NB Power hearing could push up rates for homeowners

An upcoming NB Power hearing designed to make electricity prices in New Brunswick more fair appears ready to finger residential customers as major system freeloaders who need to start paying more for what they use.

The Energy and Utilities Board begins holding a much-delayed customer cost allocation hearing on Feb. 1 to determine who should be paying what for electricity in the province.

It's almost certain to find commercial businesses and government pay too much, in part because homeowners pay too little.

"Businesses, like small business and medium sized business they're paying above the cost of electricity so it's unfair," says Jordi Morgan with the Canadian Federation of Independent Business.

"It's something that needs to be addressedand it's something we're hoping is going to be addressed."

The EUB and its predecessor have been on the record since the early 1990s demanding NB Power fix pricing problems between customers but the issue persists.

NB Power has filed evidence for this year's hearing suggesting residential customers currently pay 7.3 per cent or $54.5 million a year too little for the electricity they consume based on the cost of serving them.

That forces other customers to make up the difference including the province and municipalities who get over charged $10.8 million for street lighting and government offices and commercial businesses, who are made to overpay about $39 million for heat and lights.

Those numbers will be debated at the hearing but Heather Black, the province's public intervener, said she expects they will not move a lot and will likely begin to shape rates beginning later this year

"You take those results and you use those when you set rates," said Black.

"That maybe makes up for some of that unfairness."

While last year every NB Power customer received the same 1.6 per cent rate increase, Black said future hikes will likely be different for different groups and heaviest for homeowners until they are paying full price.

One issue of contention at the hearing is who should pay to finance power rate subsidies for industry that have been ordered by the provincial government.

NB Power has proposed to charge all of its customers for that expense, but an expert hired by the EUB says for complete price fairness industrial customers of NB Power should be charged for industrial subsidies.