Your electricity bill is going up again. N.B. Power wants to raise rates by 17.4 percent over the next three years.
The first jump happens this April with a 5.5 percent increase. The utility filed an official application with the New Brunswick Energy and Utilities Board. The board will hold a full hearing early next year.
Why N.B. Power Needs More Money
The requested amount exceeds the rate of inflation. The company needs the funds to fix deteriorating generation and distribution assets. N.B. Power president Lori Clark told reporters higher rates cannot be avoided.
“There is a lot of discussion about N.B. Power’s debt and the financial health of the utility, and we are looking to balance all of those things,” Clark said. “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.”
Rising Debt and New Infrastructure
N.B. Power expects to generate $564 million in profit over three years from the higher rates. This money will help modernize assets and improve financial results. However, the utility also projects a 62 percent jump in its net debt level. The debt will reach $10.8 billion over the three year period.
New long term leasing obligations cause much of this debt. These obligations tie directly to a natural gas generating station planned for Tantramar.
How This Impacts Your Household
You already experienced a combined 36.4 percent increase in electricity consumption charges over the last four years. The utility acknowledges an additional 17.4 percent increase will cause financial hardship for many customers, especially low income households.
The utility also plans to raise other fees. N.B. Power wants an extra $14 million from the rental of more than 276,000 water heaters. You will see rental rates increase between 27 and 39 percent depending on your tank size.
Frequently Asked Questions
When does the first rate increase take effect?
The first increase of 5.5 percent takes effect in April, pending approval from the New Brunswick Energy and Utilities Board.
Why is N.B. Power raising rates again?
The utility needs the money to replace aging infrastructure, manage its growing debt, and fund new projects like the natural gas plant in Tantramar.
Will my water heater rental fee go up?
Yes. N.B. Power proposed a 27 to 39 percent increase for water heater rentals over the next three years.
There is really something wrong. How much more can people take? Even with rates the way they are, choosing between food and hydro is a real concern now, never mind another 17% increase, and the amount of wattage NB Power is quoting isn’t realistic at all…a normal household uses a great deal more, and thus, the projected increase will be much higher than they are quoting.