities Commission and the Treasury Department that profits were ahead of budget projections.
NB Power has missed its profit targets by a total of $252 million each of the past four years. This year, the company reported to both the Energy and Public Utilities Commission and the Ministry of Finance that its profits were ahead of budget projections. (Radio-Canada)
That’s because moving these households onto urban rates would mean a significant loss of revenue for the utility, she said.
The state-run company’s general rate application lists the current rates for urban and rural areas as $24.57 and $26.96 per month, respectively. There is also a “seasonal” category, which is also charged $26.96 per month.
NB Power is proposing to combine the categories into a flat rate of $28.97.
However, this means that for the roughly 51 percent of customers who were previously billed in the urban category, monthly service charges will increase by 15.1 percent, or $3.70.
Randy Hatfield worries that the monthly service fee increase will disproportionately affect people on low incomes. (CBC)
Meanwhile, the remaining customers in the rural and seasonal categories will pay a 4.9% increase, or $1.31 per month.
“So does NB Power’s proposal mean that urban customers are being asked to pay higher rate increases to make up for lower rate increases for rural and seasonal customers?” EUB general counsel Abigail Herrington asked the committee on Thursday.
Stevenson agreed that if the changes are approved by the board, customers in urban areas “will certainly see a slight rate increase.”
“This only applies to service charges, so customers who use less energy will see a higher increase in their bills,” Stevenson said.
Shelley Petit of the New Brunswick Coalition of People with Disabilities says the responsibility for setting accessibility legislation and enforcing penalties should lie outside of government.
Shelley Petit of the New Brunswick Coalition of People with Disabilities said the increase will be hard for people with disabilities to swallow because many of them are on a fixed income. (Nipun Tiwari/CBC News)
Randy Hatfield, executive director of the Human Development Council of Saint John, is concerned the disparity will disproportionately affect low-income clients.
“For low-income earners, a lower monthly flat rate is better – as low as possible,” he said, “because they tend to use less electricity and have some control and some decision-making over how much they use.”
He also pointed to a report by Robert Knecht, an independent consultant hired by public interventionist Alain Chiasson, which said an overall increase across all categories was not justified.
Shelley Petit, president of the New Brunswick Coalition of People with Disabilities, also worries about how the changes will affect people’s bills and access to basic needs.
In one criticism, Madsen said NB Power overstated depreciation expenses on its transmission and distribution assets by $180 million, making its financial position appear worse than it actually was.
NB Power is proposing to combine urban, rural and seasonal monthly service charges into one category. (NB Power/Facebook)
“The price increase is reportedly only a few dollars – about the cost of one cup of coffee a day – but we cannot afford to go out and buy coffee,” Petit said in a statement.
“Already many people with disabilities are only eating what they get from food banks. They are being forced to forego medical treatment and medications that are not covered by insurance.”
She worries that ultimately people on fixed incomes won’t be able to afford the proposed increases.
When asked why NB Power spokesperson Dominique Couture would pass on the bulk of the increase to urban customers, he directed CBC News to evidence of NBP11.41.
However, Exhibit NBP11.41 does not provide rationale but shows the increase in each category and its impact on the bill.
CBC News reached out to the provincial Ministry of Local Government for comment on Friday but did not receive a response.
