Energy and Utilities Board flexes muscles in NB Power rate ruling

Consumers can thank New Brunswick's suddenly muscular Energy and Utilities Board (EUB) for power rates going up only 1.6 per cent tonightatmidnight, after it rejected two attempts by the utility to have them set higher.

The rate change has been months in the making but was finalized just in the last two weeks during a rare public back-and-forth between NB Power and the EUBthat led to rejections of two separate NB Power rate proposals by the board a sign of who is now in charge of the utility.

• NB Power rate increase set at 1.6%

"It might be too early to characterize the relationship," said New Brunswick public intervener Heather Black, who watched the EUB flex some of its new regulatory brawn with NB Power over the rate hike.

"There is a bit of a change in the power dynamic and it will be interesting to see how that plays out."

Tonight'srate hike began more than 10 months ago onNov. 21when NB Power applied for a twoperincrease that it wanted to take effect onJuly 1.It was the first time in seven years the utility needed the EUB's approval for an increase, following beefed up powers given to the board by the former government of David Alward.

Evidence supporting the increase was filed with the EUB by NB Power through the winter and spring and a full rate hearing was held over several days in Fredericton and Saint John in June to consider it all.

But the hearing began far too late to meet NB Power's requestedJuly 1target date for a rate hike given all of the issues raised and the matter went quiet as the board considered what to do.

Finally, on Sept. 10, the EUB issued a preliminary decision, saying it was prepared to award a rate increase to NB Power onOct.1, but was unsatisfied with $4 million in costs it said NB Power was unable to justify at the rate hearing.

It asked the utility to recalculate its rate increase with the $4 million removed, triggering a series of exchanges between the two.

On Sept. 15, NB Power vice-president Lori Clark wrote back to the EUB saying since the rate increase was now to take effect three months later than applied for,a twoper cent rate increase still made sense.

"NB Power's revised rate increase calculations indicate that a uniform rate increase of 2.0 per cent is required assuming an effective date ofOctober 1, 2015," she wrote.

Two days later, the EUB wrote back to NB Power with a flat no.

"Unfortunately the information filed with the New Brunswick Energy and Utilities Board is not satisfactory," wrote the board's chief clerk Kathleen Mitchell.

Mitchell told Clark that NB Power had to calculate the removal of the $4 million as ofJuly 1 to mirror its original rate application and told the utility to redo its math.

Clark wrote back and said removing the $4 million as ofJuly 1would result in a rate increase of 1.6 per cent.But she argued an increase of 1.6 per cent made no sense because the rate hike was to begin onOct.1, notJuly 1.

Clark then said a rate increase of 2.2 per cent onOct.1would raise the same amount of money as an increase of 1.6 per cent onJuly 1and last week put 2.2 per cent forward for approval instead even though it had asked for twoper centa week earlier.

The board said no again andon Mondayset the increase at 1.6 per cent.

The EUB does not comment on its decisions, but Black says if NB Power applied for a rate increase too late to have it approved byJuly 1, that is generally considered to be its own fault.

"You live with the timing of your application," said Black."In my view, you could see pretty far in advance that these things were not going to finish up until the fall."

The EUB has still not issued a full written decision giving its reasons for the timing and size of the rate increase, but it has sent a clear message it plans to take its new role as NB Power's independent supervisorseriously.