If you live in New Brunswick, your electricity rates are part of a growing dispute between the province’s public utility and its largest forestry company. J.D. Irving Ltd. accuses NB Power of giving preferential treatment to outside industrial customers, a move the company says threatens the future of Irving Paper.

Image source: THE CANADIAN PRESS/Eli J. Ridder via CTV News

The Shift in Surplus Power Sales

Earlier this year, a provincial regulator allowed NB Power to sell cheaper surplus power at market rates to external customers. This decision boosts the utility’s revenues by millions of dollars. The ruling allows NB Power to prioritize fixed sales contracts with outside buyers instead of offering discounted surplus rates to local manufacturers.

This marks a major change from previous decades. Historically, NB Power sold excess electricity to large provincial customers at a discount before exporting it. Now, local manufacturers face rising costs after losing access to this cheaper power.

Irving Paper Faces Devastating Consequences

Mark Mosher, an executive at J.D. Irving Ltd., states NB Power is selling cheap surplus power to external customers in the United States and other provinces. This forces J.D. Irving and other large industrial customers to buy more expensive excess power at a higher rate.

Mosher told The Canadian Press the policy change drives up power costs for Irving Paper by an estimated $10 million annually. He warns this increase will cause the facility to close.

“The situation has become untenable, and we know where this leads,” Mosher said.

Last year, Irving Paper closed one of its two paper machines and laid off 140 workers. The company blamed a 10 per cent industrial electricity rate increase for that decision.

NB Power and Government Response

NB Power denies selling surplus energy to US customers before meeting local needs. The Crown corporation states it uses revenues from outside sales to offset the cost of providing electricity to regular customers inside the province.

“We are not selling hourly export products to anyone before we serve all load, including interruptible power, in New Brunswick,” NB Power said in a statement.

Provincial Energy Minister Rene Legacy notes the surplus market pricing benefits fixed electricity customers, including residential homes. The corporation finds profit elsewhere to keep local rates manageable.

“We could reverse this, and it could be changed, but somebody else would be impacted,” Legacy said in the legislature.

The Liberal government refuses to intervene in J.D. Irving’s application to the New Brunswick Energy and Utilities Board. The forestry company wants the board to review the decision, arguing major employers received no notification of the proposal before its approval in April.

Forestry Workers Raise Alarms

Jennifer Murray represents more than 3,000 unionized forestry workers in New Brunswick as the Atlantic regional director for Unifor. She says the surplus power change adds heavy economic pressure to an already struggling sector.

“In the middle of a trade war, it is not a wise decision to be selling anything to the United States before looking at taking care of New Brunswickers first,” Murray said.

She warns higher power bills for major forestry manufacturers will lead to layoffs and shutdowns.

Frequently Asked Questions

Why is J.D. Irving upset with NB Power?

J.D. Irving accuses NB Power of prioritizing power exports to outside customers. This forces local manufacturers to pay higher rates for excess power, costing Irving Paper an estimated $10 million annually.

How does this policy affect regular residents?

NB Power and the provincial government state that selling surplus power at market rates to external customers generates revenue. This revenue helps offset the cost of providing electricity to regular residential customers in New Brunswick.

Will the provincial government step in?

No. Energy Minister Rene Legacy confirmed the government will not intervene in the regulatory process or J.D. Irving’s appeal to the New Brunswick Energy and Utilities Board.