Saint John Energy customers see 12.6% rate hike

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Every place in New Brunswick is facing steep power rate increases that started April 1, except for one small spot in the province’s northwest.

The 900 household and business customers of the Perth-Andover Electric Light Commission have a reprieve till next year, thanks to a unique arrangement. But the other two municipal electric utilities in New Brunswick – in Saint John and Edmundston – have not escaped the rates hikes.

Saint John Energy boosted rates as soon as NB Power did on April 1. Its 36,500 residential customers, who already receive some savings because they benefit from a bulk, wholesale rate, will see a slightly lower increase than NB Power customers because it is using savings from the new Burchill Windfarm to offset both the general rate increase and rate rider.

I’m not going to speak for NB Power, but I’d suggest to you that these are historically high increases, and no one wants to see that.

Jeff Garrett

Its residential customers will endure a 12.6 per cent hike overall, compared to 13.2 per cent for NB Power’s residential customers.

Including the latest increases, Saint John Energy says its average monthly residential bill would be $23.96 lower than the bill faced by a similar NB Power customer.

NB Power’s rate hikes were part of a combined general rate increase and rate rider to make up for a revenue shortfall from the previous year.

It was only given interim approval from the New Brunswick Energy and Utilities Board and must appear before the regulator in May for a full set of hearings where it will plead its case.

If the board finds after months of study that NB Power had asked for too much, the utility will have to give credit back to its customers.

The rate shock is on top of much higher costs over the last couple of years for housing, groceries and fuel. NB Power said the average increase for residential customers would be $25.47 a month, based on a bill of $192.95 a month, or an additional $305.64 a year.

Large industrial customers, meanwhile, face a steep 15.3 per cent rate increase, and commercial operations an 11.5 per cent hike.

“I’m not going to speak for NB Power, but I’d suggest to you that these are historically high increases, and no one wants to see that,” said Jeff Garrett, a manager at Saint John Energy. “However, the more this gets delayed, the higher the increase will probably be. So we’re going to have to deal with this issue. Ultimately, it will be up to the board to decide whether NB Power’s rate application is acceptable.”

Meanwhile, Perth-Andover’s residents and businesses are not facing a rate hike – at least for now. That’s because the village, 120 kilometres northwest of Fredericton, does not deal with NB Power directly for its electrical needs.

“We’re the only utility that doesn’t buy from NB Power,” said Dan Dionne, Perth-Andover’s chief administrative officer. “It’s unique for us.”

The commission purchases power from Ontario-based Algonquin Energy and Utilities, a successor company following Maine Public Service’s privatization in the 1990s.

Back in 1923, Maine Public Service made a unique arrangement with the province when it wanted to build the Tinker Dam on the Aroostook River near the Canada-U.S. border. The hydroelectric generating station was constructed on the New Brunswick side of the river and still operates today, more than 100 years later, with the understanding Perth-Andover would always be able to draw some of the electricity produced there.

Dionne said the contract it signed with Algonquin offers prices that are hedged to NB Power’s wholesale rates. They are adjusted once a year, so Perth-Andover won’t face power rate hikes until at least April 2025.

That rate increase, it’s a big number for people.

Dan Dionne

Perth-Andover boasts on its website it saves $350,000 a year compared to NB Power’s customers, which works out on average to $389 per customer. And that’s before any rate increases that affected NB Power customers in April.

But Dionne said people in Perth-Andover still have concerns about impending higher costs.

“That rate increase, it’s a big number for people,” he said. “With all the other costs going up now, hopefully the Energy and Utilities Board can sort through it and get the rate where it should be. Whether it’s water rates, property taxes or electrical rates, we have to be conscious of that. Especially with an aging population on fixed incomes.”

The commission’s contract with Algonquin, good for another eight years or so, could always be re-negotiated so that it does not depend on NB Power’s wholesale rate.

“That’s why we’ve always played an active role in the rate hearings, along with Saint John and Edmundston, to make sure NB Power is doing things in a cost-effective manner,” the village manager said.

“If you look back, the NB Power rate changes have been zero, or two per cent, three per cent, in that range. The escalating rate has not been a big issue for us. But obviously not raising them enough over time has gotten NB Power to where it is now where they have to play catchup. It has so much debt without making headway on it.”

Saint John Energy, Perth-Andover Electric and Edmundston Energy are teaming up in May as interveners in NB Power’s rate hearings. They’ve hired lawyer Ryan Burgoyne of Cox and Palmer law firm in Fredericton to represent their interests.

Edmundston Energy raised rates for its 9,000 residential, commercial and industrial customers in concert with NB Power’s April 1. It has two dams in the city that provide some power, but the bulk still comes from the much bigger provincial utility.

It says the average household will pay $27.20 more a month.

Mychèle Poitras, a spokeswoman for the city, said every time NB Power raises rates, Edmundston Energy follows suit.

“Nobody likes hikes, but we need to follow,” she said. “This started April 1, and of course when our press release came out, people on social media weren’t pleased, which is understandable. Everything is going up.”