N.B. Power proposal to end urban, rural rates would add 15% to service charge for some - Action News
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New Brunswick

N.B. Power proposal to end urban, rural rates would add 15% to service charge for some

The Crown corporation wants to merge its urban, rural and seasonal categories into one, but advocates say the change will disproportionately affect low-income homes.

Utility proposes to merge categories to uniform rate of $28.97

Man sits at a table intently staring at a laptop screen with a blonde woman beside him.
Energy and Utilities Board lawyer Abigail Herrington, right, highlighted the difference in service charge increases for urban customers at N.B. Power's hearing last week. (Jonathan Collicott/CBC)

N.B. Power's proposal to do away with separate urban and rural service charge rates would mean a 15 per cent monthly increase for some customers.

That proposal was spurred by New Brunswick's local governance reform,according toN.B. Power staff appearing before the province's Energy and Utilities Board lastweek.

N.B. Power rate design specialist Veronique Stevenson said those within municipal boundaries before those reforms took effectin January 2023are now paying acheaper urban rate.

While thosebrought into municipal boundaries in 2023 would technically fall into that same urban category, Stevenson said those householdsare still paying the more expensive rural rate.

The NB Power building.
N.B. Power has missed its profit targets in each of the last four years by a combined $252 million. This year it has informed both the Energy and Utilities Board and the Department of Finance that profits are running ahead of its budget projection. (Radio-Canada)

That's becausetransferring those households over to the urban rate would mean a considerable revenue loss for the utility, she said.

The Crown corporation's general rate application lists the existingurban and rural rates as $24.57 and $26.96 per month, respectively. It also has a "seasonal" category, which is also charged $26.96 per month.

N.B. Powerproposes to merge the categories to a uniform rate of $28.97.

But that would mean a 15.1 per cent increase to the monthly service rate, or $3.70,for about 51 per cent of customers those who would have previously been charged under the urban category.

A person looking at the camera, sitting in a chair.
Randy Hatfield worries the monthly service charge increase will disproportionately impact low-income people. (CBC)

While the remaining customersin the rural andseasonal categories will take on a 4.9 per cent increase, or $1.31 per month.

"So N.B. Power's proposal is asking urban customers to bear a higher increase in order to cover a lower increase for the rural and seasonal customers, that's the implication?" Abigail Herrington, counsel for the EUB, asked the panel on Thursday.

Stevenson agreed that urban customers "will certainly see a bit of a higher rate increase" if the changes are accepted by the board.

"Because it only applies to the service charge, customers with lower energy will see a higher percentage increase on their bill," Stevenson said.

Woman looking at camera with neutral expression.
Shelley Petit of the New Brunswick Coalition of Persons with Disabilities said the increase will be difficult for people with disabilities to absorb, as many are on a fixed income. (Nipun Tiwari/ CBC News)

It's a disparity that Randy Hatfield, executive director at the Human Development Council in Saint John, worries will disproportionately impact low-income customers.

"Low-income people are better off with a lower monthly flat-rate charge. As low as possible," he said."Because they tend to be users of a smaller amount of electricity, and they have some control or agency over how much they use."

He also pointed to a report from independent consultant Robert Knecht,hired by public intervenor Alain Chiasson, which says the overall increase across categories isn't justified.

Shelley Petit, who is representing the New Brunswick Coalition of Persons with Disabilities, also worries about how the change will affect people's bills and ability to access basic needs.

A picture of power lines and poles captured during a sunset.
N.B. Power is proposing to merge its urban, rural and seasonal monthly service charges into one category. (N.B. Power/Facebook)

"These increases are portrayed as small, just a few dollars here and few dollars there, barely the price of a coffee a day, but we do not have that luxury of going out and buying a coffee," Petit said in a statement.

"Too many persons with disabilities are already eating only what is obtained from the food banks.They are being forced to skip treatments, uncovered medications and more."

She worries ultimately those on fixed incomes will not be able to handle the proposed increases.

Asked about the utility's reasoning for putting more of the increase on urban customers,N.B. Power spokespersonDominique Couture referred CBC News to exhibit NBP11.41.

However, exhibitNBP11.41 does not provide a rationale, but lays out the increases in eachcategory and bill impact.

CBC News requested comment from the province's Department of Local Governmenton Friday but did not receive a response.