NB Power Seeks Minor Rate Adjustment for 2026/27 Fiscal Year

Saint John residents can expect a slight adjustment to their electricity bills starting April 1, 2026, as NB Power has filed its annual Variance Account Recovery (VAR) application with the New Brunswick Energy and Utilities Board (NBEUB). This filing, submitted on December 16, 2025, aims to reconcile the differences between forecasted and actual costs incurred by the utility over the past year.

Understanding the Variance Account Recovery (VAR)

The VAR mechanism, introduced in 2021 through changes to the Electricity Act, is designed to ensure transparency for customers and accurately reflect electricity costs in rates. It allows NB Power to account for unforeseen variances in operational costs that are beyond its direct control.

Lori Clark, President and CEO of NB Power, explained that while the utility strives for accurate cost forecasting, factors such as customer energy consumption, fluctuating weather patterns, evolving commodity prices, exchange rates, and hydro flows can significantly impact their financial bottom line, both positively and negatively.

Impact on Residential Customers

If approved by the NBEUB, the VAR charge for the fiscal year beginning April 1, 2026, will see an increase of 0.04¢/kWh. For the average residential customer in Saint John, this translates to an approximate increase of 54 cents per month.

It’s important to note that the VAR amount can fluctuate. In the 2023/24 fiscal year, customers received a credit on their bills. However, for 2024/25 and 2025/26, the amount remained constant as a charge due to external costs.

Key Drivers Behind the Adjustment

Several factors contributed to this year’s Variance Account Recovery application:

• The accumulated balance from previous years.
• A reduction in industrial load.
• Lower than anticipated nuclear production and decreased hydro production, primarily due to drought conditions.

These factors were partially mitigated by increased opportunities to export surplus electricity out-of-province during the summer months, which generated additional revenue for NB Power.

Clark emphasized that rate increases are considered a last resort, and the VAR mechanism helps the utility manage its financial situation responsibly, addressing unplanned shortfalls while ensuring customers are not overcharged. It also allows for the spreading of costs over time to minimize overall impact.

For more detailed information on NB Power’s annual VAR application filing, you can visit the official NB Power website.

Frequently Asked Questions

What is the Variance Account Recovery (VAR) mechanism?

The VAR mechanism is a process approved in legislation that allows NB Power to adjust electricity rates to account for differences between budgeted and actual costs that were outside of their control, such as changes in energy consumption, weather, and commodity prices.

When will this rate adjustment take effect?

If approved by the NBEUB, the new VAR charge will apply for the fiscal year starting April 1, 2026.

How much will my bill increase?

For the average residential customer, the VAR charge will increase by 0.04¢/kWh, resulting in an estimated increase of about 54 cents per month.

Why is NB Power filing for this adjustment?

The adjustment is driven by factors including the balance from previous years, a reduction in industrial load, and lower nuclear and hydro production due to drought. These were partially offset by higher electricity export revenues.

Has this happened before?

Yes, the VAR mechanism is an annual filing. In 2023/24, customers received a credit, while in 2024/25 and 2025/26, the amount remained constant as a charge.