NB Power wins partial rate hike approval

New Brunswick's Energy and Utilities Board has granted NB Power a rate increase, scheduled to takeeffect April 1,but not as much as the utility asked for.

In a preliminary decision released on Monday, the Energy and Utilities Board referenced a math error uncovered in February during NB Power's rate hearing and stripped $3.2 million in proposed industrial subsidies out of the utility's rate hike.

The change will likely lower NB Power's requested overall rate hike of twoper cent to 1.8 per cent, but the utility was ordered to recalculate an exact amount and return to the EUB with a precise increase later this week that could take effect by the weekend.

"With these changes NB Power is directed to provide the Board for review, its calculation of revised rate increases for all customer classes, and a revised proposed schedule of rates," the boardruled during a brief phone conference from its Saint John offices.

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In February, board lawyer Ellen Desmond challenged NB Power executives about the way they were calculating subsides for industrial customers under the province's Large Industrial Renewable Energy Purchase Program.

The New Brunswick government requires NB Power to buy renewable energy from the province's six pulp and/or paper mills at a high price and then sell it back to them at a low price.

The transaction is meant to reduce electricity costs for the mills to a predetermined Canadian average for large industry.

Desmond pointed out that NB Power was using exaggerated numbers in some of its calculations and had been proposing to subsidize the mills $3.2 million too much.

"The information should be as accurate as possible and at the time of filing the materials;those were not the most up-to-date pieces of information. Would you agree with that?" Desmond said to a panel of four NB Power executives onFeb.23.

NB Power conceded Desmond's $3.2 million calculation but defended using the bad numbers because not all of the factors needed for an accurate calculation were known in February and the inflated figures gave it some cushion in case it was underestimating in other areas.

"We can't be updating every detail every day," protested NeilLarlee, NB Power's director of strategic planning.

In its rulingMonday, the board sided with Desmond and stripped the $3.2 million from its rate increase.