Paying three times

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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.

 

Marvin Barnes

St. John’s

Organizations: Newfoundland Power, Newfoundland and Labrador Hydro, Public Utilities Board

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Recent comments

  • Cold Future
    March 04, 2013 - 10:45

    #4 adds an average of $450 million ($15 million in year 1 and $900 million in year 50). It will escalate electricity rates at a much higher rate that the Canadian average. We will pay and be locked in to the highest rates in Canada. Hopefully, something good may come along to offset this fiasco. Government will tell you that this mismanagement and forecast deficits have nothing to do with the money sent to Nalcor and Hebron Who can believe that- did the money come from the tooth fairy?

  • Kevin
    March 02, 2013 - 23:10

    What is wrong with you guys in NL? Put up your own wind power generation station, it only costs a few hundred dollars to build your own. There is a lot of information on the web; you can do it your self with some research. There is no way peple that live in NL should be depending on big hydro companies that over charge for their services. Get with it boys and cut out the crooks of big powered companies.

  • Windering
    March 02, 2013 - 13:50

    And don't forget all that advertizing about Take Charge .About a million dollars a year for advertizing and "educational" support and overhead. All paid out of our power bills and has one of wrost records in the business for actual benefit for the customers. That's cost number 5.

  • Corporate Psycho
    March 02, 2013 - 12:00

    We ain't seen nothing yet.

  • Eli
    March 02, 2013 - 11:55

    It gets even more murky. There's that newborn government mandated monolith Nalcor That would be #4 Marvin. Costs to us consumers are huge!