Supreme Court overrules PUB on rebate for Labrador customers

The Newfoundland and Labrador Supreme Court of Appeal has ruled electrical customers in Labrador have no right to share in $112 million in rebates from a fund paid for by customers who live in Newfoundland.

The Rate Stabilization Plan (RSP) was set up to smooth the impact of oil prices on the cost of generating power in Holyrood.

Two years ago,the Newfoundland and Labradorgovernment ordered the surplus funds be given back to ratepayers. However,the Public Utilities Board (PUB) said the money should be split among all customers, including those in Labrador who get their power from either Churchill Falls or local diesel generators.

The PUB decisionprompted appeals by Newfoundland Power, Newfoundland and LabradorHydro and the province'sconsumer advocate.

• Power rebate should only go to Newfoundland customers, advocate says

In a new rulling, the Court of Appealsaid Labrador customers are not eligible for rebates from the fund because they didn't put any money into it.

In the official decision, the court laid out the rationale behind striking down the PUB's decision.

"The PUB decision was made within its jurisdiction. However, the PUB decision was unreasonable," Justice Malcolm Rowe wrote in a unanimous decision.

"Only those who paid into the RSP can receivea refund from it."

Now that the decision on the matter has been made, the court has ordered the PUB to work out the details of making the payments back to customers.

Initially, the amount to be paid back to each customer in Newfoundland was $400, if Labrador customers were also refunded.

However that formula will now have to be reassessed, and the court said those matter will have to be determined by the PUB.

"Many particulars relating to the rebate remain to be determined," Justice Rowe wrote.

"Those are matters for the PUB to decide, having regard to what has been set out above."