Labradorians planning intervention at power rate review

Ashley Fitzpatrick
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Municipalities, politicians, residents objecting to proposed Hydro rates

Power lines near Quebec City are shown in this 2006 file photo. Photo by Jacques Boissinot/The Canadian Press

Hydro customers in west and central Labrador pay the lowest power rates in Canada, but are reacting quickly to a proposed increase.

Individuals and town councils are publicly objecting to a general rate application by Newfoundland and Labrador Hydro proposing a rate hike, filed with the Public Utilities Board (PUB) Tuesday.

“We haven’t got any details around any of what is going to affect us, other than a 25 per cent increase across the board. We haven’t got any other detail than that,” said Karen Oldford, mayor of Labrador City.

The actual filing made to the PUB has been available in a paper copy, but had yet to be published online as of deadline Thursday — more than two days after Hydro briefed media representatives on the high-level numbers. Yet Hydro has those numbers and reasoning for the change up at

The numbers in overview show the 10,500 customers on the Labrador interconnected system will see an average rate increase from 3.9 cents per kilowatt hour to 4.9 cents, if the PUB approves the application.

In explaining, Hydro vice-president Rob Henderson pointed to increased economic activity in the region and about $39 million spent by Hydro on upgrades and new infrastructure since 2007.

Oldford said that reasoning “doesn’t fly” with the municipal governments for Labrador City, Wabush and Happy Valley-Goose Bay, now teaming up to fight the rate hike.

“The costs of living in Labrador are much higher than in the rest of the province but the hydro company refuses to acknowledge this,” said Wabush Deputy Mayor Dwayne Patey, in a joint statement.

Oldford told The Telegram the feeling of the towns is Hydro is not taking the history of power in Labrador to heart.

“They neglect to say that they got the (hydro) resource for a dollar from both mining companies in Labrador West and they neglect to say that they paid a quarter of a cent per kilowatt hour for Churchill Falls for our power and they neglect to say that we’re adjacent to the resource and therefore our power should be cheaper because we’re adjacent to it. They’ve neglected all of that,” she said.

“Plus they got six million dollars from the Iron Ore Company (of Canada) and Cliffs (Natural Resources) to do upgrades at the time that they were given the resource and they’ve been collecting the money from the residents here ever since.”

She said developers in the area are covering big bills to install new infrastructure, questioning the argument of growth putting heavy costs on the utility.

“I know even for our own selves, as a municipality, we have five poles put up on our new municipal landfill site, which is a joint one, (and) it was over $270,000 we had to pay in order to have those five poles instituted,” she said.

The Telegram was provided a page of the detailed filing in response to questions. That page stated the expected revenues for Hydro under the current rates and under the proposed rates. For “street and area lighting” in Labrador West, Hydro expects about $291,000 under the existing rates. Under new rates, the utility expects to take in about $416,000, or about $125,000 more. That would represent a 42.8 per cent change year over year.

“It’s going to mean impacts on services,” Oldford said.

“Considering the largest hydro project in Canada is being developed in our backyards, benefits such as long-term secure rates should be part of government’s commitment to Labrador,” said Happy Valley-Goose Bay Deputy Mayor Stanley Oliver.

The Telegram was told the Nunatsiavut Government wants to review the complete application to the PUB before comment.

“For me as a citizen, I’m very concerned what kind of an impact this is going to have on our community,” said Bert Pomeroy, a communications representative with that government.

He suggested the proposed rate hike is likely to be confusing for people who have just received notice of decreased rates as of July 1, on the heels of the implementation of the provincial rate stabilization plan, adjusting charges to reflect oil costs and hydro production between general rate applications.

Meanwhile, Newfoundland and Labrador Hydro has requested a small drop in power rates for most customers, who are based on the island. Liberal leadership candidate Danny Dumaresque has a problem with that.

“I can tell you that this is going to open up a very nasty debate, and one that I think the premier should step in and end right now. I can’t believe that this premier and this government would allow this application to go (forward) knowing full well the history, the political history of this province, and how distasteful it is to see there sources of Labrador being taken out of there and getting nothing in return,” he said.

The province’s consumer advocate was unavailable for comment.

The new rates will come into effect Jan. 1, 2014 if approved by the regulator. Public hearings are expected this fall.

Organizations: Public Utilities Board, Newfoundland and Labrador Hydro, Labrador City Iron Ore Company

Geographic location: Labrador West, Canada, Wabush Happy Valley Goose Bay

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