Take control of your electricity destiny, says consumer advocate as PUB considers increase

As Newfoundlanders and Labradorians await a decision on a requested rate increase for NL Hydro, they would do best to take the future of their electricity bills into their own hands, the province's consumer advocate says.

"I think consumers have to look after their own bank accounts and their own bills and comes to a reality that they are in control of their own finances," Dennis Browne told The St. John's Morning Show aboutthe proposedrate increase, which Hydroestimates would add an extra $7.60 on every $100 of electricity used.

The Public Utilities Board is still studying the proposed rate increase, which NL Hydro said is needed due to higher electricity costs and a reduction in electricity use, and his office is doing the same, Browne said.

'I don't believe this has happened to them before'

There are a number of factors involved in NL Hydro's application, Browne said.

Oil prices are up, which matters because the fuel is burned at Holyrood to supply electricity to much of the province.

But there's another consideration for NL Hydro: electricity sales have gone flat, and even declined slightly, according to evidence given by Newfoundland Power CEO Peter Alteenearlier this week at the ongoing Muskrat Falls inquiry.

"I don't believe this has happened to them before," Browne said.

The province's population is both aging and declining, which means fewer energy customers over time. But right now, use is decreasing because people are looking at reducing their consumption for example, by installing heat pumps.

Alteen told the inquiry that the usage of heat pumps has gone up about 58 per cent since this time last year, and a government program has set aside $1 million to support their installation.

"It was noted by Newfoundland Power that when Hydro began its musings about the cost of electricity in its rate application last year, they offered that electricity could go to 22.9 cents, and of course if it went in that direction everyone would be scrambling," Browne said. The current rate is 11.391 cents per kilowatt-hour.

That application has since changed considerably, he said, but even the discussion of such an increase appears to have spurred people to install heat pumps.

At the same time, NewfoundlandPower is looking at phasing out energy-saving programs that encourage measures like basement insulation and switching to LED bulbs, Browne pointed out.

"I think that the next generation of (consumer demand management) programs will be more focused on shifting load to off-peak hours and making your energy system less peaky to the degree that it can," Alteen said at the inquiry.

Lower use, higher rates

The result has put the province in a strange position: encouraging people to reduce energy consumption could actually increase electricity bills when Muskrat Falls comes online at a time when reducing energy consumption and fighting climate change is top of mind for many around the world.

When Muskrat Falls was on the drawing board, nobody put into consideration that electricity consumption could go down if strict demand-side management conservation measures were in place, Browne said. The consumer advocate at the time had a report done that said if the savings that would accrue from less electricity use via demand-side management had been considered, there wouldn't have been much cost difference between the island isolated and interconnected options.

"Maybe that's why they didn't consider it," Browne said.

If the proposed rate increase is approved, the increase could be managed by many people through energy conservation measures, he said. Longer term, Browne said, it's time for consumers to take personal action, while acknowledging that many aren't able to make large-scale changes like switching away from baseboard heaters or installing heat pumps.

"Consumers probably need to take control of their own destiny at this juncture."

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