Majority of customers will pay less if new hydro rates approved

Utility wants more from customers on isolated power systems

Published on July 30, 2013
NL Hydro log

Newfoundland and Labrador Hydro is proposing changes to its power rates across the board, changes yet to be reviewed and approved by the province’s Public Utilities Board (PUB).

Leaders with the Nalcor company say the requested changes will see a decrease in Hydro rates for 95 per cent of customers.

The rate application, filed today with the PUB, is a first for Hydro since 2006.

Hydro has requested a decrease in rates relevant to the approximately 241,000 customers of Newfoundland Power — from an average of 12.4 cents per kilowatt hour (kWh) to 12 cents.

An identical request has been made for Hydro’s 22,700 customers tied into the island system, on the Northern Peninsula and the Baie Verte Peninsula.

However, an increase has been requested for 800 or so customers on the island on isolated systems  — in Francois, Ramea, St. Brendan’s, for example — from an average 14.8 cents per kWh to 14.9 cents.

 

Labrador rates

Larger increases are proposed for Labrador, affecting customers tied into the system in Labrador West and Happy Valley-Goose Bay. Customers tied into the L’Anse au Loup system will also see an increase, but the largest jump will go to rates for residents reliant on Labrador’s isolated, coastal diesel systems.

Newfoundland and Labrador Hydro has a little over 14,000 customers in Labrador, about 2,600 of those are fed from the coastal, diesel systems.

“In Labrador, there’s been quite a bit of economic activity in recent years and as a result Hydro has been making investments in recent years into the system in Labrador to maintain reliable electricity supply to the customers, while trying to balance that to keep costs down,” said Rob Henderson, vice president of Newfoundland and Labrador Hydro, taking questions from reporters in St. John’s late this morning.

Henderson listed upgrades and new infrastructure amounting to a cost of about $39 million in Labrador in recent years.

He said the utility has invested in coastal diesel plants. He said diesel remains the least-cost option for coastal customers, despite ongoing study of alternatives for the isolated systems by Hydro.

Henderson said additional wind generation on the island since 2009-10, in addition to power available from the seized hydro assets once associated with Abitibi’s paper mill in Grand Falls-Windsor, has helped to save on fuel and displaced some oil use at Holyrood, allowing for some of the rate decrease proposed.

The changes proposed by Hydro are expected to come into effect in January 2014.

 

Industrial rates

That said, Hydro is in the process of bringing in a quicker rate change for the province’s industrial customers outside of Labrador West.

Once Vale’s Long Harbour processing facility comes online, the industrial customers will include: Corner Brook Pulp and Paper, Teck Resources, North Atlantic Refining, Vale and Praxair.

If Hydro’s rate increase is approved for these customers, they will go from paying 4.6 cents per kWh for their electricity, effective since 2007, up to 5.6 cents per kWh as of September of this year.

The rate will further increase to 8 cents per kWh by Sept. 1, 2015 — if Hydro’s rate application is approved as requested.

The Public Utilities Board (PUB) will hold hearings this fall to review the majority of the requested changes, akin to the more common Newfoundland Power rate application and review process.

Ultimately, the PUB may decide not to approve the rate change as requested, calling for more minor changes or denying increases.

No dates have yet been set for the review.

To help people understand the application and the changes coming, Newfoundland and Labrador Hydro have launched a website — www.hydrogra.ca — providing further information.

More in tomorrow’s print and digital editions.

 

afitzpatrick@thetelegram.com