The Public Utilities Board (PUB) has issued its decision on an application filed by Newfoundland Power, denying the company the rate hike it had requested.
The company filed its request for a 7.2 per cent hike for homeowners on Sept. 14, 2012.
The request was subject to hearings before the energy regulator in January and February.
In its decision issued today, the board did not award the 7.2 per cent hike and stated Newfoundland Power would have to file a new proposal in line with decisions by the board related to its specific costs.
The bottom line, according to Consumer Advocate Thomas Johnson, is the coming power rate hike will not be as high as proposed by the Fortis company.
When the application was being debated before the energy regulator, members of the Newfoundland Power executive said the rate hike is needed to both maintain a strong financial position for the company and provide a fair return to shareholders.
Johnson argued the proposed hike was a show of corporate greed — for shareholder profit, rather than in the interest of fairness.
“One of the main drivers for the rate increase was the (requested) return on equity,” Johnson told The Telegram shortly after 12:30 p.m. today.
The requested return on equity was for 10.4 per cent this year, for example, up from 8.8 per cent.
“We had argued the return should be less than that,” Johnson said.
The PUB has decided 8.8 per cent is a fair return for the company.
The ultimate impact of the decision on customers will not be known until the company files its new numbers with the board.