Rate increases of 50% over six years under the spotlight at N.B. Power hearing

N.B. Power is in front of the New Brunswick Energy and utilities board seeking approval to raise its rates by 4.75 per cent this year, but the utility's plans to follow that with a 6.5 per cent increase next year and another 6.5 per cent increase the year after have been raising their own set of questions..

Randy Hatfield of the Human Development Council questioned N.B. Power executives at length this week on how consumers on low incomes will be able to cope with years of cumulative large increases in power bills.

"When N.B. Power develops its rate proposals and long-term investment plans, how does the corporation take these  household affordability pressures into account," he asked senior vice-president Darren Murphy and chief financial officer Justin Urquhart.

"Why isn't affordability a more explicit organizing principle?"

Murphy expressed sympathy with those who struggle to pay for electricity.

But, he said, the utility has little choice but to invest heavily in its aging generation and transmission assets to prevent even higher increases later on.

Murphy said spending now on "improving reliability" is to everyone's benefit, including those who are "struggling," and will keep rates from heading to worse places than they are already going.

"Although that, for some people, is a stretch to understand the connection between those two things, I think reliable assets are more affordable and therefore certainly support keeping rates as low as possible," Murphy said.

For much of the last decade N.B. Power has promoted how its rate increases since 2010 have been kept below the rate of inflation but that took a dramatic turn in 2023 with a 5.68 increase followed by back to back 9.14 per cent increases in 2024 and 2025.

By 2028, under current plans, rates will have increased 50 per cent in six years — nearly five times the expected rate of inflation over that stretch.

On Tuesday, public intervener Alain Chaisson noted that N.B. Power's next three planned rate increases all "far exceed the consumer price index in all three years."

Chaisson questioned whether that is reasonable given other economic struggles facing the province.

"Electricity is a basic necessity," he said.  "People need electricity and indeed in winter may need it to survive."

Justin Urquhart, N.B. Power's chief financial officer, conceded those points, but he and Murphy defended the utility's need for more money to fix its own multiple problems.