NB Power ordered to provide limited disclosure on settlement payouts

NB Power has been ordered to provide limited disclosure of what insurance companies have agreed to pay it to settle claims from problems encountered during the Point Lepreau nuclear plant refurbishment,but that disclosure will be made only to the Energy and Utilities Board and the public intervener.

"The sole consideration in this matter is whether the publication of the terms of settlement are necessary in the public interest," said EUBvice chairman Francois Beaulieu in a ruling Wednesday afternoon that then concluded full disclosure of the Lepreau settlement would notbe best for anyone.

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NB Power has been trying to keep settlement details it reached with multiple insurance companies over delays and cost overruns during the 57 month refurbishment secret as it pursues additional compensation from its contractor Atomic Energy of Canada Ltd. (AECL) in a second lawsuit.

The insurance companies also want details kept secret as they too fight with AECL over claims it has made against them.

"The nature of these outstanding claims and the potential impact of any undue disclosure of the settlement terms would be detrimental to NB Power's commercial interests which in turn would be detrimental to the interests of its ratepayers," said Beaulieu

However, the EUB decided the deal would have to be shared in full with both it and public intervener Heather Black to ensure the utility is dealing with the settlement amounts properly and to the benefit of its ratepayers.

"The board is satisfied the public intervener's role is sufficient to ensure that the public interest will be served," said Beaulieu in delivering the decision.

Defeat for JD Irving Ltd.

The ruling was a defeat for NB Power's largest customer JD Irving Ltd. which had asked to view the settlement details on a confidential basis as part of its participation in the utility's ongoing rate hearing.

But it was also a partial defeat for NB Power, which had asked that none of the details of the settlement be shared except for the total amount and only with the EUB.

NB Power lawyer John Furey said he did not know how insurers would react to the limited disclosure ruling but warned if they take a hard line it could cause considerable problems for the rate hearing, which is already weeks behind schedule.

Furey said legal rules grant both NB Power and insurance companies 10 days to decide whether to challenge the board ruling in court.

Although the utility does not plan to take any action, the companies' intentions were not immediately known.

"It would be our [NB Power's]intention to waive the 10-day rule," said Furey. "I do have to make contact with insurers to ensure that they are also willing to waive the 10-day rule."

Last week, Calgary lawyer Michael Dixon, acting for the insurance companies, which are mostly European, sent a letter to NB Power objecting to any disclosure of the settlement.

"The information is not merely confidential and sensitive it is also privileged," wrote Dixon.

Could affect rate increase

Although the settlement amount is unknown, NB Power has said it is large enough to affect how much of a rate increase it will need this year.

The utility was supposed to lower its original request for an average two per cent increase by Wednesday afternoon at 4:30 p.m., but uncertainly over how insurance companies will react to the EUB's ruling caused NB Power to miss that deadline.

The rate hearing began Feb.7and was supposed to conclude Feb.23 with new rates in place by April 1.Instead, the hearing is now six weeks behind schedule with no immediate end in sight.

On Wednesday,Beaulieu said scheduling conflicts mean any further delays could push the hearings into May, June or possibly July before all of the evidence is heard.