So, Newfoundland Power is gearing up for yet another rate increase application to the Public Utilities Board on the heels of last year’s rate increase and in the midst of power outages and ominous warnings from Newfoundland Hydro about rolling blackouts because something malfunctioned at the Holyrood generating station. On and on it goes.
I am neither an economist nor a financial expert, but as a layperson my question is this: how many times over do we, as consumers, have to pay for this power?
According to the Newfoundland Power website, “The company purchases approximately 90 per cent of its electricity from the Crown
corporation Newfoundland and Labrador Hydro…” at a cost $358 million (in 2010).
So it appears that Payment No. 1 goes to Newfoundland and Labrador Hydro, which presumably has to pay for its expenditures related to operations and infrastructure. Newfoundland Power presumably has to do the same to support its operations and infrastructure — ergo the consumer is on the hook for Payment No. 2.
And now for the grand finale, Newfoundland Power is investor owned, so we all have to ensure that the investors get a return on their investment.
That would be Payment No. 3.
I won’t even get into the duplication of exorbitant salaries, bonuses and payouts to the executives of both of these entities.
I suggest that it is somewhat immoral for the consumers have to pay at least three times for electricity, which is effectively an essential service.
Maybe the provincial government should take the necessary steps to take over the assets of Newfoundland Power and incorporate its assets under Newfoundland and Labrador Hydro, so as to ensure that we only have to pay once and minimize costs for this essential service.